Exposure management 2 0 in SAP rudolf brysa

Rudolf Bryša, Thomas Fritzsche, Markus H, Sưnke Jarré, Reinhold Lövenich, Andreas Martin, Klaus G Müller Exposure Management 2.0 in SAP® Treasury and Risk Management This E-Bite is protected by copyright Full Legal Notes and Notes on Usage can be found at the end of this publication SAP PRESS E-Bites SAP PRESS E-Bites provide you with a high-quality response to your specific project need If you’re looking for detailed instructions on a specific task; or if you need to become familiar with a small, but crucial sub-component of an SAP product; or if you want to understand all the hype around product xyz: SAP PRESS E-Bites have you covered Authored by the top professionals in the SAP universe, E-Bites provide the excellence you know from SAP PRESS, in a digestible electronic format, delivered (and consumed) in a fraction of the time! Eric Du SAP HANA Smart Data Streaming and the Internet of Things ISBN 978-1-4932-1303-0 | $9.99 | 86 pages Mirosalv Antolovic JavaScript for ABAP Developers ISBN 978-1-4932-1282-8 | $9.99 | 55 pages Janet Salmon SAP Simple Finance: How Do I Get Started without Migrating? ISBN 978-1-4932-1284-2 | $12.99 | 40 pages The Authors of this E-Bite Rudolf Bryša, Thomas Fritzsche, Markus H, Sưnke Jarré, Reinhold Lưvenich, Andreas Martin, and Klaus G Müller work at SAP They have many years’ experience of working with SAP Treasury and Risk Management in various capacities Learn more about the authors at https://www.sap-press.com/sap-treasury-and-risk-management_3166/authors/ What You’ll Learn Learn the basics of exposure management, before diving in to raw exposures, customization, and exposure positions Discover how data from SAP ERP MM and SD can be integrated into SAP Treasury Exposure Management 2.0 Basic Principles Raw Exposures 2.1 Raw Exposure Maintenance (FTREX1) 2.2 Overview of Raw Exposures (FTREX2) 2.3 Maintain a Commodity Split (FTREX7) Raw Exposure Customizing 3.1 Global Settings 3.2 Exposure Activity Type 3.3 Free Attributes Releasing Raw Exposures 4.1 Manual Release and Automatic Release 4.2 Connection to SAP Business Workflow 4.3 Derivation Strategy for Exposure Fields 4.4 Product Type 4.5 Exposure Position Type Exposure Position 5.1 Position Values for Exposure Positions 5.2 Exposure Position Flows 5.3 Commodity Exposure Report Integration of Logistics into Treasury 6.1 Logistics Outbound Processing 6.2 Treasury Inbound Processing This E-Bite is an excerpt from SAP Treasury and Risk Management by Klaus G Müller, Andreas Martin, Reinhold Lövenich, Sönke Jarré, Rudolf Bryša, Thomas Fritzsche and Markus Heß Basic Principles In order to hedge risks from your operative transaction, you often close derivative financial transactions Usually, however, the data that describes this operative underlying transaction is not stored in SAP Treasury and Risk Management, but in Sales and Distribution (SD) or Materials Management (MM) in SAP ERP, or possibly in other SAP or third-party systems Recently forecasted revenue figures are frequently stored in a spreadsheet All the data associated with the operative underlying transaction becomes the basis for your hedging In SAP Treasury and Risk Management, this data is mapped and managed using exposure management In other words, exposure management links your operative transaction to your treasury activities and is therefore a feeder channel into SAP Treasury and Risk Management Version of Exposure Management This E-Bite refers to Exposure Management 2.0, which is the new and recommended version of exposure management For this reason, the sections below not make any reference to Exposure Management 1.0 Notes Regarding Path Details For the sake of simplicity, many of the paths specified in this E-Bite have been shortened: To access the starting point for the Customizing paths listed below, call T REASURY AND RISK MANAGEMENT • T RANSACTION MANAGER • G ENERAL SETTINGS • EXPOSURE MANAGEMENT 2.0 To access Customizing for the commodity solution, choose T REASURY AND RISK MANAGEMENT • FINANCIAL RISK MANAGEMENT FOR COMMODITIES • EXPOSURE MANAGEMENT All the Customizing paths mentioned in the following sections relate back to these root nodes In the case of transactions, we will use shortened path details and the following root node: T REASURY AND RISK MANAGEMENT • T RANSACTION MANAGER • EXPOSURE MANAGEMENT 2.0 and T REASURY AND RISK MANAGEMENT • FINANCIAL RISK MANAGEMENT FOR COMMODITIES • EXPOSURE MANAGEMENT Exposure management supports two different types of risks, namely foreign currency risks and commodity price risks Of course, other types of risks exist (for example, interest rate risk and liquidity risk), but these risks are often managed by other SAP modules, such as SAP Liquidity Planner or the money market function in transaction management That is why these risks are currently not supported by exposure management When you analyze the underlying transactions in your business, you must first decide which ones concern risks that you need to hedge When doing so, check whether an operative business transaction represents a foreign currency risk or a commodity price risk, then use exposure management to map this process in your system The next question you need to answer is in relation to hedging If you not hedge each risk separately (micro hedge), you will most likely want to determine your total risk position and then hedge this total risk (macro hedge) instead Depending on the risk strategy deployed by your company, you can configure the system in different ways and create different risk positions The key terms defined below are used throughout this E-Bite Exposure In SAP Treasury and Risk Management, you generally use hedging activities to hedge many different financial risks associated with your operative transaction The more individual your operative underlying transaction is, the more individual the financial risks and your risk hedge strategy will be In an effort to use one standardized term for all these risks, we use the term exposure to describe such a financial risk Raw exposure In exposure management, only the basic data relating to your operative business transactions is stored in a raw format known in the system as a raw exposure A raw exposure is a simple mapping of an operative business transaction Sub raw exposure All information relating to financial risks is stored in sub raw exposures Here, a distinction is made between foreign currency risks and commodity price risks Sub raw exposures form part of a raw exposure A raw exposure can contain several sub raw exposures Exposure position Raw exposures, as a total, represent the financial risk associated with your operative transaction The total risk position is known as an exposure position, which comprises several sub raw exposures Differentiation and exposure transactions Differentiation enables you to define how risks are divided Here, the sub raw exposures are initially converted into a temporary intermediate format They then become exposure transactions and are used to create exposure positions Exposure position flow Exposure transactions are used to create exposure position flows, which, in turn, create the exposure position An exposure position generally contains several exposure position flows Exposure position value The exposure position value is the total value of the exposure position flows for one exposure position on a particular key date Figure shows an example of how the most important entities in exposure management are used This is a schematic representation of how a raw exposure that contains the sub raw exposures of the commodity price exposure and foreign currency exposure is mapped in the system and how the system releases it to generate exposure positions Figure Overview of Exposure Management Raw Exposures In exposure management, the data is initially stored in the form of raw exposures All transactions for raw exposures are available under RAW EXPOSURES 2.1 Raw Exposure Maintenance (FTREX1) Call the Raw Exposure Maintenance transaction (FTREX1) and specify that you are dealing with a collective transaction that can be used to create, display, change, and release raw exposures Then, create a raw exposure To this, choose CREATE The system asks you to specify an exposure activity type This defines what type of exposure you are creating Further information on possible settings here is available in Section 3.2 Once you select a suitable exposure activity type, you see the view shown in Figure However, this view may differ depending on which exposure management business function is used and the Customizing settings for the field selection and free attributes Figure Raw Exposure Maintenance (Transaction FTREX1) In general, however, this view always contains a header and three tab pages: HEADER DATA, LINE ITEM DATA, and USER DATA 2.1.1 Header The header contains the RAW EXPOSURE ID Since the system does not assign the raw exposure ID until you save the raw exposure, the system initially displays the text \INTERN\ in this field when you call the transaction for the first time You also see the EXPOSURE ACTIVITY T YPE you selected, as well as the VERSION of the raw exposure Exposure Versions Note that Version is always the current version The system does not generate a new version until you release the raw exposure This new version is then assigned the number 0, while the released version is assigned a sequential number 2.1.2 Header Data Tab Page The first thing you on the HEADER DATA tab page is specify the origin of the raw exposure You use the EXT DOC NO., LOGICAL SYSTEM, and EXPOSURE ORIGIN fields for this purpose You can enter any text of your choice in these fields You maintain the values for the EXPOSURE ORIGIN in the Customizing activity DEFINE EXPOSURE ORIGINS If you have integrated Logistics into Treasury, these fields are already pre-assigned by the system A button is then available to enable you to navigate back to the document that created the raw exposure In the GENERAL ATTRIBUTES screen area, you can specify a company code and country The entry in the COMPANY CODE field is used for further processing (for example, in hedge management), while the COUNTRY field is a characteristic you can use afterward for reporting and grouping purposes The FREE ATTRIBUTES screen area is filled with characteristics relating to a raw exposure Once again, you can enter any text here Your Customizing settings determine which fields are shown here Therefore, use these fields to store predominant attributes that are not provided in the standard SAP system We show you the Customizing for these free attributes in Section 3.3 In the CONTROL ATTRIBUTES screen area, specify the valid-from date for the raw exposure The RELEASE STATUS of the raw exposure is also shown here provides further detailed information on how to release a raw exposure, as well as information on the various release steps supported by the system 2.1.3 Line Item Data Tab Page The LINE ITEM DATA tab page is divided into two areas (see Figure 3) In the upper area, enter the actual raw exposure information for each line item in tabular form, and in the lower area, enter the sub raw exposures These line items are called RAW EXPOSURE POSITIONS If you choose CREATE NEW LINE ITEM to create a new line item, the system displays a new row with the following RAW EXPOSURE POSITION ID: In the Customizing settings, define which fields can be displayed and edited for each line item The use of free attributes enables you to save individual values for each line item For more information, see Section 3.3 Figure 11 Settings for Free Attributes Figure 12 Settings for Exposure Position Types Figure 13 Additional Differentiation Criteria for an Exposure Position Figure 14 Manual Matching of Exposure Transactions Figure 15 Selection Screen for Exposure Positions Figure 16 Navigation Screen for Exposure Positions Figure 17 Selection Screen for Exposure Position Flows Figure 18 Display Exposure Position Flows Figure 19 Commodity Exposure Report Figure 20 Output Screen for the Commodity Exposure Report Footnotes ... from SAP ERP MM and SD can be integrated into SAP Treasury Exposure Management 2. 0 Basic Principles Raw Exposures 2. 1 Raw Exposure Maintenance (FTREX1) 2. 2 Overview of Raw Exposures (FTREX2) 2. 3... Business Explorer (SAP BEx), SAP BusinessObjects, SAP BusinessObjects Web Intelligence, SAP Business One, SAP BusinessObjects Explorer, SAP Business Workflow, SAP Crystal Reports, SAP d-code, SAP. .. EarlyWatch, SAP Fiori, SAP Ganges, SAP Global Trade Services (SAP GTS), SAP GoingLive, SAP HANA, SAP Jam, SAP Lumira, SAP MaxAttention, SAP MaxDB, SAP NetWeaver, SAP PartnerEdge, SAPPHIRE NOW, SAP PowerBuilder,