AC825_46C_Money Market -Foreign Exchage and Derivatives

8/17/2019 AC825_46C_Money Market -Foreign Exchage and Derivatives

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SAP AG 1999

AC825 Money Market, Foreign Exchange andDerivatives

SAP AG

AC825AC825Money Market,

Foreign Exchange andDerivatives

Money Market,

Foreign Exchange andDerivatives

R/3 System

Release 4.6C

December 2000

Material number 5004 1945


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SAP AG 1999

Copyright 2000 SAP AG. All rights reserved.

Neither this training manual nor any part thereof may

be copied or reproduced in any form or by any means,

or translated into another language, without the prior

consent of SAP AG. The information contained in this

document is subject to change and supplement without prior

notice.

All rights reserved.

Copyright

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Treasury

Treasury Overview

AC030 3 days

Level 2 Level 3

Financial Accounting

and Reporting

AC010 5 days

Cash BudgetManagement

AC215 1 day

Basic Functions in

Treasury Management

AC810 3 days

Cash ManagementAC805 3 days

Money Market, Foreign

Exchange and Derivatives

AC825 3 days

Loans Management for Financial Services

AC815 5 days

Loans Management for Corporates

AC816 3 days

Securities Management

AC820 4 days

Market Risk Management

AC830 3 days


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Mandatory

AC030 - Treasury Overview

AC810 - Basic Functions in Treasury

Management

Course Prerequisites

AC825 will provide you with detailed knowledge, procedures and the corresponding system

configuration.


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Target Audience

Participants:

Project teams

Project leaders

Administrators

Duration: 3 days

User notes

The training materials were not made for self-study, but rather as a supplement to the information

provided by the trainer. Thus, space is available for your own notes.

The exercises are in addition to the examples used in this course. There may not be sufficient time to

complete all exercises. In this case, you can use the materials afterwards to enhance your learning.


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Course Overview

Course goals

Course objectives Course content

Course overview diagram

Main business scenario

Contents:


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Course Goals

This course will enable you to:

Conclude and manage transactions in the Money

Market, Foreign Exchange and Derivatives areas

Configure and carry out the typical business

processes in these areas


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Course Objectives

At the conclusion of this course, you will be able to:

Perform the trading and processing activities in

Money Market, Foreign Exchange and Derivatives

Use the tools that support processing and

Integrate the above areas with Accounting and Cash

Management


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Course Content

Chapter 5 Foreign Exchange

Chapter 6 Derivatives

Chapter 7 Transaction CurrencyChangeover

Chapter 1 Course Overview

Chapter 2 Treasury ManagementOverview

Chapter 3 Basics

Chapter 4 Money Market

Preface


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Course Overview Diagram

Basic Principles

Money Market

Treasury Management Overview

Foreign Exchange

Derivatives

Transaction Currency Changeover


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Main Business Scenario

You have successfully installed or are already using

the SAP R/3 FI module. Now you wish to implement

SAP R/3 Treasury Management.

As preparation, you have already made the basic

settings in SAP R/3 Treasury Management.

You would now like to use Money Market, Foreign

Exchange and Derivatives.

You are a member of a project team that will make both the basic settings and all settings necessary

for displaying financial transactions in SAP R/3 Treasury Management.


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Contents:

SAP Treasury Overview

Selection of Relevant Product Types

Identifying Treasury Processes

Treasury Management Functions

The AC825 training course shows how transactions in the areas of money market, foreign exchange

and derivatives are concluded and managed. The main focus is on typical transaction processes and

their implementation using appropriate Customizing settings.

The courses AC030 "Treasury Overview" and AC810 "Basic Functions of Treasury Management"

are prerequisites for this course.


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Treasury Management Overview:Unit Objectives

At the conclusion of this unit, you will be able to:

Provide an overview of SAP R/3 Treasury

Provide an overview of the relevant product types

Explain the different Treasury processes and standard

functions of SAP Treasury Management


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Basic Principles

Money Market

Treasury Management OverviewTreasury Management Overview

Foreign Exchange

Derivatives



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Treasury Management Overview: BusinessScenario

Before beginning your work in the project team, you

would like to acquire an overview of SAP R/3 Treasury.

Which basic settings form the basis for representing

financial transactions?

Which products and processes can be portrayed by

the new Treasury system and what functions are

available?




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SAP Treasury Overview

Financial Accounting

Bank data

Businesspartner

Market data

DownloadMarket Risk Management:

• Interest/currency

exposure

• Sensitivities

• Mark-to-market value

• Risk analysis/simulation

• Value at risk

Cash Management:

• Electronic banking

• Liquidity status

• Integration of the operating

systems

• Control functions

Transaction Management:

• Managing financial

transactions and positions

• Transfer to Financial

Accounting

• Flexible reporting and

portfolio analysis

• Datafeed interface

DD CC DD CC

100100100100

TMTM

SecuritiesSecuritiesDerivativesDerivatives

Cash Foreign exchangeCash Foreign exchange

LoansLoans

Logistics

The objective of the SAP Treasury module is to ensure efficient liquidity, transaction and risk

management.

SAP Treasury comprises three areas:

Cash Management (CM) covers electronic banking and provides functions for liquidity analysis.

Treasury Management (TM) and Loans (LO) support the management of financial transactionsand positions.

Market Risk Management (MRM) provides methods and procedures for analyzing interest rate

and currency positions.


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Mortgageloans

Borrower'snote loans

Policy loans Other loans

Fixed-termdeposits

Deposits atnotice

Commercialpaper

Product types

DerivativesForeign ExchangeLoansSecuritiesMoney Market

Stocks Bonds

subscriptionrights

Investmentcertificates

Bonds Convertible

bonds Warrant bonds Warrants

Forexspottransactions

Forwardexchangetransactions

Forex swaps

CAP/Floor FRA Swaps

- Interest rate- Currency

OTCOptions/Futures- Currency- Interest rate- Stocks- Swaption, IRG

Futures

Hedging toolsInvestment/borrowing

instruments

Financial Instruments Available

In the short-term area, money market transactions and foreign exchange transactions allow you

to bridge liquidity deficits or surpluses. In the mid- to long-term area, investments and borrowings

are represented by securities transactions and loan transactions.

Derivative financial instruments, on the other hand, help you hedge against interest rate and

currency risks.


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Revision of plannedtargets

Feedback

Correctivemeasures

Documentation and control functions

Analysis andtrading process

Transaction and positionmanagement process

AnalysisAnalysis

(planning)(planning)DecisionDecision

FinancialFinancialtransactionstransactions

Identifying Treasury Processes

Revenue /Revenue /

risk goalsrisk goals

From a strategic point of view, the analysis and trading process is the starting point for the various

Treasury processes. At this stage, you identify and analyze the liquidity and risk positions on the

basis of the risk and revenue targets you have defined. Special tools and methods are available in

SAP Treasury. You can use these to perform an integrated analysis of your enterprise's financial and

risk situation.

Once you have decided to complete certain financial transactions, you enter the trading processes forthese transactions in Treasury Management (TM/LO). Treasury Management also contains functions

for the subsequent management of these transactions and the related financial positions.

A range of documentation and control functions are available for all Treasury activities. These allow

you to perform evaluations for specific instruments or across the whole system and ensure that the

various tasks are documented and controlled properly for Treasury and Financial Accounting.


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Postings

Payment

transactions

Reverse

Accrual/deferral

Valuation

Create offer/order/contract

Exercise/Expiration

Terminations

Rollovers

Exercise of rights

User authorization

Limit management

Release

Settlement/control

Interest rate adjustment

Netting

Referencing

Confirmation letters

Account transfer postings

Corporate actions

TradingTrading Back officeBack office AccountingAccounting

Transaction and Position Management Process

As part of the processes for transaction and position management, we distinguish between the

following areas:

In the trading area, you create transactions and exercise rights.

In the back office, the settlement of the business transactions is completed. This includes checkingthem and transferring relevant posting transactions to Financial Accounting. Here, you also manage

processes relating to position management such as securities account transfers.

The accounting area includes posting activities that do not result directly from trading and back

office processes. Examples of these are incoming payments postings (such as interest earned or

dividends) or depreciation postings which result from a position valuation.


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Complete management of financial transactions and positions

Support of trading and back office functions

Functions to track, check and release transactions

Data transfer to Financial Accounting

(including accruals/deferrals and valuations)

Flexible settings to accommodate company-

specific transactions and position management

processes

Assignment of financial transactions to portfolios or

managing them in securities accounts

Flexible reporting and portfolio analysis

Datafeed interface

Treasury Management: Functions


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SAP Treasury comprises

Cash Management

Treasury Management and Loans Management

Market Risk Management

As far as short-term financial instruments are concerned,

the SAP System differentiates between Money Market

and Foreign Exchange.

Derivative financial instruments are used to hedge

exchange rate and interest rate risks.

The functions of Treasury Management incorporate

managing transactions, assigning financial transactions

to portfolios, and also reporting, analysis and the

datafeed interface.

Treasury Management Overview: Unit Summary


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Basic Principles

Contents:

Basic Settings - Financial Transactions

Business Partner


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Basic Principles: Unit Objectives


Explain the most important terms and basic

settings for financial transactions in Money Market,

Foreign Exchange and Derivatives

Explain the data structure setup for business

partners


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Basic PrinciplesBasic Principles

Money Market


Foreign Exchange

Derivatives



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Basic Principles: Business Scenario

Before you can create your financial transactions, you

must define your products in the system settings and

manage these according to the circumstances in your enterprise.

You must also make entries in the system concerning

your business partners.

How can you automatically receive proposals for

business partner-specific settings when you are

creating transactions?




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Basic Settings - Financial Transactions

Product types/categories

Financial transaction types/categories

Activity categories

Processing categories

Flow types/categories

Condition types/categories


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Customizing Structure: Money Market, ForeignExchange and Derivatives

USER LEVEL

Product typeProduct type

Prod. cat.Prod. cat. Transaction cat.(Activity cat.)

Processing cat.

Transaction cat.(Activity cat.)

Processing cat.

Flow category/condition cat.

Flow category/condition cat.

Calculation cat.Calculation cat.

Trans. typeTrans. type Condition typeCondition type

SYSTEM LEVEL

Flow typeFlow type


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Product Categories - Product Types

USER LEVEL

SYSTEM LEVEL

510 Fixed-term deposit600 Foreign exchange610 CAP/FLOOR620 SWAP

:

010 Stock :

040 Bond

:

Product cat.Product cat.Product cat.

- Fixed-term dep.(overnight)

- Fixed-term deposits(term)

:- Interest rate swap- Currency swap :

Product typeProduct type- Fully paid stock- Partly paid stock- Floating ratebond

- Fixed-interestsecurity . . .

Product categories cover the basic categories of the various financial investment or borrowing

transactions and also serve to classify financial instruments. Product categories are relevant in all

company codes and are determined by the system, that is, they cannot be changed by the user.

Product types serve to further refine the product categories at the user level and, unlike product

categories, they can be defined by the user. The product type definition contains the business

framework that applies to financial transactions involving this product type. A product type isassigned to one product category only. Multiple product types may refer to a single product category.

The user creates and processes individual financial transactions on the basis of product types.

Using the product type,

you can assign various back office practices

you can make selections in Reporting

you can assign various structure characteristics

you can assign various valuation parameters in Market Risk Management (for example, different

yield curves)


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Product Categories - Product Types - Examples

Product catsProduct catsFinan. instrumentsFinan. instrumentsFinan. instruments Product typesProduct types

Foreign exchange

Derivatives

Money mkt 510 Fixed-term deposit Fixed-term dep. (overnight)Fixed-term deposit Fixed-term dep. (overnight) 520 Deposit at notice Fixed-term dep. (term)520 Deposit at notice Fixed-term dep. (term)

530 Comm. Paper 530 Comm. Paper Paper Paper

540 Cash flow trans.540 Cash flow trans.

600 Foreign exchange Forex EXTERNAL

INTERNAL610 CAP/FLOOR CAP

FLOOR

620 SWAP Interest rate swap

Currency swap

630 FRA FRA

700 Futures Currency futures

750 Tradeable options Stock option - No release

Index option - No release

760 OTC Option Swaption

Currency option (OTC)

Currency barrier option

IRG

The product types are predefined by the system. The user can assign product types to each of the

individual product categories.


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Product Type Customizing: Fixed-Term Deposit

Product type

TextProduct cat. Fixed-term deposit

Default value for transactions

Int. calc. method

Effective interest calculation

Eff. int. meth.

51A

Fixed-term deposit EXTERNAL510

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AIBD/ISMA

Product types represent the typical financial transactions that are carried out in your company.

Examples of product types in the Money Market area include fixed-term deposits or deposits at

notice. If the standard product types delivered with the system are not used, you can define other

product types. This allows differentiated evaluations or different processing rules for external and

internal transactions. The product types contain information about structure characteristics.

The product type definition contains a description of the business framework that applies to financialtransactions of this product type.

You then create and manage financial transactions and manage positions on the basis of these

product types.


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100 Investment200 Borrowing

:

Financial Transaction Types

USER LEVEL

SYSTEM LEVEL


ProductcategoryProductcategory

- Investment- Borrowing- Spot- Forward- Purchase- Sale- Swap :

Trans. typeTrans. type

Trans. cat.Trans. cat.

510 Fixed-term dep.600 Forex610 CAP/FLOOR620 SWAP

:


- Fixed-term dep.(term)


The financial transaction type determines what type of transactions can be carried out with a certain

product type and, at the same time, controls the transaction and position management process.

Examples of financial transaction types include the investment or borrowing of fixed-term deposits,

and both spot and forward transactions with foreign exchange.

You can use the basic transaction types provided by SAP or you can modify these to suit thefinancial transaction categories specific to your company.

You can set up user-specific versions of the transaction types for each of the Money Market, Foreign

Exchange and Derivatives areas.


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Customizing: Financial Transaction Types

Product type Fixed-term dep. EXTERNAL

Transactn type Investment

Trans. category

Number ranges

Transactions

Offers Simulations

Back office

Processing cat.

Automatic posting release

Limit management

Limit group

Commercial Paper

Deposit at notice ...

51A

100

100

01

02 03

00002

The combination of a product type with a financial transaction type - for example, product type -

"fixed-term deposit (overnight deposit)" with the transaction type, "investment", - uniquely

determines a financial transaction.

This financial transaction undergoes various activities in the company. You determine how the

transaction is processed, that is, you establish the sequence of these activities, when you choose a

processing category as part of the definition of the transaction type.


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No From number To number Number status Ext.

01 0000000000001 0000000099999 13

02 0000000100000 0000000JJJJ99 100000

03 0000000200000 0000000299999 200001

04 0000000300000 0000000399999 300028

05 0000000400000 0000000499999 400014

Number range obj. Fin. transaction

Company code 1000 IDES AG

Intervals

Number Ranges for Transaction Types

Each transaction entered in the application is recorded in the system with a transaction number.

When you are defining transaction types in Customizing, you maintain a number range interval. The

system assigns the numbers in the application according to this interval. You must define this

interval in advance and you also determine whether the number allocation is carried out internally

(by the system) or externally (by the user).


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Activity Category

USER LEVEL


Product cat.Product cat.


:


Transaction typeTransaction type

Transaction cat.Transaction cat.


:

Activity cat.Activity cat.

10 Contract

11 Rollover :

SYSTEM LEVEL




Activity categories in the Money Market, Foreign Exchange and Derivatives component areas

control which activities are possible for a particular financial transaction category.

Example:

Product category Transaction category Activity category

510 Fixed-term deposit 100 Investment 10 Contract11 Rollover

20 Contract settlement

21 Rollover settlement

600 Foreign exchange 101 Spot exchange transaction 10 Order

15 Order expiration

20 Contract

30 Settlement

The activity categories are displayed in the financial transaction - under status - for information

purposes.

The activity category provides the basis for the history, and it also controls the correspondence.


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Transaction - Activity Categories: History

Company code

Product type

Transaction type

1000 IDES AG Transaction 1501

51A Fixed-term dep. EXTERNAL

100 Investment

Acty

0001

0002

0003

0004

0005

Activity category

Contract

Contract settlement

Status

Replaced

Active

Transition function

New contract

Activity transition

During its processing in your company, a financial transaction goes through various activities. These

activities, in turn, have different statuses.

Example: With the completion of the "contract" activity, a transaction is identified as legally

binding.

The completion of the "settlement" activity is a sign that the recorded transaction data has beenchecked.


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Processing Categories

USER LEVEL


Product cat.Product cat.


:


Trans. typeTrans. type

Transaction cat.Transaction cat.


:

Activity categoryActivity category

10 Contract

11 Rollover :

1 With settlement activities

2 Without settlement

activities

Processing cat.Processing cat.

SYSTEM LEVEL




The processing sequence of a financial transaction is determined either by the processing categories

(Money market, Foreign exchange, Derivatives, Securities) or by status transitions (Loans).

Processing categories and status transitions establish the sequence of the individual activities in a

financial transaction. They describe the processing steps that are carried out in the respective

company areas from the order entry in trading, via processing, right up to the transfer of the data to

Financial Accounting.

In this way, you determine the company-specific chain of activities that must be gone through for a

financial transaction of a certain product type.


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Trans. type Investment

Trans. cat.

Number ranges

Transactions

Offers Simulations

Back office

Processing cat.

Automatic posting release

...

51A

100

100

01

02 03

00002

Processing category

00001 = without settlement activities

00002 = with settlement activities

Customizing Transaction Types - ProcessingCategories

Processing categories are predefined by the system based on the product category and transaction

category. From a range of alternative processing categories predefined in the system, you choose a

processing category for each individual financial transaction.

Example:

Fixed-term deposit Product cat. Processing category510 00001 Without settlement rules

00002 With settlement rules

Foreign exchange 600 00101 Order - Contract- Settlement

00102 Order - Contract


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Flow Types

USER LEVEL

Condition cat.Condition cat. Flow cat.Flow cat.

AA- InflowTD - Dividend

Calculation cat.Calculation cat.

AA- InflowTD - Dividend

- Expected dividend- Bonus paid- Variable interest- Repayment- Interest rate adj.- Repayment rate :

Condition typeCondition type1000 - Security purch.5013 - Dividend

1100 - Principal increase

Flow typeFlow type

Interest

Repayment

:

SYSTEM LEVEL

Productcategory

Trans. cat.

Productcategory

Trans. cat.Trans. cat.

Product type

Trans. type

Product type

Trans. type

Flow types describe various changes in cash flows. All the flows involved in a transaction are the

basis for generating the cash flow in financial mathematics and also further processing such as

posting. The cash flow contains all flow records in chronological order and is used as the basis for

updating transaction data in FI, Cash Management and Market Risk Management. Typical flow types

are fixed or variable interest, increases in principal, and commissions.

Each flow type is assigned to exactly one flow category, while several flow types may belong to oneflow category. For example, both fixed and variable interest are assigned to the "interest" flow

category.

The payment flows for both the Cash flow and Accounting are controlled by two indicators that must

be assigned to each flow type. The calculation category controls the finance-mathematical

processing of the flow for the cash flow. The flow category controls the accounting treatment of the

flow.

Flows can result from conditions (e.g. interest rate flows), from manual entries (e.g. charges), from

accrual/deferral runs (e.g. interest accruals/deferrals) or from valuation runs (e.g. depreciation). Flow

types include accounting flows such as inflow (e.g. purchase of securities), outflow (e.g. repayment),

expenditure, or earnings. Cash flow-related flows include purchase/sale of securities, interest,

repayment or charges.


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Customizing Flow Types

Flow type

Name

Control

Classification

Flow cat. Principal increase

Calculat. cat. Inflow (generic)

Relevant to CM Relevant to position Rel. To valuation

Relevant to posting Rel. To P/L Rel. for acc./defer.

Payment management ...

Effective interest calculation ...

1100

Principal increase

Structure characteristics

10

AA

Flow types are defined in Customizing:

The classifications are fixed in the system and distinguish the flow types according to business

criteria such as structure characteristics, accrual/deferral, valuation, etc.

Relevant to Cash Management: indicates whether the flow is to be updated in Cash Management.

Relevant to posting: indicates whether the flow is transferred to FI.

Relevant to position/relevant to profit/loss: refers to selection for display in drilldown reporting.

Relevant to valuation/relevant to accrual/deferral: indicates whether the flow is included in a

valuation run/accrual/deferral run.

Effective interest rate calculation: indicates whether this flow is included in the effective interest

rate calculation.

Payment request: indicates whether this flow is permitted for the generation of a payment request.

Individual payment: indicates whether this flow may only be settled individually in a payment

request.


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Assignment of Flow Types to Transaction Types

Product type Fixed-term deposit EXTERNAL

Transaction type Investment

Flow type Principal increase

51A

100

1100


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Condition Types

USER LEVEL

SYSTEM LEVEL

Condition cat.Condition cat.

- Expected dividend- Bonus paid- Variable interest- Nominal interest- Repayment- Interest rateadjustment.

- Repayment rate

:

Condition typeCondition type

Nominal interest

Final repayment :

Product cat.

Transactioncat.

Product cat.

Transactioncat.

Product type

Transactiontype

Product type

Transactiontype

Financial transactions are represented within SAP Treasury on the basis of the flow and condition

concept. Conditions are contractually agreed components of a financial transaction. You can define,

for example, various interest rate, dividend or repayment provisions as condition types. By assigning

condition types to product/transaction types, you ensure that each product type has its specific

structure characteristics assigned to it. This way you can define different conditions for a condition

type (for example, interest) over a time period. Condition categories are the basis for processing the condition types and they further refine the

classification of flows and conditions. Examples of condition categories are principal increases, final

repayments or nominal interest.

The user defines condition types on the basis of condition categories and assigns them to the

respective product/transaction type.


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Customizing Condition Types

Condition type

Name (short)

Cond. type text

Name (long)

Control

Classification

Cond. category Nominal interest

Calculat. cat. Nominal interest

Generated flow type Nominal interest

20

Structure characteristics

TZ

1200

Nominal int.

Nominal interest

Nominal interest

1200

The main task of conditions is the automatic generation of flows. The flow types that you assign to

the condition types are elements of the cash flow and, therefore, of accounting.

Note that there are condition types that do not produce flow types (for example, interest rate

adjustments, repayment settlement).


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Product type

Transaction type

Condition type

Direction

100 Investment

1200

0 Incoming and outgoing

Nominal interest

51A Fixed-term dep. EXTERNAL

0

Assignment of Condition Types to TransactionTypes

By assigning condition types (and flow types) to product/transaction types, you can structure them

very flexibly.


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Business Partner

Roles of a business partner

Standing instructions

Transaction authorizations

Payment details

Correspondence

Derived flows


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Business Partner - Basic Principles

Creation of financial transactionsCreation of financial transactions

Creation of business partnersCreation of business partners

Creation of CustomizingCreation of Customizing

Control

dataRoles Relationships General

Prerequisite

for

Prerequisite

for

Based on the analysis of the liquidity situation (CM) or the risk situation (MRM), certain financial

transactions are carried out with business partners taking the pre-determined risk and revenue

objectives into account.

Example:

Due to a cash surplus, an amount is invested as a fixed term-deposit with business partner bank A.

The recording of the financial transaction is based both on Customizing settings regarding the

transaction architecture (product types, financial transaction types ... ), and also on certain

application data, for example, business partner details (address, bank details ...).

In SAP Treasury each financial transaction is recorded as a transaction with a (specific) business

partner. For this reason the business partner data must be maintained before the transaction is

recorded.

The options available to you when you create a business partner depend on the settings you have

made in Customizing.


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Business Partner - Roles and Functions

Borrower Borrower

Agent/CounterpartyAgent/Counterparty

NotaryNotary

Surveyor Surveyor

Natural

person

Organization

Issuer Issuer

Depository bankDepository bank

TrusteeTrustee

Payer/eePayer/ee

Assigning institutionAssigning institutionGuarantor Guarantor

Interested party

Treasury partner

Beneficiary

A business partner is either

a natural person or

an organization or

a group of persons or organizations with which you have a business interest.

Financial transactions are concluded with the business partner within SAP Treasury. Typical

business partners include banks, brokers, or a central Treasury department.

You create a master record for each business partner.

You can assign several roles/functions to a business partner.

A role (= a role category) is a set of properties that a business partner must have in order to carry out

certain business transactions with you. The functions of the business partner in financial transactions

are described in business partner roles (categories).

Example:

A business partner can act as a borrower or as a Treasury partner.


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Business Partners: Standing Instructions

Business partner ABusiness partner A

PaymentPayment

detailsdetailsTransactionTransaction

authorizationsauthorizations

DerivedDerived

flowsflowsCorrespondenceCorrespondence

Standing instructions are general agreements made with a business partner for processing similar

types of transactions. You can access the business partner standing instructions for payment details,

correspondence, authorizations and derived flows using the tabs on the business partner maintenance

screen. The integration of the standing instructions with the business partner data means that the

release workflow for business partners can also be applied to the standing instructions. You can also

access the standing instructions using a separate menu path. Agreements can cover:

Authorizations

Which financial transactions may be concluded with this partner?

Payment details

For transactions with business partner A ==> The system proposes the payment details for

business partner A in the transaction

Correspondence

For transactions with business partner A ==> Fixed setting: Which correspondence is

generated for which transactions?

Derived flows

For transactions with business partner A ==> Fixed setting: If the transaction with business

partner A contains flow X, add taxes

amounting to y% of X.


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Business Partner - Transaction Authorization

Assign

Business partner A

Partner authorization

Authorization

X

Treasury

Money market

Fixed-term dep.

51 A Fixed-term dep.100 Investment

200 Borrowing

Deposit at notice

52 A Dep. At notice100 Investment

200 Borrowing

In order to make use of a business partner (BP), you must

create the BP,

release the BP for use and

authorize the BP as a partner for specific financial transactions.

You can only grant transaction authorizations if the business partner - once set up - is released and

is not designated for deletion.

The transaction authorizations control which financial transactions are permitted with a business

partner. You can assign transaction authorizations at the following levels:

Contract type

Product category

Product type

Transaction type

Each business partner must be authorized explicitly in each company code.


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Basic Principles: Unit Summary

The definition and creation of master records is an

important prerequisite for the processing of Money

Market, Foreign Exchange and Derivatives

transactions.

You determine, for example, the authorizations,

payment details and correspondence requirements.

You can assign different roles to the business

partner.

By means of the transaction authorization, you

determine which financial transactions can be

carried out with a business partner.

You can create standing instructions for specific

business partners. These include payment details,different methods of correspondence, and derived

flows.


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Data for the Exercises

Explanation of the symbols used in the exercises and solutions

Exercises

Solutions

Unit objectives

Business scenario

Tips & tricks

Warning or attention

Data in the exercises

Data Data in the training system Data in the IDES system

Company codes TR00 to TR20 1000

G/L accounts 113100, 113105, 113113

113200, 113205, 113213

113100, 113105, 113113

113200, 113205, 113213

Treasury business

partners

DEUBA – Deutsche Bank

CITI – Citibank

1000 – Deutsche Bank

Grouping (CM) BANKS, BANK-ACTUAL,

PERSONS, TOTAL

BANKS, BANK-ACTUAL,

PERSONS, TOTAL

Note:

Create transactions in UNI, CHF or USD. Exchange rates are maintained only in these

currencies.

Do not delete/change existing entries in Customizing. You must make new entries in

each case.


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Exercises

Unit: Basic Principles

Topic: Basic Settings - Financial Transactions

At the conclusion of these exercises, you will be able to:

• Set up a forward exchange product in SAP R/3 Treasury Management.

You would like to trade a new product in your Treasury department. To

do this, you need to introduce the product to your system.

1-1 Create your own product type - FOREX TRANSACTION.

The forex product type has the following ID: DXX (XX = Your group number), text

and short text: FOREXXX.

The new product type is assigned to the product category, 600 - Forex.

1-2 Based on your new product type, define a new transaction type for a forward exchangetransaction under the ID, GXX (XX = your group ID) FORWARDXX.

• Transaction category is 100 - Forex transaction.

• The back office processing category is Order-contract (00102).

• The number range for the forward exchange transaction is 01.

Choose number range '02' for offers and number range '03' for simulations.

•Posting release should be automatic - this means that the transaction does not haveto be released by a second user.

1-3 Check the predefined flow types for forex transactions.

Take a special look at charges, buying and selling.

Double click on a line to see the relevant details screen.


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1-4 Assign the following existing flow types to your transaction type, GXX (in

combination with your product type DXX):

• Charges - Forex transaction (Incoming and outgoing)

• Purchase - Forex (Incoming)

• Sale - Forex (Outgoing)

F8 takes you to the next entry .


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Solutions

Unit: Basic Principles

Topic: Basic Settings - Financial Transactions

1-1 Solution to the step: Defining your own foreign exchange transaction - product

type.

Customizing:

Treasury

Treasury Management

Foreign Exchange

Transaction Management

Product Types

Define Product Types

Button: New entries

Field name or data type Values

Product type DXX

(XX = Your group number)

Text FOREXXX.

Short text FOREXXX. Product category 600

⇒ Save

1-2 Solution to the step: Defining your own foreign exchange transaction type.

Customizing:

Treasury

Treasury Management

Foreign ExchangeTransaction Management

Transaction Types

Define Transaction Types

Button: New entries



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Product type DXX


Transaction type GXX

Transaction category 100

Number ranges - Transactions 01

Number ranges - Offers 02

Number ranges - Underlyings No entry Number ranges - Simulations 03

Processing category 00102

Automatic posting release Set the flag

Limit group 602

⇒ Save

1-3 Solution to the step: Checking the predefined flow types.

Customizing:

Treasury

Treasury Management

Foreign Exchange


Flow Types

Define Flow Types

Take a special look at charges, buying and selling.

Double click on a line to see the relevant details screen.


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1-4 Solution to the step: Assigning flow types to the new transaction type.

Customizing:

Treasury

Treasury Management

Foreign Exchange


Flow Types Assign Flow Types to Transaction Type

Button: New entries


Product type DXX


Transaction type GXX

Charges:

Flow type 0010

Direction 0

Purchase:

Flow type 1000

Direction 2

Sale:

Flow type 2000

Direction 1

F8 takes you to the next entry.

⇒ Save


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Money MarketMoney Market

Contents:

Topic 1 Introduction to Money Market

Topic 2 Trading functions

Topic 3 Back office functions

Topic 4 Accounting functions

Topic 5 Special functions

Topic 6 Special Features of Deposit at

Notice/Commercial Paper/

Cash Flow Transactions

Topic 7 Information system


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Money Market: Unit Objectives


Perform trading and back office activities in MoneyMarket using the example of a fixed-term deposit

transaction

Use the tools that support processing and

Carry out the integration with Financial Accounting

and Cash Management


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Basic Principles

Money MarketMoney Market


Foreign Exchange

Derivatives



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Money Market: Business scenario

After you have made the necessary Customizing

settings and created the business partners in the

system, you would like to get an overview of the

functions in Money Market.

As a user, what must you enter in the trading area in

order to create a financial transaction?

How can you map your back office department in the

SAP R/3 System?

What additional functions exist?

How can you ensure the integration of Treasury

transactions in Financial Accounting?




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Product types in Money Market

Analysis and trading process

Introduction to Money Market (Topic 1)


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Money Market - Overview

Money Market

management in R/3

Master data:

Basic settings

Business partners

Transaction authorizations

Payment details

Correspondence

Currencies

Information system - evaluation reports

Execution

of

financial transactions

R/3 Financial AccountingR/3 Financial Accounting

Before using money market management, you must maintain master data. You must

create your business partners, assign specific roles to them, and maintain transaction

authorizations,

set up standing instructions (correspondence, payment details) and, if necessary, release the

business partner. You can then define money market transactions in the system.

There are numerous functions at your disposal in the system for position management of these

transactions.

All activities that lead to changes in the G/L accounts are automatically transferred to SAP R/3

Financial Accounting.


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Money Market Product Types

Fixed-termdeposits

Deposits atnotice

CommercialPaper

Product types

DerivativesForeign ExchangeLoansSecuritiesMoney Market

Hedging instrumentsInvestment/borrowing

instruments

Money Market transactions are used to invest or borrow liquid funds in the short to medium term.

On the basis of surpluses or deficits determined in Cash Management, you can implement the

planning decisions in Money Market. The effects of these transactions on liquidity (with the

appropriate value date at the time of investment/borrowing and due date) are then shown directly in

Cash Management.

The product types in Money Market include:

fixed-term deposits (overnight deposits, time deposits)

deposits at notice

Commercial Paper

cash flow transactions

Cash flow transactions in Money Market enable you to represent a wide range of transactions. You

enter the term manually and also the cash flow that results from the particular structure of the

transaction. This includes position changes, expenses, revenues, and payments.


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Time Deposits

Fixed-term deposits

Due date arranged from the outset

Fixed interest for the whole term (at least 30 days)

Rollover facility

Overnight Money

Term only lasts one day (current practice until further notice)

Deposit at notice

Concluded for an unspecified time period

Due date depends on the period of notice

Fixed-term deposit trading (including overnight money and euro money) incorporates the transaction

types, fixed-term deposit investment and fixed-term deposit borrowing. If the authorized business

partners and corresponding payment details are already defined in the system, the only necessary

entries are structure characteristics and conditions.

When trading with deposits at notice, you carry out investment and borrowing without defined due

dates. The period of notice, the payment date, and the interest payment pattern are entered in additionto the amounts and conditions.


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Commercial Paper

Short-term, discounted bearer bond

No interest payments during the term

Term: 1 week to 1 year (on average 2 months)

Issuer and investor enter directly into a business relationship and

agree on a repayment amount which the debtor pays to the creditor

at the end of the term.

This repayment amount is discounted to the start of the term using

the required yield. The investor pays the amount calculated to the

debtor at the start of the term.

Banks act as 'DEALERS' without assuming the placing risk.

Commercial Paper trading includes the purchase and sale of individual Commercial Paper tranches.

A characteristic of Commercial Papers is that no interest payments arise during the term. By entering

a nominal amount and the yield to be achieved, the payment amount that the investor has to pay to

the debtor at the start of the term is determined via discounting. The interest calculation can

alternatively be determined on the basis of a given rate.

At the start of the term, the cash flow shows the principal increase as the nominal amount togetherwith the discounting amount. At the end of the term, the repayment of the nominal amount is shown.

As a second variant, you can show the discounted principal increase at the start of the term, and then

the repayment of the cash value and the interest rate flow at the end of the term .


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Transaction and position management process

Financial transaction - initial screen

Additional functions

Trading Functions (Topic 2)


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Transaction and Position Management Process:Fixed-Term Deposit

Postings

Payment

transactions

Accrual/deferral

Valuation

Reversals

Create order/contract

Rollovers

Reversals

Transaction history

Settlement/

checking

Netting

Confirmation letters

Reversals

Transaction history

User authorization

Limit management

Release

TradingTrading Back officeBack office AccountingAccounting

The organizational procedures of Treasury transaction management can be split up into several

levels:

You can create a Money Market transaction either as an offer or directly as a contract.

The activity sequence to be followed is dependent on the processing category you selected in

Customizing (with/without settlement). Within transaction management, you can branch into partner management from each application in

order to create, display or change business partners and also to maintain their payment details.

Each activity within transaction management (contract, processing, etc.) can be analyzed in Cash

Management.


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Trading: Entering a Fixed-Term Deposit

Financial transactions

are allocated to the related organizational unit

(company code) within your company. various organizational structures possible for corporate groups

are concluded with a business partner

internal and external (banks) business partners

are concluded for a specific product/transaction type

product type and transaction type can be defined to suit the company

may be created with different processing methods

In the Trading area, the main functions for entering and changing financial transaction data are

grouped together. To organize your financial transactions more efficiently, you first need to enter the

following basic data:

Which organizational entity (company code) is carrying out the financial transaction? Especially

in more complex organizational structures - such as central Treasury management - this assignmentallows you to distinguish between different corporate areas.

Which financial transaction is being carried out? This determines the product type and

transaction type as well as relevant processing rules.

Who are you concluding the financial transaction with? Each financial transaction is linked to a

business partner. The data stored for the business partner offers considerable scope for

rationalization. For example, if the business partner always uses the same bank and payment details,

these details can be automatically linked to the financial transactions. You can also restrict the

product types that may be traded with a particular business partner.


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Trading Support

Entry and processing aids- Standing instructions- Copying functions- Abbreviations- Fast entry

- Collective/fast processing

Field selection control

Market dataPartner

Business partner Business partner managementmanagement

Standing instructions

Transaction authorizations Payment details Correspondence Derived flows

Automatic checks- Working day check- Trader and partner authorization

Valuation tools

- NPV calculator - Option price calculator etc. Dealing slip Change document

optional: Offer optional: Offer ContractContract

MarketMarketdatabasedatabase

Within transaction management, there are various support tools available.

Using the Field selection control , you can control many of the visible fields. You can adapt the

"look" of TR Transaction Management to suit your business.

You group the visible fields into field groups according to different business criteria. Each of the

field groups available can be assigned an attribute. This then determines how the screen appears forthe user. This means that you can specify whether you want field groups to be suppressed, displayed,

or to be defined as required entries.


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Accounting Example

FTD Curr. acct - IDES

IDES

Interest paid

FTD Curr. acct - Bank

Interest earned Bank clearing account

5 10m 10m 1

3 1m

0

1m

1 10m 10m

1m 3

10m 5

11m

1 10m 10m 5 10m 2

4 1m

10m

6 10m

1m 3

011m

1m

2 10m 10m 1

3 1m 1m 4

5 10m 10m 6

0

Bank

Initial assets - 10m

Fixed-term deposit 10m

Interest earned 1m

1. Fixed-term deposit

2. Bank statement for fixed term deposit amount / flow - clearing bank clearing account

3. Interest Payment

4. Bank statement for interest payment amount - clearing bank clearing account

5. Repayment

6. Bank statement for repayment - clearing bank clearing account


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Creating a Financial Transaction: Initial Screen

Company code 1000 IDES AG

Product type

Trans. type

Partner

51A Fixed-term deposit EXTERNAL

100 Investment

Deuba Deutsche Bank

Specifications

Currency

External number assignment

Transaction

Portfolio

instead of currency of company code

Mast. agreement

To get to the Money Market start menu, choose Accounting -- Treasury -- Treasury Management --

Money Market .

When you create a Money Market transaction, you represent a contract for the investment/borrowing

of short term funds. You enter which trading object (product type) should be invested or borrowed

with which partner in which currency.


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Trader Authorization in the Company

As with trader authorizations for business partners

(external), you must assign trader authorizations

(internal) at the following levels: Contract type

Product category

Product type

Transaction type

By assigning transaction authorizations to traders, you can restrict trading authority to certain

financial instruments (e.g. Money Market), product categories, product types or transaction types.

Authorization for a higher level implies that a trader is authorized to create all transactions below

this level. A trader with authorization for the Money Market area, for example, is automatically

authorized to conclude a fixed-term deposit or deposit at notice. The assignment of an authorization

at the product category level, for example, thus includes the lower levels, product type andtransaction type.

To allocate trader authorizations, you must have created the trader in Customizing.

In order to perform evaluations on the transactions or positions of a specific trader, you can either

enter the trader's name manually on conclusion of a transaction or you can have it proposed

automatically depending on the user name. You can assign specific user data to the traders so as to

speed up the creation of transactions. This allows easier data entry and automatic checking of

transaction days and exchange rate entries.

Authorizations are assigned using the same logic as applied with business partner authorizations.


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Creating a Fixed-Term Deposit Structure

Company code IDES AG


Transaction type Investment

Business partner ...

Investment Term

Flow type Principal increase Start

Amount End

Interest structure

Percentage rate

Int. calc. method

...

...

Structure Status Admin. Other flows Payment details Cash f low Memos

1000

51A

100

1100

1M UNI -

08/10/YY

++2

2,6

act/360

Tabs for

navigation

Flows are automatically generated when a financial transaction is created. For example, principal

increase, nominal interest, and final repayment are generated following the creation of a fixed-term

deposit.

The structure contains only product type-specific information such as the amount, term and interest

structure. You can use abbreviations for the amount and date entries (for example, m =million, t =

thousand, 0 = today, and ++2 = 2 months)

From here you can branch to the entry screens of general transaction management. Tab pages help

you navigate between the screens.

Administration:

Information on the portfolio assignment, on the account assignment reference for posting to the

asset balance sheet account.

Other flows:

The flows generated automatically can be added to by other flows (charges, commissions, etc.).

Status:

Information on correspondence, activity, and release status

...

Under payment details, you enter the relevant details for this transaction. If the payment methods are

maintained as standing instructions for a specific business partner, they appear as default values and

can be modified manually.


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Fast Entry: Money Market

Fast entry

Initial screen

Basic data

Financial transaction

Financial transaction

Using fast entry, you can create a financial transaction directly without having to access the initial

screen.

You can still branch to the the details screen as with normal entry.


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Interest Structure

Interest structureAt end of term

On last day of month

Monthly

Daily

360E / 360

act / 360

:

360 / 360

Percentage levelInt. calc. method

Frequency

WrkgDaysDueDate

Calculat. period

For rollover

Shift due date back to end of term

Every

WorkingDaysCalc

Round

Capitalize interest

act/360

At end of term Days/months

Customizing

2,6000

The SAP R/3 System contains the most frequently used international interest rate calculation

methods for the trading area.

When defining the product type, you can make a corresponding Customizing entry for the interest

rate calculation method.

The Frequency specifies the time of the interest payment.

When you enter "Daily" or "Monthly ", the frequency in days or months must also be stated (for

example, monthly frequency = every three months).

In the transactions for (fast) entry and processing of fixed-term deposits and deposits at notice, you

can trigger the capitalization of interest using a checkbox. However, this checkbox is only displayed

if a condition of the type "interest capitalization" has been assigned to the relevant transaction type.

Optional suppression and displaying of detailed information as necessary.

(Suppression or display of the interest structure)

You can also calculate interest amounts exponentially. You can use exponential interest calculation

for the following product types:

* Money Market (fixed-term deposits, deposits at notice, cash flow transactions)

* Derivatives (Cap/Floor, Swap)


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Interest Calculation Methods (1)

03/31 incl. to 04/02 incl. = 2 days.

The 31st is not included.

12/01 incl. to 12/31 excl. = 30 days.

The 31st is normally not included so the addition of excl.’has no effect.

ExampleExample: ‘360’

03/31 incl. to 04/02 incl. = 3 days.

03/31 is treated as the 30th and included because of the addition ‘incl.’

12/01 incl. to 12/31 excl. = 29 days.

12/31 is treated as the 30th but is not included because of the addition‘excl.’

ExampleExample: ‘360E’

The interest calculation method is defined by the ratio DAYS/DAY BASIS and, as a factor of the

percentage calculation, results in the percentage calculation for the specific period.

The methods for calculating DAYS (number of days of each calculation period) are:

1. 'act'

The actual number of days (calendar days) between the two dates are calculated.2. 'actW'

The number of working days in an interest calendar between the two dates is calculated.

3. ‘360‘

The number of days between the days M1/D1/Y1 und M2/D2/Y2 is provided by (Y2 - Y1) * 360

+ (M2 - M1) * 30 + (D2 - D1).

The month is calculated using 30 days and the 31st of each month is ignored for the purposes of

interest calculation.

4. ‘360E ‘

The number of days between the dates M1/D1/Y1 and M2/D2/Y2 is provided by (Y2 - Y1) * 360

+ (M2 - M1) * 30 + (D2 - D1).

The month is calculated using 30 days, and the 31st of each month is seen as the 30th, that is, the

31st in D1 and D2 is reset to the 30th. This method is used on the Euromarkets.


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Interest Calculation Methods (2)

Method

Characteristics

360E/360 actual/actualP actual/actualY actualW/252

Counter (Tage)

30 daysper month31. - > 30.

actualcalendar days

actualcalendar days

working daysof interestcalendar

Denominator (day basis)

360 daysper year

actualcalendar days

of a period

actualcalendar days of a calendar year

252 workingdays per year

Example06/16 -

12/31/ 99194 days 198 days 198 days 141 days(*)

(*) eg..: Factory calendar Germany

Method

Characteristics

360/360 actual/360 actual/365 actual/366

Counter (Tage)

30 days/month360 days/year

actualcalendar days

actualcalendar days

actualcalendar days

Denominator (day basis)

360 daysper year

360 daysper year

365 daysper year

366 daysper year

Example06/16 -

12/31/99195 days 198 days 198 days 198 days

The following are defined as DAY BASIS:

1. "360"

Based on a year with 360 days.

2. "365"

Based on a year with 365 days.3. "366"

Based on a year with 366 days.

4. "252"

Based on a year with 252 days (working days).

5. "actP"

"P" stands for "period" and means that the actual number of days in a period is used to calculate

the interest. The number of days in the period are multiplied by the number of periods in the year

to arrive at the rate for one year.

6. "actY"

"Y" stands for "year" and means that the actual number of days in a calendar year (365 days in a

normal year and 366 in a leap year) is used. If a calculation period comprises two calendar years,and one of them is a leap year, the calculation is done in two parts.


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Payment Details

Currency Payment

details - ID

Settler Partner-

bank-ID

Pmnt

mthd

Payment

trans.

House

bank

Account

ID

UNI 01 DB GIRUN

USD 01 DB GIRUS

......

......

......

Company code

Product type

Transaction type

D Curr. Effective FType HBank Account ID Payment Payment reqt

+ UNI DB GIRUN

- UNI DB GIRUN

Fixed-term deposits: Payment details

Business Partner - Standing Instructions: Payment Details

The bank and the bank clearing account to be posted to is determined using the house bank and the

account ID stored in the business partner's payment details.

The system supports multiple level payment methods. By entering a bank chain, you can process

payments via several banks. Up to three intermediate banks are supported.


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Conditions of a Financial Transaction

Nominal interest 4% Interest / Frequency: 6 months

Final repayment

Example: Fixed-term deposit:

Payment date Int. Amount

Nominal interest 10/31/YY 4% 3,333.33

Nominal interest 04/30/YY+1 5% 4,166.67

Changes in conditions:

The representation of financial transactions in SAP Treasury is carried out on the basis of the flow

and condition concept. Conditions are contractually agreed components of a financial transaction.

Condition types include different interest, dividend or repayment terms and these ensure that each

product type is allocated its appropriate structure characteristics. Condition types thus control which

structure characteristics are displayed when you create transactions of a specific product type.

Depending on its type, a condition position is characterized by amounts or percentages andcalculation bases as well as calendar data and date recording.

The principal task of conditions is the automated generation of flows. Therefore, the flow types that

you assign to condition types should show changes in the payment flows and should be elements of

the cash flow.


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Cash Flow for a Fixed-Term Deposit

Payment Payment Curr. Flow type

date amount

10/01/YY 1,000,000.00 - UNI 1100 Principal increase

12/31/YY 225.00 - UNI 1801 Reunification tax

12/31/YY 3,000.00 - UNI 1800 Interest income tax

12/31/YY 10,000.00 + UNI 1200 Nominal interest

12/31/YY 1,000,000.00 + UNI 1120 Final repayment

ExampleExample: Fixed-term deposit 1m

4% interest

Direc-

tion

Select layout

Variant Description

1SAP01 Basic view

1SAP02 Due date view

1SAP03 Calculation view

1SAP04 Local currency view

1SAP05 Payment view1SAP06 Accounting view

The cash flow provides the basis for

Postings

Effective interest rate calculation

Accrual/deferral of expenses and revenues.

Display of the cash flow:

Direction of the flow

Sorting the flows according to different criteria

Search and selection functions

Display of sums

Export functions

Direct selection of the desired view

(basic view, due date view, calculation view, local currency view, payment view, posting view)

Facility to store layouts

Direct editing of flows in the cash flow


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Financial Transactions: Cash FlowFinancial Transactions: Cash Flow

ActualActual

Basis for

Updating cash management

Updating financial accounting by

flexible account determination

Triggering payments

Updating positions

Deferred interest

Foreign currency valuation

Yield calculation

Investmt 4/1/YY 1m UNI occurred

Interest 7/1/YY 10 t UNI expected

Return 7/1/YY 1 m UNI expected

Cash flow (Example)

TransactionTransactionInvestment/

borrowing amt

Investment/

borrowing amt

ConditionCondition

PlanPlan

The cash flow of financial transactions forms the starting point for all trading, transaction and

position management processes as well as evaluation activities within Treasury.

Financial mathematics is used to determine cash flows in Treasury.

The system provides a range of formulas and you can use these as "building blocks" to organize the

Treasury application flexibly. In Treasury Management, application-specific control programs call up centrally-stored financial

mathematics function modules to calculate interest and repayment schedules etc.

On the basis of the conditions applying to a financial transaction, and also for a specified calculation

period, these financial mathematical function modules generate and (if appropriate) calculate a

sequence of flows called a cash flow (payment flow) for a financial transaction in the application (for

example, a stock purchase or SWAP).


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Other flows

Flow type

Description

Direction

Payment amount

Currency

Payment date

Posting status and description

1901 Charges

1902 Commission

...

The concept of flow types allows you to define additional flows - such as charges and commissions

(absolute or percentage) - for the individual product types. These are then recorded with the

individual transactions.


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Derived Flows (Interest Income Tax)

From some original flows, you can generate new flows by

defining derivation rules.

Flow 1200 Interest UNI 1,000.00

Int. 1800 Int.IncomeTax UNI 300.00

Int. 1801 Soli UNI 16.50

Derivation rule

Int. Income Tax

On the basis of the flow types, further derived flows can be generated. In the case of nominal

interest, for example, tax flows can be generated automatically. These can then be shown in the cash

flow. In Cash Management, they lead to the display of the net cash flow.

You define the above derivation process 'IIT' (Interest income tax) in Customizing.

Example: Interest income tax of 30% (tax 1) is deducted from the nominal interest (flow type 1200),and a local tax of 5.5% (tax 2) is deducted from tax 1 (that is, 1.65% of the nominal interest amount).

The interest condition in the transaction generates an interest flow of type 1200. At the same time,

the system adds other derived flows to the cash flow:

Interest income tax (flow type 1800)

Interest income tax (flow type 1801)

The derived flows are created separately for each business partner.


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Collective Processing: Money Market

Overview of money market transactions that correspond to

the selection criteria entered

Processing the relevant transactions

Create

Change

Display

Roll over

Give notice

Settle

Reverse

History

Branch directly to the individual transaction

Link to the SAP List Viewer

Collective processing facilitates the systematic management of transactions. All business activities

that you select according to common criteria are displayed with a list of short descriptions of each

transaction, and the necessary processing functions are available.

From the processing list, you can branch directly to an individual transaction at any time.

The connection to the SAP List Viewer provides you with a range of display options. You candetermine the columns or rows to be displayed, sort and sum as you wish.You can save these layouts

to use them again.

When you have finished processing a transaction, a Processing indicator is set.


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Transaction Management:Worklist and Collective Processing

Processing financial transactions for all product

categories

User-specific managing of financial transactions

Selecting and displaying Treasury financial transactions

Branching to individual transaction processing

Representing transactions using the SAP List Viewer

You can process financial transactions across all of the following product categories:

Fixed-term deposits and deposits at notice

Commercial Paper

Cash flow transactions

Forex spot transactions and forward exchange transactions

Interest derivatives

OTC options

Futures

Securities

You can store any number of selections as variants and manage these in a tree structure either user-

specifically or for all users.

The layout controls the structure of the list. You can store various information in a layout including

the following:

Column structure

Sorting criteria

Filter conditions


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Utilities: Date Check

Calendar Standard factory calendar GermanyCalendar

Date to be checked Previous working day Next working dayStart of term 04/05/YYYY Sa. 04/04/YYYY Fr. 04/07/YYYY Mo.

End of term 10/05/YYYY Fr.

You can use the date check to establish whether a particular due date falls on a working day or not.


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Financial Transactions in Cash Management

Assign planning levels

IDES AG

10/02 10/03 10/03 later 10/05

Cash Management: Display Levels

Lev

BanksBanks

Description 10/02 10/03 10/04 later 10/05

TB Time deposits 132,323 Xxx,xxx Xxx,xxx Xxx,xxxXxx,xxx

. . .. . . . . .. . .. . . . . . . . . . . .. . .

OBOB Currency optionsCurrency options Xxx,xxx

. . .. . . . . .. . .

DBDB ForexForex

Balance

. . . . . . . . . . . .. . .

1000

Fixed-term deposits51A

Time deposits - banksTB

Contract10

Xxx,xxx Xxx,xxx Xxx,xxx Xxx,xxx

Xxx,xxx Xxx,xxx Xxx,xxx Xxx,xxx Xxx,xxx

xxx.xxx xxx.xxx xxx.xxx xxx.xxx xxx.xxx

Each activity (status) within a transaction (order, contract, settlement, etc.) is displayed automatically

in Cash Management. You can then view and analyze each activity using a separate level.

This way, the cash flows from Treasury transactions that have not yet been posted but whose values

are

AC825_46C_Money Market -Foreign Exchage and Derivatives

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