Conditions

Definition

Condition

A condition is a contractually agreed element of a financial transaction or financial instrument. It describes the structure of the transaction in terms of the period and amount (interest, repayment, and so on).

Condition type

You define conditions using condition types. You assign flow types to condition types in Customizing by choosing Define Condition Types . These flow types display changes to the payment flows and are part of the cash flow. You assign the flow categories and calculation categories , which are predefined in the system , to the flow types you define yourself in Customizing by choosing Define Flow Types.

Note Note

SAP delivers flow types for the common business transactions. You can use these flow types without making changes to them.

Since flow types can be complicated to set up, we recommend that you copy an existing flow type when you create a new flow type and make changes to it. It is a good idea to print out the current flow type definitions before you change the flow types.

End of the note.

Typical condition types are interest, dividends, and final repayments.

Condition group

A group of condition types.

Each product type requires only a selection of condition types. Create different condition groups, such as a condition group for percentage-quoted securities, fixed-interest securities. To do this choose Define Condition Groups in Customizing for securities. Group together the different condition types by choosing Assign Condition Types to Condition Groups. You then assign these condition groups to the individual product types by choosing Define Product Types.

Use

Conditions include all the data that is relevant for generating condition-based flows in the cash flow. The different entries for the individual condition types determine exactly how the flows are calculated.

Conditions in the securities area are individual conditions. This means that a condition cannot exist independently of a class.

Structure

The conditions are part of the class data. Call them up by choosing the tab page Conditions.

Condition header (general condition characteristics)

The condition header displays the basic data for the security, which applies to all condition items, or which enhances the individual condition items.

You can determine the fields you want to display to some extent in Customizing by choosing Define Product Types and using the field selection function.

Condition items

You can choose from several condition types for each product type a ccording to the settings you mak e in Customizing.

A condition item comprises entries (dates and amounts) for the condition type, for example, Effective from, Calculation date, Due date , Percentage rate , and so on.

You can set most of the entry fields for each condition type as optional entry, required entry or display fields using the field selection function in Customizing by choosing Define Condition Types.

By double-clicking a condition item or selecting the condition item and choosing ( Detail ), you can display the detail screens for the conditions .

Condition details screens

Here, you find the Effective from date again for the condition item, the Condition form field, and the tab pages Amounts, Dates and Payment data/Other , depending on the condition type.

Using the three values for the Condition form field, you define how the relevant flows of the condition item influence the cash flow:

  1. Zero condition

  2. When you enter a zero condition, you can end the effectiveness of a condition item at any date. To do this, enter a new condition item of the same condition type, enter the required Effective from date and select it as a zero condition. This enables you to represent, for example, the suspension of interest payments one year before the final due date. To reactivate calculations for this condition type, you enter a subsequent condition item.

  3. Fixed condition

  4. ‘Fixed condition’ means that the relevant condition item is not recalculated for an alternative effective interest rate or term end.

  5. Statistical condition

    This means that the condition item is ignored. In other words, no flow records are generated in the cash flow.

The tab pages Amounts, Dates, and Payment date/Other show you exactly how the conditions are structured. The screen contains additional fields to those on the initial Conditions screen, depending on which fields you select for the condition.

Amounts

This tab page includes entries for the amounts and/or the amount of a condition type. For the Nominal interest condition type, these include more detailed entries for the interest calculation. The Reference interest rate field is also included here when you have a variable interest rate.

Dates

  1. Calendar

  2. If you always want to shift the due date to a working day, enter the calendar you want to use to calculate the working day ( SAP standard factory calendar ).

  3. Calculation date/Due date

  4. The calculation date is the last day of the current interest period. The due date is the day on which the interest payment is due.

    This area includes the fields for determining the exact calculation dates and due dates of the condition item.

  5. Calculation modes

Here, you define the method to be used to determine the next calculation date or due date.

Note Note

You can make defaults settings for these fields for each condition group and condition type in Customizing by choosing Assign Condition Types to Condition Groups.

End of the note.

Choose Date preview to display a list of the dates for the flows of the relevant condition type. The list includes the due date, the payment date, the calculation period and the resulting number of days (interest days), as well as the interest calculation method.

The entry options in the condition details differ according to the condition type.

Note Note

For more information on entering conditions see:

Bonds: Editing Conditions

Stocks/Shareholdings/Invest.: Editing Conditions

End of the note.