TR - CM - Configuration Document Template

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Treasury Management and Cash Management

Baseline Configuration Design Document

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Table Contents

1 Purpose of the document ... 5

2 Key data Structures ... 6

2.1 General Settings: ... 6

2.2 Define Calculation Indicator ... 6

2.3 Define Company Code Additional Data ... 6

2.4 Define Portfolio ... 6

2.5 Assign Calendar ... 7

2.6 Define Leading Currency ... 8

2.7 Define Valuation Areas ... 8

2.8 Define Accounting Codes ... 9

2.9 Assign Accounting Codes and Valuation Areas ... 9

2.10 Initialization of Parallel Valuation Area ... 9

2.11 Define and Assign Valuation Classes (General Valuation Class) ... 10

2.12 Define and Assign Valuation Classes ... 10

2.13 Assignment of General Valuation Class to Specific Valuation Class ... 10

2.14 Assign General Valuation Classes to Groups: ... 12

2.15 Define Position Management Procedure ... 12

2.16 Assign Position Management Procedure ... 12

2.17 Define Update Types and Assign Usages ... 13

2.18 Define Accrual / Deferral ... 14

2.19 Link to Other Accounting Components ... 14

2.20 Define Account Assignment Reference Determination (OTC Transactions) ... 15

2.21 Indicate Update Types as Relevant to Posting: ... 15

2.22 Define Account Determination ... 15

2.23 Define Account Determination ... 16

Money Market ... 18

2.24 Product Types ... 18

2.24.1 Define Product Types ... 18

2.25 Transaction Types ... 19

2.25.1 Define Number Ranges ... 19

2.25.2 Define Transaction Types ... 19

2.26 Flow Types ... 19

2.26.1 Define Flow Types ... 19

2.26.2 Assign Flow Types to Transaction Type ... 20

2.27 Derived Flows ... 21

2.27.1 Define Calculation Procedure for Derived Flows ... 21

2.27.2 Define Derivation Procedures and Rules ... 21

2.28 Update Types ... 22

2.29.1 Assign Flow Types to Update Types ... 23

2.30 Condition Types ... 23

2.30.1 Define Condition Types ... 23

2.30.2 Assign Condition Types to Transaction Type ... 23

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2.31.1 Define Product Types ... 25

2.32 Number Ranges ... 25

2.32.1 Define Number Ranges for Transaction ... 25

2.32.2 Define Number Ranges for Underlying Transaction ... 25

2.32.3 Define Transaction Types ... 25

2.32.4 Assign Forex Attributes... 26

2.32.5 Assign Fixing Spreads ... 26

Securities ... 29

2.37 Basic Settings ... 29

2.37.1 Define Currency Units ... 29

2.37.2 Define Exchange ... 29

2.37.3 Define Security Price Types ... 29

2.38.1 Define Number Ranges for Security Classes ... 29

2.39 Condition Types ... 29

2.39.1 Define Condition Types ... 29

2.39.2 Define Condition Groups ... 30

2.39.3 Assign Condition Types to Condition Groups ... 30

2.40 Define Product Types ... 31

2.41 Assign Repayment Types to Product Types ... 31

2.42 Define Company Code-Dependent Settings for the Product Type ... 31

2.43 Securities Account Management ... 32

2.43.1 Define Securities Account Categories ... 32

2.43.2 Maintain Field Selection for Security Account Master Data ... 33

2.43.3 Define Blocking Flags ... 33

2.44.1 Define Number Ranges for Transaction ... 33

2.44.2 Define Number Ranges for Underlying Transaction ... 33

2.45 Transaction types: ... 34

Hedge Management ... 37

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2.50.2 Assign Hedge Number Ranges to a Company Code ... 37

2.50.3 Define Number Ranges for Hedging Relationships ... 37

2.50.4 Assign Hedging Relationship Number Ranges to a Company Code ... 37

2.50.5 Define Number Ranges for Hedge Plans ... 37

2.50.6 Assign Hedge Plan Number Ranges to a Company Code ... 38

2.50.7 Define Number Ranges for Transactions ... 38

2.50.8 Assign Transaction Number Ranges to a Company code ... 38

2.51 Valuation Area-Dependent Settings for Hedge Management ... 38

2.52 Settings for Automatic Creation of Hedge Management Data ... 38

Cash Management ... 39

2.53 Currencies ... 39

2.54 Check rate Type ... 39

2.55 Define Source Symbol ... 39

2.56 Define Planning Level ... 40

2.57 Define Planning Groups ... 41

2.59 Maintain Structure ... 42

2.60 Prepare production startup for Cash Management ... 43

2.61 Activate company code ... 43

2.62 Define Value Date Default ... 43

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1 Purpose of the document

This deliverable documents the guidelines and rationales for a packaged software configuration in order for it to meet the specific business and IT requirements defining the framework for the configuration activities of the application software into Project SAP. The focus of this document is on the SAP configuration (SAP parameters) and specifically on the key parameters. The software development of SAP will be addressed in the Application development standards during the design phase. These specifications represent the key component of the design of the standard software and must be followed by the release implementation teams.

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2 Key data Structures

In the Key data structure determines the master data of the Organisation for implementing the SAP R/3 which has mentioned in the functional design document and the same would be incorporated in the detailed explanation, coding logic and naming conventions etc.

2.1 General Settings:

2.2 Define Calculation Indicator

In this IMG activity we have to define the calculation indicator for calculating the exchange rates. In the standard SAP we have to define indicator M for standard translation at average rate.

The Rates mentioned standard in SAP are:

2.3 Define Company Code Additional Data

In this IMG activity you have to define additional data for the company codes you use. General Settings

Enter the SWIFT code for the company code here Settings for exchange rates:

Enter the rate calculation indicator for your exchange rate translations in the current company code. The rate calculation indicator specifies the debit and credit rate categories and is only used in the securities and loans areas.

Settings for the securities area:

 Specify whether or not short sales are permitted.

 Define a price type for security prices that you will use for evaluations. Settings for loans

Enter the factory calendar that the system should use for this company code in loans management.You can specify the factory calendar that the system should use per default for each condition type and group when you enter a condition item. If you have not specified a factory calendar here per condition group for a condition type, the system uses the factory calendar that you have defined in this IMG activity for the company code.

Company Code

Rate

calculation Company Name City Chart of

Accounts Currency

1000 M Organization Ltd Mumbai 1000 INR

2.4 Define Portfolio

IMG Path FSCMTRM Transaction ManagerGeneral SettingOrganization Define Calculation Indicator

Transaction SPRO

IMG Path FSCMTRM Transaction ManagerGeneral SettingOrganization Define Company Code Additional Data.

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The portfolio is usually a concept used to group and to structure positions of financial instruments. In Treasury and Risk Management, the portfolio is also used for this purpose, although in two very different ways.

One use of a portfolio is as a grouping concept for reporting transactions. You can create a portfolio for any transaction, activate it in most reports, and use it for your own reporting purposes. However, in this role it initially classifies transactions and not positions.

In the securities area, the portfolio can have another role for securities positions. The position management function of the transaction Manager allows your accounting positions to be divided up in a flexible manner. You can specify that you want to distinguish between securities positions by portfolio.

In this case, two purchases of the same security with different portfolios, for example, would give rise to different accounting positions, even if the purchases were made in the same securities account. The portfolio is therefore a differentiating characteristic of securities position.

Company Code

Portfolio Portfolio

1000

BONDS

Fixed Interest Bonds

1000

PCKCR

Packing Credit Loans

1000

DEBEN

Non Convertible Debenture

1000

FOREX

Foreign Exchange Instrument

1000

HEDGE

Hedge Instrument

1000

LOANS

Gen. Loans

1000

MUFUN

Mutual Funds Instruments

1000

VRINT

Variable Interest Instruments

1000

FXDEP

Fixed Deposits

1000

SUBLN

Loans to Subsidiaries

1000

BUYCR

Buyers / Suppliers Credit

2.5 Assign Calendar

In this step, you assign a calendar to the various currencies. When you enter the transaction, the system performs a working day check to check all the flows that result from the transaction against the calendar defined here.

Currency Factory Calendar

INR OG

The Configuration for the Calendar Currency Code is as below:

IMG Path FSCM TRM  Transaction Manager General Setting  Organization  Define Portfolio

IMG Path FSCMTRM Transaction ManagerGeneral Setting Transaction ManagementCurrencies->Assign Calendar

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2.6 Define Leading Currency

In this step you define the leading currencies for the various currency pairs. The system uses these settings to determine the rate notation when you enter foreign exchange transactions and foreign exchange options.

In addition, you can enter the number of days between conclusion of the Forex transaction and the value date in the Spot day’s field. Usually this is two working days. Depending on the currency, there may be deviations from this rule. You should only make an entry in this field if practices on the international Forex market follow a different rule to the usual two day rule. Example

If you enter a Forex transaction amounting to 40,000 USD and enter 1.10 in the exchange rate field, the system can use the leading currency to calculate the amount in Euros.

Leading currency EUR -> 40,000 USD / 1.10 EUR/USD = 36,363.64 EUR Leading currency USD -> 40,000 USD * 1.10 USD/EUR = 44,000.00 EUR Rate notation in Treasury:

Notation: Leading currency/Following currency

Interpretation: The rate expresses the amount in the following currency for one unit of the leading currency.

The leading currency will be defined as per ORGN requirement is maintained as USD>INR.

2.7 Define Valuation Areas

In this IMG activity you define all valuation areas that you require. You define valuation area 001 that corresponds to the 'operative valuation area', and all other parallel valuation areas.

The valuation area refers to an accounting principle within internal position management. Typical examples for an accounting principle are the German Commercial Code, the US GAAP and IFRS.

The Operative Valuation Area is 001. The Operative and IFRS Valuation area will be configured form ORGN perspective. The positions in the operative valuation area (with exceptions) are managed and are valued using the operative valuation area functions.

Valuation Area Name of valuation area

001 Operative Valuation Area - ORGN

002 Parallel Valuation Area - IFRS

003 Parallel Valuation Area – Local GAAP

IMG Path FSCMTRM Transaction ManagerGeneral Setting Transaction ManagementCurrencies->Define Leading Currency

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Organization->Define Valuation Area

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2.8 Define Accounting Codes

The accounting code is the central organizational unit in the parallel valuation areas. Each business transaction is assigned to a specific accounting code. The accounting code itself corresponds exactly to a company code (1:1 relationship). The assignment of accounting code to an FI Company Code is done here.

Each business transaction is assigned to a specific accounting code.

A.C A.C Description Co. Co

1000 Organization Ltd - Accounting Code 1000

2.9 Assign Accounting Codes and Valuation Areas

In this IMG activity you assign the valuation areas to accounting codes. You also make settings for the FI update and for valuation.

 The valuation area is has to be assigned to the accounting codes. It is important here to ensure that all valuation areas are assigned to an accounting code.

 This assignment also specifies whether a posting to accounting is generated, or which accounting principle is used. The key assignment to the correct ledger takes place in FI by means of the accounting principle.

 Each accounting code must also be assigned a currency to make it possible to determine whether there is a foreign exchange transaction or not.

The Activity of Assignment of Accounting Code to Valuation Area will be performed here.

The Posting to FI from TR will be enabled for Operative Valuation Area – 001. The Assignment of Accounting Code is done for all Valuation Areas with respect ORGN.

A.C A.C Description Val. Area Name of valuation area 1000 Organization Ltd - Accounting Code 001 Operative Valuation Area 1000 Organization Ltd - Accounting Code 002 Parallel Valuation Area - IFRS

2.10 Initialization of Parallel Valuation Area

In this IMG activity, you must initialize the parallel valuation areas on the basis of the existing transaction data before you can use the corresponding functions. You initialize the data once for a certain key date.

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Organization->Define Accounting Code

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Organization->Assign Accounting Codes and Valuation Areas

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Organization->Initialization of Parallel Valuation Area

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 After all the settings have been made, the valuation areas are initialized. A separate initialization has to be carried out for each financial transaction area (loans, OTC transactions, securities). If changes are carried out at a later time, it is only necessary to carry out a new initialization if the changes were major (such as a new valuation area).  Before initialization can be carried out, you have to specify a key date. This key date

specifies the point from which the parallel valuation or posting functions can be used.

 Each initialization operation consists of a variety of steps, which you have to process from the top down. You have to select a step and start it with the "Execute" button.

 Position management into different valuation areas is only possible after the initialization has been carried out. It is very useful to carry out the initialization before entering any transactions as this avoids position postings.

One must initialize the parallel valuation areas on the basis of the existing transaction data before the corresponding functions can be used. The Data once is initialized for certain key date.

2.11 Define and Assign Valuation Classes (General Valuation Class)

The general valuation class specifies in the transaction which valuation area the specified transaction can be assigned to.

The following asset classes exist:



Long-term Investment



Medium-term Investment



Short-term Investment



Liabilities

2.12 Define and Assign Valuation Classes



 Each valuation area is subdivided into various valuation classes by means of the international (IFRS) or local accounting principles.

 In this step, the valuation areas are linked to the corresponding valuation classes.

2.13 Assignment of General Valuation Class to Specific Valuation Class

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Settings for Position Management->Define and Assign Valuation Classes

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 In the transaction, only the general valuation classes are entered, or they are retrieved automatically. For the position to be transferred to the valuation classes there is now an assignment step.

 In the "Assign General Valuation Class" menu item, the three functional areas Valuation area, Valuation class and General valuation class are linked.

 In this menu option you define general valuation classes (GVCs) and special valuation classes for each valuation area and assign these classes to each other.

ORGN following General Valuation Class and Valuation Area will be configured and assigned.

VA ValCl

Name of the general valuation class

Name of the valuation

class Name of valuation area

1 001 Short-term investments At Fair Value Through Profit or Loss Operative Valuation Area 2 001 Short-term investments Trading Parallel Valuation Area – IFRS 3 001 Short-term investments Current Assets

Parallel Valuation Area - Local GAAP

1 002 Mid-term investments Available for Sale Operative Valuation Area 2 002 Mid-term investments Available for Sale Parallel Valuation Area – IFRS 3 001 Mid-term investments Current Assets

Parallel Valuation Area - Local GAAP

1 003 Long-term investments Held to Maturity / Loans and Receivables Operative Valuation Area 2 003 Long-term investments Held to Maturity Parallel Valuation Area – IFRS 3 002 Long-term investments Fixed Assets Parallel Valuation Area - Local GAAP

1 004 Liabilities Liabilities Operative Valuation Area

2 004 Liabilities Liabilities Parallel Valuation Area – IFRS 3 004 Liabilities Liabilities Parallel Valuation Area - Local GAAP

1 001

Valuation area 2 : Transfer posting

long-term -> mid-long-term At Fair Value Through Profit or Loss Operative Valuation Area

2 001

long-term -> mid-long-term Trading Parallel Valuation Area – IFRS

3 002

long-term -> mid-long-term Fixed Assets Parallel Valuation Area - Local GAAP

1 002

long-term -> mid-long-term Available for Sale Operative Valuation Area

2 002

long-term -> mid-long-term Available for Sale Parallel Valuation Area – IFRS

3 003

long-term -> mid-long-term Parallel Valuation Area - Local GAAP The above General valuation classes will be used to classify transactions by asset type and apply across all valuation areas. Special valuation classes if required will be defined at valuation area level. The general valuation classes are assigned to the special valuation classes for the valuation areas. For each transaction, the system can therefore determine the special valuation classes for the different valuation areas on the basis of the general valuation class.

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The General valuation class assignment is made to a position when you enter the financial transaction. In activity 'Assign Position Management Procedure', the rules for assigning position management procedures to positions are defined. The valuation class is one of the criteria that you can use to assign the position management procedure.

2.14 Assign General Valuation Classes to Groups:

IMG Path Financial Supply Chain Management > Treasury and Risk Management > General Settings > Accounting > Settings for Position Management > Assign General Valuation Classes to Groups

Transaction _SPRO

One can define here groups and then assign general valuation classes. The groups are assigned per company code, product type and/or transaction type. When one will use the F4 help for assigning general valuation classes, then only general valuation classes for groups belonging to the product/transaction type will be displayed.

2.15 Define Position Management Procedure

In this IMG activity you define the position management procedures you require. In these you establish the rules for maintaining the positions, for example, how the positions are to be valued, and also how the derived business transactions are to be generated in the case of position outflows or balance sheet transfers.

 The position management procedure determines how positions are managed and valued in the parallel valuation areas.

 You first have to define the key date valuation procedures required by the relevant accounting regulations.

 You then set the sequence of the key date valuation procedures within the position management procedures. In this way, you can combine the relevant procedures for amortizations, one-step price valuations, security price valuations and foreign currency valuations according to the respective accounting rules.

 You can assign position management procedures dependent on different factors (for example, valuation area, valuation class, product type).

The Standard SAP Position Management Procedures are adopted.

2.16 Assign Position Management Procedure

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Settings for Position Management-> Define Position Management Procedure

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In this IMG activity you define the rules that govern how the position management procedures are assigned to the positions. You control the assignment using the parameters Accounting code, valuation area, valuation class, product category, product type, transaction type, portfolio and securities account group.

 You can define position management procedures dependent on the accounting code, valuation area, product type and transaction type. This enables you to take different statutory regulations into account for valuation.

 When assigning the position management procedures, you can use the criteria valuation area, accounting code, product category, product type, valuation class and transaction type, for example.

 For all newly created positions, the position management procedure is initially derived from the data stored here. You can change this default value manually using the transaction Maintain Position Management Procedures (TPM50).

 To ensure that a position management procedure is found in all cases, you can define a default procedure (where all influencing factors have their initial value).

 If, for example, you do not specify the accounting code area, these settings apply for all areas.

 It is important to save a position management procedure for all products to ensure valuation and position management takes place without errors.

 The Assignment of position management procedure will maintain the relationship between valuation area, class, product type, transaction type and portfolio.

 The Standard SAP Position Management Procedures will be adopted.

2.17 Define Update Types and Assign Usages

In this IMG activity, you define all the update types that are required to manage the positions in the parallel valuation areas.

The update type identifies the flow in position management. Both the external and internal

position management link attributes with in update type and enables properties to be assigned to a flow of the cash flow in this way.

The Standard update types will be considered.

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Settings for Position Management->Assign Position Management Procedure

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Accrual/Deferral->Update Types->Define Update Types and Assign Usages

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2.18 Define Accrual / Deferral

In this step, you assign an accrual/deferral procedure and an accrual/deferral method to the flow types that are subject to accrual/deferral.

In order to determine the profit for the period, revenues and expenses - independent of due date - must be assigned to the correct economic period. Via the accrual/deferral of expenses and revenues to a particular key date/period end (e.g. at end of fiscal year), you get the accrued/deferred expenses and revenues.

 When carrying out accruals/deferrals, we differentiate between the reset and difference procedures. In the reset procedure, the accrual/deferral carried out is withdrawn again on the next day. In the difference procedure, on the other hand, only the differences to the last accrual/deferral are posted.

 Update types that are relevant to accrual/deferral are defined per accounting code.  The TPM44 transaction is used for all postings.

2.19 Link to Other Accounting Components

In this menu option you define the account assignment references that you require.

Account assignment references are required for each sub ledger position and also for each class position in a securities account.

Treasury and FI integration is mapped here. One can use the account assignment references to determine the G/L account in FI in which the relevant position is to be managed. You assign the G/L accounts to the account references in the IMG activity Define Account Determination. You can use the account assignment references to control the posting of the sub ledger positions in the general ledger. You can use the account assignment reference of the class positions in the securities account to control the posting of dividend payments, interest payments and repayments for each securities account class position.

You do this by making the assignment of G/L accounts in FI dependent on the account assignment reference for each account symbol (position and interest/dividend revenue).

You create the account assignment references independent of the valuation areas. You can assign the account assignment references to positions valuation area-dependent and/or you control the account determination per valuation area and account assignment reference.

The following Standard Account Assignment references will be considered.

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Accrual/Deferral->Update Types-> Assign Update Types for

Accrual/Deferral

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Link to Other Accounting Components->Define Account Assignment References

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2.20 Define Account Assignment Reference Determination (OTC Transactions)

 In this Customizing item, you can save rules for automatically determining the account assignment references for the parallel valuation areas. The rules are defined per product group, where the product groups "Securities" and "Listed options / futures" are grouped together here.

 The account assignment reference determination can be controlled by a derivation rule or by an assignment.

 An assignment consists of two parts; the definition and the condition.

 The definition specifies which fields or which account assignment reference is used for the product type controlled in the condition.

 In the conditions area, you specify which product type the assignment applies to.

2.21 Indicate Update Types as Relevant to Posting:

 We have now used update types in many areas. Not all update types have to be designated as posting-relevant. In this Customizing item, you specify for each update type whether it is considered relevant to posting or not.

 If you mark an update type as relevant to posting, a posting document is generated when this update type is used. If the checkmark is not selected, the update type is not forwarded to financial accounting.

 The Standard update types will be maintained in SAP. 2.22 Define Account Determination

 In order to control the defined account assignment references to various accounts, account assignment has to be adjusted. The posting schemes and G/L accounts are assigned depending on the chart of accounts.

 First the account symbols are defined in abstract form. These are valid for all valuation areas.

 Since the account assignment references in the parallel valuation areas no longer contain the (original) information as to which account is to be posted to, you must also define an account symbol for the position.

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Link to Other Accounting Components->Define Account Assignment Reference Determination (OTC Transactions)

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Link to Other Accounting Components->Indicate Update Types as Relevant to Posting

IMG Path FSCMTRM Transaction ManagerGeneral SettingAccounting-> Link to Other Accounting Components->Define Account Determination

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 Double-click on "Definition of Account Symbols". A description and a posting type appear on the right for each account symbol. You specify that there are to be position postings and profit postings.



The position postings are entered directly into the balance, the profit postings are entered into the profit and loss statement.



You can also see that account symbol 3 is specified with the description bank clearing. This is the same as the posting record "11100 Position to bank clearing" that you just saw.



The correct bank clearing account is taken from the house bank stored in the business transaction.

 Before assignment of accounts, one has to define the account symbols. Depending on the posting area, different account symbols are defined. The following subdivision has been used :



1- Position posting



3- Bank clearing



4- Interest revenue/expense



5- Receivables



6-Amortization

 Define Account Determination is the step where SAP FI and Treasury Module will integrate and GL Accounts will be linked.

 One can define account determination settings for the flows in the parallel valuation areas. The account determination settings define the accounts to be used when the flows are posted to Financial Accounting. The system only posts flows in the parallel valuation areas if an update type is set as relevant to posting under Indicate Update Types as Relevant to Posting and posting specifications have been defined for the corresponding update types in this IMG activity.

 One can define different account determination settings for an update type, depending on the valuation area.

 The Account Determination will be decided along with discussion of SAP FI Team with ORGN Team. The GL Accounts related to posting will be maintained and assigned.

The following steps will be followed:

1. The postings specifications are applied for this update type in all the valuation areas. If one wants to assign a different set of posting specifications for a particular valuation area, it can do so in the next step (Valuation Areas -> Assignment of Update Types to Posting Specs).

2. In the step Valuation Areas -> The Assignment of Update Types to Posting Specs you can assign different posting specifications to the update types for individual valuation areas. 3. In the step Assignment of G/L Accounts to Account Symbols you define G/L accounts for

each account symbol. You can make the G/L account assignment dependent on the following criteria:

a. Valuation area

b. Account assignment reference c. Currency

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For payment processes from Treasury (TR), payment orders are sent to Bank Accounting (FI-BL). At the same time, a document is created in Treasury, and this document contains an item to be cleared in a technical clearing account from Bank Accounting. In the payment program for payment orders (transaction F111), the payment order is selected and executed. The payment document created clears the technical clearing account and posts to the bank subaccount. In the final process step, the electronic account statement clears this item in the bank subaccount against the bank account.

Clearing GL Account for Payment requests in Company Code 1000 is 19009020. It will take care of the payment requests coming from Treasury.

IMG Path Financial Accounting (New)  Bank Accounting  Business

Transactions  Payment Transactions  Payment Request  Define Clearing Accounts for Cross-Country Bank Account Transfers

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Money Market

In the following Customizing steps, you define which money market transactions are to be used in your company, and how they are shown in the system.

2.24 Product Types

2.24.1 Define Product Types

Product types help to differentiate between different Money Market financial instruments. Differentiation is necessary if the individual instruments are subject to different processing rules or if you wish to create different levels for evaluation. By assigning different structure characteristics, various forms of transactions can be predefined.

Only via the combination of the product type with a transaction type is the financial transaction finally set.

In this step, you maintain the product types you require.

1. Name your product type. You have a 3-character alphanumeric field for this. 2. Specify the long text and short text for your new product type.

3. Assign your product type to a product category. The product category is an internal key and controls how the product types assigned to it are processed.

Product type helps to differentiate between different Money Market financial instruments. The differentiation is necessary if the individual instruments are subject to different processing rules or different levels needs to be created for evaluation. By assigning different structure characteristics, various forms of transactions can be predefined.

Only via the combination of the product type with a transaction type is the financial transaction finally set. The Product type’s specific to ORGN will be maintained. The Product type is maintained with a 3-character alphanumeric field.

Product Type

Cond. Type

Product

Code Product Type Text Product Cat Text Text 51A 5 510 Fixed-Term Deposit Fixed-term deposit FixTrmDep.

52A 5 520 Deposit at Notice Deposit at notice Dep.notice

55A 5 550 Interest rate instrument Interest rate instrument IntRtInst

ZBC 5 550

Buyers / Suppliers Credit

Interest rate

instrument BUYERSCRDT

ZFC 5 550 Foreign Currency Loans Interest rate instrument FRCURRLOAN

ZLS 5 550 Loan to Subsidiaries

Interest rate

instrument LOANSUBSI

ZPC 5 550 Packing Credit in FC Interest rate instrument PCKCRDTFC ZPi 5 550 Packing Credit in INR Interest rate instrument PCKCRDTPI ZVL 5 550 Vehicle loan Interest rate instrument VHICLELOAN ZLN 5 550 INR Currency Loans Interest rate instrument INRCURLOAN

ZTA 5 550 Trade Advances

Interest rate

instrument TRADEADVN

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Product Type->Define Product Type

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2.25 Transaction Types 2.25.1 Define Number Ranges

In this step, you can define number range intervals for your financial transaction types. The financial transactions generated in the application receive a number comparable with the document number from Financial Accounting. The number assignment can either be transferred internally by the system or you can specify the number externally.

The assignment of transactions to a number range takes place in the step entitled Define

transaction types.

2.25.2 Define Transaction Types

In this step, you define your financial transactions and assign them to your product types. You also specify the considerable technical administrative functions that you can carry out with the product types you have defined.

Transaction types are financial transactions and are assigned to product types. From ORGN Perspective following transaction types will be maintained.

P

Type T Type

Name of Transaction

Type Processing Category Tran. Cat NR Rel. ease Cont. Type Text Cond. Type

51A 100 Investment ‘00002 100 1 X 5 Fixed-Term Deposit 5

55A 100 Investment ‘00002 100 1 X 5 Interest rate instrument 5 ZLS 100 Investment ‘00002 100 4 X 5 Investment in Subsidiaries 5

51A 200 Borrowing ‘00002 200 1 X 5 Fixed-Term Deposit 5

ZBC 200 Borrowing ‘00002 200 2 X 5 Buyers / Suppliers Credit 5 ZFC 200 Borrowing ‘00002 200 3 X 5 Foreign Currency Loans 5 55A 200 Borrowing ‘00002 200 1 X 5 Interest rate instrument 5

ZPC 200 Borrowing ‘00002 200 5 X 5 Packing Credit in FC 5

ZVL 200 Borrowing ‘00002 200 4 X 5 Vehicle Loan 5

ZLN 200 Borrowing ‘00002 200 5 X 5 INR Currency loans 5

2.26 Flow Types

Flow types control how the individual financial flows are handled in the system.

2.26.1 Define Flow Types

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Transaction Type->Define Number Ranges

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Transaction Types-> Define Transaction Types

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In this step, you define the necessary Flow types for your product types. A flow type must be defined for all possible flows in a transaction so that they can later be assigned.

Flows describe various payment flows arising from transaction conclusion, valuation and accrual/deferral functions as well as transfer postings. They are classified through flow types that you define in Customizing.

The sum of all transaction flows forms the basis for generation of the cash flow and describes possible changes to the updated payment flows. They also form the basis for updating transactions in FI and Cash management and for analysis in Market risk management.

Possible flow types include interest rates, repayments, principal increases and commissions. A flow type determines all possible flows in a transaction so that they can later be assigned to transactions. In Flow types, one can assign a classification, flow category and calculation category. The classification divides the flow types according to business criteria. The flow category allows the system to interpret settings and the calculation category determines the representation in the cash flow.

Following flow types are identified for ORGN Cont.

Type FTyp Flow Type - Name Flow type and Condition Name Calculation type 5 1100 Investment / Increase Principal Increase Inflow (generic) 5 1105 Borrowing / Increase Principal Increase Inflow (generic)

5 1110 Decrease Principal Decrease Outflow (generic)

5 1120 Final repayment Final Repayment Final repayment

5 1130 Installment repayment Installment Repayment Installment repayment 5 1140 Annuity Repayment Annuity Repayment Annuity repayment 5 1150 Interest capitalization Interest Capitalization Interest not settled 5 1200 Nominal interest Nominal Interest Nominal interest

5 1901 Charges Other Flow/Condition Fixed amounts

5 1902 Commission Other Flow/Condition Fixed amounts

5 1905 Withholding tax 1 (e.g. _state) Other Flow/Condition Fixed amounts 5 1906 Withholding tax 2 (e.g. _region) Other Flow/Condition Fixed amounts

5 5000 Taxes 1 Other Flow/Condition Fixed amounts

5 5001 Taxes 2 Other Flow/Condition Fixed amounts

2.26.2 Assign Flow Types to Transaction Type

In this step, you assign flow types to each product type at the transaction type level that is necessary in order to completely portray a financial product.

The ORGN Specific Assignment of Flow Types to transaction Types is attached herewith. IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction

Management->Flow Types-> Define Flow Types

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Flow Types-> Assign Flow Types to Transaction Type

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Assign Flow Types to Transaction Type.xlsx

2.27 Derived Flows

You can set up the transaction management area of the system to generate additional flows automatically on the basis of an original flow. You do this by defining derivation procedures and then assigning rules to each procedure. The rules determine how one flow is generated from another.

The derived flow can either be a specified fixed amount, or a percentage of the original flow amount. You can also set up the system to calculate the derived flow amounts differently according to the currency and original flow amount.

These rules determine the flow type from which they are derived and the structure that they have. You must also make additional setting in business partner administration for the business partners in the counterparty role in the corresponding company code.

Assign the derivation procedure to the produce type on the SI: Derived Flow Tab.

2.27.1 Define Calculation Procedure for Derived Flows

In this IMG activity, you can define the calculation procedures for generating derived flows. By defining calculation procedures, you can control the amount of the derived flows in relation to the currency and the amount of the original flow.

By choosing 'Define Derivation Procedures and Rules', you can then select one of the calculation procedures when you define the derivation rules.

2.27.2 Define Derivation Procedures and Rules

You can set up the transaction management area of the system to generate additional flows automatically on the basis of an original flow. You do this by defining derivation procedures and IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction

Management->Flow Types-> Assign Flow Types to Transaction Type

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Flow Types->Derived Flows->Define Calculation Procedure for Derived Flows

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Flow Types->Derived Flows->Define Derivation Procedures and Rules

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then assigning rules to each procedure. The rules determine how one flow is generated from another.

You create the necessary calculation procedures in the IMG activity Define Calculation Procedure for Derived Flows. These calculation procedures are then available when you define derivation procedures and rules in the IMG activity Define Derivation Procedures and Rules.

This function is available for the money market, foreign exchange, securities and derivatives areas. You define the calculation and derivation procedures globally for all applications. This means that you always see all the calculation and derivation procedures that have been defined, regardless of the IMG section you are in. By contrast, the derivation rules are specific to a particular area, and can only be created or changed within the IMG for that area. If, for example, you define rules for a tax on interest in the securities area, these settings are not visible in the money market, foreign exchange and derivatives areas.

2.28 Update Types

 Like flow types, update types correspond to cash flows. Update types control the posting of individual flows.

 A wide variety of update types are available in the system. The names of the types have been clearly selected so that all update types that start with MM belong to the money market area.

 Double-clicking on the "Assign update type to usages" folder takes you to the subsequent display. The possible usage types are:



1-Transaction management



2-Securities account management



3-Securities account transfer



4-Corporate action



5-Exercising rights



6-Accrual/deferral



7-Other flows

 The name and update type of the usages (such as transaction management or valuation) are assigned here.

 The update types are no longer module-dependent and have an implicit direction. This means, for example, that incoming and outgoing charges must be represented as two different update types.

 The new update types consist of the definition itself and a language-dependent text. No further indicators are defined directly with the update types.

 The Standard SAP Update Types maintained in System are as attached.

MM - Assign Update Types to Usages.xlsx

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Update Types-> Define Update Types and Assign Usages

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2.29.1 Assign Flow Types to Update Types

 The link to Accounting is created via assigning the flow types to update types. When creating a new update type, make sure that inflows and outflows are taken into account. In certain cases, you can use different update types for these.

2.30 Condition Types

In this section, you define the condition types for Money market and assign them to the transaction types

2.30.1 Define Condition Types

 Condition types control how flows calculated by the system are handled, such as interest, repayments and charges. They enable you to individually control interest rate flows, for example.

 There is a 1:1 relationship between the condition types and flow types. In other words, precisely one flow type has to be created for each condition type. However, a flow type does not have to be assigned to a condition type if no cash flows that are to be calculated are mapped using the flow type.

 Conditions can be classified using the following attributes:



Structure characteristics



Accrual/deferral



Valuation



Transfer

The Standard SAP conditions are attached herewith.

MM - Maintain Condition Types.xlsx

2.30.2 Assign Condition Types to Transaction Type

 After condition types have been defined, they have to be assigned to the product categories or transaction types.

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Update Types-> Assign Flow Types to Update Types

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Condition Types-> Define Condition Types

IMG Path FSCMTRM Transaction ManagerMoney MarketTransaction Management->Condition Types-> Assign Condition Types to Transaction Type

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 You have to fill the drop-down menu for the classification in the same way as for the flow types.

 The condition, calculation and profile type control how the amounts are calculated, depending on the conditions recorded in the transaction.

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Foreign Exchange 2.31 Product Types

2.31.1 Define Product Types

Product types help to differentiate between different Money Market financial instruments. Differentiation is necessary if the individual instruments are subject to different processing rules or if you wish to create different levels for evaluation. By assigning different structure characteristics, various forms of transactions can be predefined.

Only via the combination of the product type with a transaction type is the financial transaction finally set.

In this step, you maintain the product types you require.

1. Name your product type. You have a 3-character alphanumeric field for this. 2. Specify the long text and short text for your new product type.

3. Assign your product type to a product category. The product category is an internal key and controls how the product types assigned to it are processed.

The Product types applicable to ORGN are:

From ORGN Standpoint, Product Type 60A will be configured as below.

Product Type Cond. Product Code Product Type Text Product Type Text

60A 4 600 Foreign exchange (FX) Foreign exchange FX

2.32 Number Ranges

2.32.1 Define Number Ranges for Transaction

In this step, you can define number range intervals for your financial transaction types. The financial transactions generated in the application receive a number comparable with the document number from Financial Accounting. The number assignment can either be transferred internally by the system or you can specify the number externally.

The assignment of transactions to a number range takes place in the step entitled Define

transaction types.

2.32.2 Define Number Ranges for Underlying Transaction

In this step, you can define number range intervals for your underlying transactions. The number assignment can be carried out internally by the system or you can specify the number externally.

Define transaction types are the step used to assign the underlying to a number range. 2.32.3 Define Transaction Types

In this step, you define your financial transactions and assign them to your product types. You also specify the considerable technical administrative functions that you can carry out with the product types you have defined.

IMG Path FSCMTRM Transaction ManagerForeign ExchangeTransaction Management->Transaction Types-> Define Transaction Types

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2.32.4 Assign Forex Attributes

The Characteristics attributes are assigned to the FOREX products transactions.

2.32.5 Assign Fixing Spreads

The Characteristics attributes are assigned to the FOREX products transactions.

In this step, you maintain the spreads for fixing transactions which determine the difference between bid and ask rates and between middle and ask.

2.33 Flow Types

Flow types control how the individual financial flows are handled in the system. 2.33.1 Define Flow Types

In this step, you define the necessary Flow types for your product types. A flow type must be defined for all possible flows in a transaction so that they can later be assigned

Flows describe various payment flows arising from transaction conclusion, valuation and accrual/deferral functions as well as transfer postings. They are classified through flow types that you define in Customizing.

The sum of all transaction flows forms the basis for generation of the cash flow and describes possible changes to the updated payment flows. They also form the basis for updating transactions in FI and Cash management and for analysis in Market risk management.

Possible flow types include interest rates, repayments, principal increases and commissions. The Standard Product types are maintained for ORGN.

2.33.2 Assign Flow Types to Transaction Type

In this step, you assign flow types to each product type at the transaction type level that is necessary in order to completely portray a financial product.

IMG Path FSCMTRM Transaction ManagerForeign ExchangeTransaction Management->Transaction Types-> Assign Forex Attributes

IMG Path FSCMTRM Transaction ManagerForeign ExchangeTransaction Management->Transaction Types-> Assign Fixing Spreads

IMG Path FSCMTRM Transaction ManagerForeign ExchangeTransaction Management->Flow Types-> Define Flow Types

IMG Path FSCMTRM Transaction Manager Foreign Exchange Transaction Management->Flow Types-> Assign Flow Types to Transaction Type

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2.34 Derived Flows

These rules determine the flow type from which they are derived and the structure that they have. You must also make additional setting in business partner administration for the business partners in the counterparty role in the corresponding company code. Assign the derivation procedure to the produce type on the SI: Derived Flow Tab.

2.34.1 Define Calculation Procedure for Derived Flows

In this IMG activity, you can define the calculation procedures for generating derived flows. By defining calculation procedures, you can control the amount of the derived flows in relation to the currency and the amount of the original flow.

By choosing 'Define Derivation Procedures and Rules', you can then select one of the calculation procedures when you define the derivation rules.

2.34.2 Define Derivation Procedures and Rules

You create the necessary calculation procedures in the IMG activity Define Calculation Procedure for Derived Flows. These calculation procedures are then available when you define derivation procedures and rules in the IMG activity Define Derivation Procedures and Rules.

This function is available for the money market, foreign exchange, securities and derivatives areas. You define the calculation and derivation procedures globally for all applications. This means that you always see all the calculation and derivation procedures that have been defined, regardless of the IMG section you are in. By contrast, the derivation rules are specific to a particular area, and can only be created or changed within the IMG for that area. If, for example, IMG Path FSCMTRM Transaction Manager Foreign Exchange Transaction

Management->Flow Types->Derived Flows->Define Calculation Procedure for Derived Flows

IMG Path FSCMTRM Transaction Manager Foreign Exchange Transaction Management->Flow Types->Derived Flows->Define Derivation

Procedures and Rules

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you define rules for a tax on interest in the securities area, these settings are not visible in the money market, foreign exchange and derivatives areas.

2.35 Update Types

 Like flow types, update types correspond to cash flows. Update types control the posting of individual flows.

 A wide variety of update types are available in the system. The names of the types have been clearly selected so that all update types that start with MM belong to the money market area.

 Double-clicking on the "Assign update type to usages" folder takes you to the subsequent display. The possible usage types are:



1-Transaction management



2-Securities account management



3-Securities account transfer



4-Corporate action



5-Exercising rights



6-Accrual/deferral



7-Other flows

 The name and update type of the usages (such as transaction management or valuation) are assigned here.

 The update types are no longer module-dependent and have an implicit direction. This means, for example, that incoming and outgoing charges must be represented as two different update types.

 The new update types consist of the definition itself and a language-dependent text. No further indicators are defined directly with the update types.

The Standard configuration for Update types will be maintained and configuration other than standard will be worked on if required specific to ORGN.

2.36.1 Assign Flow Types to Update Types

 The link to Accounting is created via assigning the flow types to update types. When creating a new update type, make sure that inflows and outflows are taken into account. In certain cases, you can use different update types for these.

IMG Path FSCMTRM Transaction Manager Foreign Exchange Transaction Management->Update Types-> Define Update Types and Assign Usages

IMG Path FSCMTRM Transaction Manager Foreign Exchange Transaction Management->Update Types-> Assign Flow Types to Update Types

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Securities

2.37 Basic Settings

2.37.1 Define Currency Units

The ratio of currency units to a currency is maintained. When you enter transactions in the Securities area, you assign a currency unit to the security price. The system uses this ratio between the currency unit and the corresponding currency to calculate the currency amount using the formula "price * no. of units".

The currency unit is required for technical reasons and must be maintained for each exchange rate you use.

2.37.2 Define Exchange

The relevant exchanges are maintained here. The ORGN specific entries are as below:

2.37.3 Define Security Price Types

In Define Security Price Types, the various price types for securities are maintained. The individual security prices are maintained here.

2.38 Product Types

2.38.1 Define Number Ranges for Security Classes

In this section you define number ranges which you later assign to product types. Within this number range interval, you define the class data for the individual product types.

2.39 Condition Types

2.39.1 Define Condition Types

IMG Path FSCMTRM Transaction ManagerSecurities Basic Settings-> Product Type-> Define Currency units

IMG Path FSCMTRM Transaction ManagerSecurities Basic Settings-> Product Type-> Define Exchange

IMG Path FSCMTRM Transaction ManagerSecurities Basic Settings-> Product Type-> Define Security Price Types

IMG Path FSCMTRM Transaction ManagerSecuritiesMaster Data-> Product Type->Define Number Ranges for Security Classes

IMG Path FSCMTRM Transaction ManagerSecuritiesMaster Data-> Product Type->Condition Types->Define Condition Types

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In this step you define your condition types for the securities area.

For each condition type, you create a three-character key and assign the appropriate flow type to it. The system then assigns the flow category and the FiMa calculation category from the flow type to the condition type automatically.

In order to ensure correct cash flow processing, you must enter a reference condition type for some condition types. For floaters, for example, the interest rate adjustment date or the fixing of the maximum or minimum interest rate refers to the variable interest rate. You must enter the indicator of the corresponding reference condition type.

Cont.Type CTyp Condition Type Text RefC Docu FiMa

2 100 Int. (perc.-quoted) TZ 2 101 Variable interest TZ 2 111 Dividend TD 2 113 Bonus TD 2 116 Profit distribution TD 2 118 Repayment rate UT 2 119 Repayment price UT 2 133 Additional payment TD 2 134 Int. (unit-quoted) TZST

2 209 Int. rate adjustment 101 ZA

2 260 ABS/MBS Inst.Repayt TTRA

2 261 Annuity repayment TTAN

2 262 Installment repayment TTRA

2 263 Final repayment TTEN

2 300 Issue: Interest TZ

2 301 Issue: Var. Interest TZ

2 309 Issue: Int. Adjust. 301 ZA

2 310 Issue: Ann. Repayment TTAN

2 311 Issue: Inst. Repayt. TTRA

2 312 Issue: Final Repayt TTEN

2 318 Issue: Payoff UT

2 900 IS-B: Blank condit.

2.39.2 Define Condition Groups

In this step you define the various condition groups, to which you then assign your condition types. The Standard SAP Configuration will be adopted for grouping of condition types.

2.39.3 Assign Condition Types to Condition Groups

In this step, you assign the required condition types to condition groups.

IMG Path FSCMTRM Transaction ManagerSecuritiesMaster Data-> Product Type->Condition Types->Define Condition Groups

IMG Path FSCMTRM Transaction ManagerSecuritiesMaster Data-> Product Type->Condition Types->Assign Condition Types to Condition Groups

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2.40 Define Product Types

In this IMG activity you define product types and assign each one to a condition group, a product category, and a number range. All the entries you make here are valid for all company codes. By assigning product types to condition groups, you ensure that only certain conditions types can be maintained or displayed as standard conditions for each product type.

The product category is an internal key that controls how the product type assigned to it is processed. By assigning the product type to a number range, you can control how numbers are assigned when you create class data. If you opt for external number assignment, the system assigns numbers sequentially from the predefined interval. If you opt for external number assignment, the system checks whether the number entered manually is already being used for a class within this number range.

Product

Type Cond. Prod. Code Product Type Text Text Product Cat Text Type

NCD 2 40 Debentures DEBENTURES Bond

ZMF 2 20 Mutual Funds - Short Term MF Investment _certificate

2.41 Assign Repayment Types to Product Types

In this menu option you enter the possible repayment types for each product type. The repayment types are defined under an internal key. The following are supported for securities at present:

1 = Final repayment 2 = Installments 3 = Annuity

4 = Perpetual bond

2.42 Define Company Code-Dependent Settings for the Product Type

In this section you make the following settings for your product types for each company code: Cash Management

IMG Path FSCMTRM Transaction ManagerSecuritiesMaster Data-> Product Type->Define Product Types

IMG Path FSCMTRM Transaction ManagerSecuritiesMaster Data-> Product Type->Define Company Code-Dependent Settings for the Product Type

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 Enter a planning type for updating Cash Management.

 Enter an update period for Cash Management (CM period). For securities without a term end (such as stocks or perpetual bonds), this period indicates how many years in advance you want the system to generate planned records for conditions with a frequency. Accounting

 FI posting indicator: Determine whether and, if so, how flows relating to a product type in a company code are to be posted to the FI General Ledger.

The following values are supported for securities: o 2: no postings in FI General Ledger

o 3: posting in FI General Ledger with customer o 4: posting in FI General Ledger without customer Automatic posting

 In the posting control field, specify whether flows relating to a product type in a company code are to be posted by the automatic posting function.

Generating incoming payment flows

 In the incoming payment field, you decide if incoming payment flows are to be generated.

Generating taxes

 You can decide whether taxes are to be generated (according to the rules you defined for tax generation) for a product type in a company code.

2.43 Securities Account Management 2.43.1 Define Securities Account Categories

 You can define securities account types for the securities account master data. You therefore determine several categories for the securities account types. You have to determine a securities account category for every securities account type. The category contains information on which positions can be managed in the relevant securities accounts.

The following categories are available as choice:

 Asset Securities Account: For securities accounts in this category, you can manage all positions that do not belong to liability positions or securities lending transactions.

 Liability Securities Account: Liability securities accounts only contain positions for securities issues. The system makes sure that liability securities accounts cannot be transferred to asset securities accounts or lending securities accounts. It also ensures that asset positions or positions from securities lending transactions are not transferred to a liability securities account.

 Lending Securities Account: For a securities lending transaction, you transfer the lent securities at the start of the term from the asset securities account to a lending

IMG Path FSCMTRM Transaction ManagerSecuritiesPosition Management -> Define Securities Account-> Define Securities Account Categories