Use

This function allows you to write off the receivables that cannot be collected from your customers. This function updates both the account balances in Bank Customer Accounts (BCA) and the general ledger account balancesinyour financial accounting system.

You can update the general ledger account balances either by using the BCA individual value adjustment (IVA) feature or the Reserve for Bad Debt (RBD) component.This topic details the recording of loss on receivables by using the BCA IVA feature. For more information about the integration with RBD, see IVA and Loss on Receivables Using RBD

Integration

Posting to Financial Accounting System

You can directly post the loss on receivables to your financial accounting system without creating any individual value adjustments.

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 transaction types to the following 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 general ledger transaction types to the following transaction types:

Periodic Tasks →General Ledger Transfer →Define GL Account Assignment: Current Accounts

This defines the general ledger account to which the loss on receivables is to be posted. Assign general ledger accounts to the following general ledger transaction types:

8070 (Loss on receivables)

8080 (Loss on value adjusted receivable)

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

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

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

Account Management → Assign Medium/Payment Method to Posting Processes

Assign a medium to process160 (Loss on receivables).

Features

Loss on Receivables Posting

When you post the loss on receivables, the system ensures that the amount of loss on receivables does not exceed the account balance.

Take Individual Value Adjustment Amount Off Books

When posting loss on receivables, you can specify whether the posted individual value adjustment amount is to be taken off the books or is to remain by using the IVA Off Books indicator. Retaining the posted individual value adjustment amount enables you to provide for a further credit risk on an account even after writing off a partial loss.

You can only use the IVA Off Books indicator if you specify a fixed IVA amount.

When you post a loss on receivables:

If the IVA amount is to be taken off the books, the system reduces the amount of loss on receivables from the IVA amount. If the loss exceeds the IVA amount, the system records the difference in another payment item by using transaction type 8070 (Loss on receivables).

If the IVA amount is not to be taken off the books, the system records the loss on receivables separately and retains the existing IVA amount.

For examples about losses on receivables, see Case 2: Loss on Receivables, IVA Taken Off the Books and Case 3: Loss on Receivables, IVA Remains

Individual Value Adjustment Display

When posting the loss on receivables, you can display details of the individual value adjustment defined for the account by choosing Loss on Receivables →Display IVA .

Activities

To post the loss on receivables, go to the SAP Easy Access screen and choose Account Management → Loss on Receivables → Post.