Derived Business Transactions

Definition

Derived business transactions supplement Operative Business Transactions . They are generated on the basis of the operative business transactions and are dependent on the valuation area. This means that the derived business transactions can be differ according to valuation area even if they stem from the same operative business transactions.

Use

Derived business transactions are generated in the following cases (examples):

  • When you enter a security purchase or loan disbursement involving a discount or premium and manage the position using the gross procedure. The derived business transaction is used to generate the discount or premium flow.

  • When you enter position outflows [sale, repayment, exercise, stock swap with payment and any other position outflows that are not transfer postings], the price gains and losses are generated as derived business transactions.

If amortization is required by the Position Management Procedure for the position, and the operative business transaction changes the amortized acquisition value of the position (= purchase value + capitalized costs + amortizations) , the system generates amortization flows for the total position.

See also: Amortization According to LAC and SAC

  • If you make internal transfer postings [securities account transfers, valuation class transfers, corporate actions, exercising rights, exercising OTC options], the system generates derived business transactions that transfer the positions per position component.

  • When you enter position outflows that are not transfer postings, the system generates translations that update the position components (proportionate reduction). Translations are not usually relevant for posting.

  • When you change the currency (local currency, issue currency or contract currency) over to the euro, the system generates reconciliation flows. These flows ensure that the positions are consistent for a certain date.

    Examples:

    • If, after the changeover, the position currency is the same as the valuation currency, then the position values in these currencies should also match.

    • If the position is a zero position, the value of all the position components should also be zero.

  • When you change over the issue currency or the contract currency, currency swap flows are generated to clear the old currency amounts in the general ledger and post the corresponding amounts in the new currency.

Structure

Derived business transactions can have the following status:

  • Plan

    If a flow has plan status, it has not yet been posted.

  • To be fixed

  • Fixed

    If a flow has fixed status, it has been posted (if it was relevant for posting).

  • To be reversed

  • Reversed

In the IMG activity Control of Processing of Derived Business Transactions , you define the status the derived business transactions have when they are generated:

  • Same status : The derived business transactions always have the same status as the corresponding operative business transaction.

    In the case of OTC transactions, this means that you must fix the derived transactions using the function Fix and Post Derived Business Transactions , since the related original business transactions are never fixed.

  • Plan status : The derived business transaction are always generated with plan status. To fix the derived business transactions, you use the Fix and Post Derived Business Transactions function.

Derived business transactions can be generated online or offline.

  • If you choose the online option, the system automatically generates or updates the derived business transaction for the respective valuation area immediately after the operative business transaction is processed (created, changed, or posted).

If the system finds existing derived business transactions that have already been fixed but are no longer up-to-date, it generates these in the To be reversed status and the current derived business transactions in the To be fixed status. Posting and fixing these derived business transactions takes place using the function Fix, Post, Reverse Business Transactions (TPM10).

Note Note

If you have a large amount of data, generating the derived business transactions online can impair performance (especially if they are fixed immediately). In such cases you can process the derived business transactions offline.

End of the note.

  • If you choose offline processing, the derived business transactions are not generated directly when you create, change, or post an operative business transaction. Instead, you generate them using the Update Derived Business Transactions function (transaction TPM27). You can also post and fix flows using the Fix and Post Derived Business Transactions function (transaction TPM18).

Integration

Customizing

In Customizing for Treasury and Risk Management , carry out the activities by choosing Start of the navigation path Transaction Manager Next navigation step General Settings Next navigation step Accounting Next navigation step Derived Business Transactions. End of the navigation path

See also: Assigning Update Types for Derived Business Transactions

Application

The application menus for the various areas contain the following functions, which you access by choosing Start of the navigation path Accounting Next navigation step Derived Business Transactions End of the navigation path :

Update Derived Business Transactions [transaction TPM27]

You only need to use this function if you have specified that the derived business transactions should be generated offline in the IMG activity Control of Processing of Derived Business Transactions. In this case, the system does not generate the derived business transactions for the valuation areas automatically when you create, change or post an operative business transaction.

Note Note

If you have chosen offline processing, the position components (such as the book values) are not always up-to-date.

End of the note.

If you have a large amount of data, it can be useful to opt for offline processing and schedule the update run for derived business transactions [RTPM_TRL_DERIVE_TRANSACTIONS] as a batch job, for example, every evening.

If you have chosen to have the derived business transactions generated online in the IMG activity Control of Processing of Derived Business Transactions , the system recalculates the derived business transactions every time you process an operative business transaction, which means that they are always up-to-date.

Post and Fix Derived Business Transactions [transaction TPM18]

This function changes the status of derived business transaction flows from planned to fixed. At the same time, the system posts the flows that are relevant for posting (= the flows relating to update types that have account determination settings).

Examples

Example: Discount With Securities Purchase (Gross Procedure)

Example: Valuation and Transfer Not Affecting Income

Example: Exercise of a Put Warrant With Delivery