Collateral Calculations 

Purpose

This process determines the extent of collateralization for receivables. The system uses the data constellation (of an entity) for analyzing and interpreting relationships between collateral entities. This analysis forms the basis for performing a range of basic and intermediary calculation functions. The calculation functions are also designed to support business logic for various scenarios of collateral objects and collateral agreements. For example, a range of intermediary calculations are performed to support the business for collateral agreements scenarios in guarantees, pools and relationships.

Calculations will be performed only if system status of the collateral entity is set to Calculation Relevant. For more information on how system status influences calculations, see

Status Management

If the current collateral entity (from which the constellation is shown) is calculation relevant, calculation functions are performed by selecting only the calculation relevant collateral entities. If you want to view calculation results for all entities in a constellation irrespective of their calculation status, you must use the Show all status button in the Calculations tab page.

Prerequisites

The standard system provides the Business Add-Ins, Distribution of Collateral Value and Distribution of Lending Ranges. To perform the calculation functions, you must implement these Business Add-Ins in the Implementation Guide (IMG) Customizing for Collateral Management by choosing SAP Banking ® Collateral Management ® Collateral Analysis ® Business Add-Ins for Calculations.

Process Flow

The system performs the following process steps for performing collateral calculations:

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       1.      Analyzes and interprets relationships between collateral entities (data constellation) as shown in the Overview tab page.

       2.      Performs currency translation if there is a mismatch in the currencies of entities in constellation.

       3.      Determines the value that collateral objects can lend to collateral agreements. The system considers the various factors limiting the collateral object value to determine the final value available as collateral.

       4.      Determines the final value available from collateral agreements. The value of a collateral agreement can be entered as an agreed assessment amount and may also need to be calculated as a percentage of assigned assets or receivables. If more than one values are available, then the system needs to fix value available from collateral agreement by considering a minimum of the available values.

       5.      Determines the collateral value that is distributed to receivables and relationships assigned to collateral agreements.

The value available from collateral agreement cannot be directly used for distribution. It is necessary to limit this value by considering other values such as prior charges on collateral objects, the maximum amount required by receivables or even the maximum amount available from collateral objects (lending limit). This is because these values may be lower than the value available from collateral agreement.

       6.      Distributes collateral value to receivables assigned to collateral agreements. The system performs a separate distribution function for pool agreements if collateral agreement is a pool agreement or has assignments to a pool agreement. In addition, the system performs an independent distribution function considering the lending ranges of a collateral agreement.

       7.      Performs allied calculations for receivables such as overdraft and coverage gap values. These results are used in collateral monitoring reports provided in Collateral Management.

For detailed information on these process steps, refer to the documentation in the subsequent nodes of the structure.

Result

The system shows results of the calculation functions in separate columns. Values of columns are relevant to the specific collateral entities. You can select or hide these parameters using the list arrow on the Change layout icon. The status represents the user status for collateral entities. For receivables, the status of the receivable header (Contract, Offer or Application) is shown.