Use

This function allows you to provide for credit risks on customer accounts by adjusting values on the balance sheet.

To record individual value adjustments, you can either use the Bank Customer Accounts (BCA) individual value adjustments (IVA) feature or the Reserve for Bad Debt (RBD) component. This topic details the BCA IVA feature. For more information about the integration with RBD, see IVA and Loss on Receivables Using RBD .

You can use this function only for customer accounts that have a debit balance.

Prerequisites

You have made the following settings in Customizing for Bank Customer Accounts (BCA) by choosing:

Account Management → Assign Transaction Types to Posting Categories

Assign the following transaction types to the posting categories:

Periodic Tasks → General Ledger Transfer → Assign Transaction Type for Payment Transaction to GL Operation

This assignment ensures that the system selects the correct general ledger account in your financial accounting system. Assign the following general ledger transaction types to these transaction types:

Periodic Tasks → General Ledger Transfer → GL Account Assignment: Individual Value Adjustment

This specifies the general ledger accounts to which the individual value adjustment amounts are to be posted. Assign general ledger accounts to the following general ledger transaction types:

4050 (IVA addition)

8050 (IVA reversal current year)

8060 (IVA reversal previous year)

9000 (Currency changeover)

We recommend that you assign a separate general ledger transaction to each posting category to enable clear identification in the general ledger accounts.

Periodic Tasks → General Ledger Transfer → Transfer Posting Payables /Receivables

This specifies the payable and receivable accounts for each account defined in the previous step.

Account Management → Assign Medium/Payment Method to Posting Processes

A ssign a medium to process 150 (individual value adjustment).

A ccount Management ® Individual Value Adjustment ® Activate Reserve for Bad Debt (RBD)

Ensure that the integration with RBD is not enabled.

Features

Planned Individual Value Adjustment Creation

You can define the individual value adjustments either as a fixed amount or percentage rate. The system treats these entries as planned individual value adjustment amounts.

To transfer the IVA amounts to your financial accounting system so that reports such as the balance sheet reflect the IVA amounts, you need to post the individual value adjustment amounts to the corresponding general ledger account. For more information, see Post Individual Value Adjustments .

Individual Value Adjustment Change

Due to a change in the economic situation, you may need to increase or decrease the planned individual value adjustment amount. The system posts the difference during the next posting run.

The system writes a change document when you create or change the individual value adjustment for an account.

Individual Value Adjustment Display

You can view the details of the planned and posted individual value adjustments for each account.

Account Master Record

The system sets the Planned Individual Value Adjustment Exists indicator on the account master record when you create a planned individual value adjustment. The product attribute settings or the Business Data Toolset (BDT) settings determine whether the indicator is displayed on the account.

Additionally, you can navigate to the Individual Value Adjustment Display screen from the account master record.

Currency Changeover

When you change over an account to a new currency (EUR) by using the Execute Currency Changeover report, the system:

Converts the planned IVA amount to the new currency

Takes the posted IVA and loss on receivables amounts off the books in the old currency and puts it on the books in the new currency.

The currency changeover postings for posted IVA amounts are given below:

(1) Old currency off books

(2) New currency on books

To enable the system to carry out this process, you need to define a special clearing account in Customizing for Bank Customer Accounts by choosing Periodic Tasks →General Ledger Transfer →GL Account Assignment: Individual Value Adjustment. Specify the clearing account for general ledger transaction type 9000 (currency changeover).

Activities

To create individual value adjustments, go to the SAP Easy Access screen and choose Account Management →Individual Value Adjustment →Create

To change the planned individual value adjustments, go to the SAP Easy Access screen and choose Account Management →Individual Value Adjustment →Change

To display the planned and posted individual value adjustments, go to the SAP Easy Access screen and choose Account Management → Individual Value Adjustment → Display