Realized Price Gains/Losses (SAP Library)

Realized Price Gains/Losses

Definition

The system calculates price gains and price losses if securities items are (partly) realized, in other words, if a positive position is reduced or a negative position increased.

Note

If a negative position becomes a positive position as a result of a position change, the price gains/losses are only calculated for the part that brings the position to zero (flows with capitalized costs are only considered on a pro rata basis).

The price gains in the security are the difference between the book value and the sale value in position currency.

The price gains in the foreign currency are the difference between the book value and the sale value in local currency.

Integration

When you purchase and sell securities, you do not post the price gains immediately. Instead, you manage them as planned records until you perform Period-End Closing. This enables you to avoid having to reverse activities unnecessarily for transactions that were not entered in chronological order.

Example

Example: Realized price gains/losses

This graphic is explained in the accompanying text

Notes on the example:

Events

At time t1, you purchase 1000 stocks at 100 DEM and enter this in the system.
At time t3, you sell 1000 stocks at 150 DEM and enter this in the system.
You conclude the purchase at time t2, but forget to enter it in the system and therefore only enter it at a later date (after t3).

System activities

At time t3, a price gain of 50,000 DEM is calculated and a corresponding planned record generated.
Provided that you have not yet performed period-end closing, you can still enter the purchase at time t2, and correct the planned record for the price gain to 30.000 DEM.
If, however, you have performed period-end closing and only realize afterwards that you forgot to enter the purchase at time t2, you first have to reverse the sale at time t3 before you can enter the purchase at time t2.