Cash settlement of commodity futures

Hi gurus,
I am very new to commodity trading risk management, Can anyone pls explain me regarding the process to follow for cash setllement of commodity futures/Futures contract with steps.
Regards
Dheeraj

hi,
Can anyone respond to my query; as I want to know how Commodity Futures/Currency futures are cash settled in SAP. Is it a standarad function in SAP.
Regards
Dheeraj

Similar Messages

Error while settling Commodity futures 70D while TBB1

Hi
We are getting both profit as well as loss when we run TBB1 for settlement of Commodity futures
for Product type 70D.
We have added brokerage, service tax in other flows both in purchase and sale transaction.
The other flows of purchases are coming as loss and other flows from sales transaciton are
getting reduced from the profits. We understand some issue with DBT_B020 (Derived flow for
Variation margin Loss).
We are expecting the other flows of purchase transaciton to be deducted from profits as it is
doing for other flows of sale transaciton.
Wanted to check here whether any config needs to be done to arrive at this.
Example
Purchase transaction
Purchase value Rs 1,00,000-
Other flows      Rs    2,000-
Total cost     Rs 1,02,000-
Sale transaciton
Sale value     Rs 1,20,000+
Other flows    Rs    2,000-
Total cost     Rs 1,18,000+
But we are getting two entries
1. Profit on sale Dr.       Rs 18,000
      To. Margin Variantion Rs 18,000
And
2. Margin Variantion Rs 2,000
       T0. Loss on sale   Rs 2,000
When we run TBB1 we expect only one entry for profit of Rs. 16,000
Regards
Venkat

Table for commodity futures transactions

Hi guys, i have no idea of TRM, and i would like to know if commodity futures transactions are stored in any table.
Thanx
Jon

To my knowledge all the treasury transactions / transactions flows are saved in trables VTBFHA / VTBFHAPO. Can you plese chech these tables.

De activating the CASH Settlements for FX deals.

Hi
Can any one please let us knwo how can i de activate the cahs settlements option for FX deals.
Regards
karunakar

Hi Karunakar,
The contract, here is the forex deal. Suppose the deal is for purchase of 100 USD/INR at a strike price of 50. It means you buy 100 USD and sell 5000 INR on the day of delivery. When this money in both currencies are transferred then it is physical delivery.
Instead, on the day of delivery, the exchange rate for USD/INR is 52. Your contract is for 50. Hence you gain 2 INR for every USD. Hence your total gain is 200 INR. If the gain amount alone is transferred i.e. only 200 INR is transferred to you from the counter party, it is cash deal. Only the gain/loss is transferred and the actual physical delivery does not take place.
Generally cash settlement is what happens in most of the cases.
Regards,
Ravi
Edited by: Ravishankar Ramamurthy on Sep 2, 2009 10:20 AM

Forward Contracts Rollover and Cash Settlement

Hi,
We have done a forward contract USD - INR at 50.00 and then done the rollover at new rate 52.00. In the rollover transaction which was done at the rate 52.00, we also need to do the cash settlement of the original booking transaction as the original transaction is logically cancelled and the new transaction is booked.
The cash settlement is done at say 49.00. In this case the cash settlement amount should be (50.00 - 49.00) where as the system is calcuating the cash settlement amount as (52.00 - 49.00)
Should I use the cash settlement functionality of the booking transaction. Please suggest.
An help in this regard will be sincerely appreciated.
Warm regards,
Akhil Poddar

Hi,
You are going for cash settlement, it means you are now cancelling the old transaction. The system is giving 52-49 because you have rollove the transaction it means you have exceed the maturity time of the contract, it means now your exchange rate changed to 52 from 50, the differenc is captured here and when you have passed cash settlemented with 49, system compare it with 52 a new rate.when you see the GL after passing all the entries you will find the result is 50-49 only.
If you want one to one relation, pass cash settlement and create new transaction,
Regards
Narinder Pal Verma
+91-9818882409

How to delete cash settlement in forward contract?

I am facing an in treasury module for forward contracts, earlier I had filled data in cash settlement tab in tx02, not release or posted, now I donu2019t want to do cash settlement but I am able to delete data in cash settlement tab in tx02 but it gives some error while saving , basically its not allowing me to delete all data in cash settlement tab and save.
Any pointers on how to resolve this problem will be appreciated.

Hi
If you want to de activate the cash settlement process for this product type then below is the menu path to de activate the.
In IMG -- TRTM -- Transaction Manager -- Foreign Exchange -- Transaction Management -- Define Product types.
Here specify the type of settlement as physical.
Regards,
Karunakar

Non-deliverable Forward - 1031 Cash settlement flow is empty

Hello, please help me with non-deliverable forward.
I've got forward product type with settlement indicator = Non-deliverable forward.
Next flow types are assigned to it (flow types have default settings):
1000    Buy foreign exchange    Principal Increase
1031    Cash settlement    Cash Settlement
2000    Sell foreign exchange    Principal Increase
When I create Forward transaction with next conditions:
System generates cash flows, but flow 1031 have zero value;
What should I need to do to have flow 1031 = 1 750 000 RUB ??

Hello Juerg!
If I don't mistake you described steps for the case then Product Type have Settlement indicator = 'Cash settlement' in customizing.
In this case we have 'Cash settlement' button on the 'Structure' page of FTR_EDIT.
In this case system works OK, and '1031    Cash settlement' flow is calculated correctly.
But my case is then Product Type have Settlement indicator = 'Non-deliverable forward' in customizing
In that case we don't have 'Cash settlement' button on the 'Structure' page of FTR_EDIT.
Instead of it we can choose which currency we need to settle in.
In that case '1031    Cash settlement' flow is empty as wrote previously.
So the problem is still actual

Treasury - Cash Settlement

Dear All,
       While doing the Cash Settlement in Treasury, I want additional fields for maintaining the values which we are getting in "INR".
      If any one have done this then please reply immediately.
      Points will be rewarded.
Edited by: VICKY KHAMBHATI on Mar 6, 2008 7:18 AM

Self solution. Using Badi

Settlement Posted to future period

Hi All,
User has execute the settlement in CJ88 to an asset by giving future period 12/2010. Value of settlement was Zero and no accounting document got generated. Only CO and Asset line items with Zero values.
Now when he tries to reverse the settlement it is giving error
"Reversal cannot be posted (system error)
Procedure
When you reverse a posting that originated during the transfer of balances during the asset data transfer, use transaction OASV (FI-AA Customizing "Transfer balances"). Manually create a reverse posting (with reversed positive/negative signs) for each line item in the document you want to reverse. If it is no longer possible to use transaction OASV, use transaction ABF1"
There is no asset document generated and we can reverse as above.
It is not allowing to settle for 01/2010, as it says perform settlement after 12/2010.
Please let me know how this issue can be resolved.
Thanks
Satish

Hi,
For new asset the Capitalization date is not updated in the Asset Master and for old asset the date is previous settlement date.
Thanks
Satish

Cash sales using Pricing procedure for account determination cash settl

Hi all ,
we are customizing for cash sales , we have defined all steps as per "cash account determination" in basic functions.but , system is posting again to customer account, i.e account receivable account.
if we assing "EVV" accounting key in the field "Account key for cash allocation" of billing type ( bv-cash sales),and assigning GL account for account key "EVV" in VKOA, it is working fine.
if we want to post cash account using cash account determination pricing procedure i.e by assining pricing procedure in billing document type, it is not working. Is there any additional cusotmizing has to be done in addition to steps involved in "cash account determination of basic functions?
can any one help on this?
regs,
ramesh

Hi,
thanq for your reply.
we have used same document types mentioned by you. for the same only cash account determination given.
if we remove revenue account determination procedure, system will not post accounting document, system will give message, this billing is not relevant for accounting.
our aim is to post sale account, but instead of accounts receivables, it has to post to cash clearing account.
so, we have assigned revenue account determination procedure ( for sales posting) and cash account determination procedure ( for cash clearing posting).
you may be right, some where i missed some thing, which is not tracked by me. If you can give steps, at least I can check, same thing was customized or not.
regs,
ramesh

Cash Sales : Invoice Printing

Hi All,
Can anyone please tell me , From where in cash sales is invoice printed ??
Regards,
Ashima

hi,
As the earlier post rightly said in Cash Sales(CS) the output is generated as you save the order and the out type assigned is RD03.
For cash sales, payment is made when the goods are ordered. The invoice is also printed at this time.
The SAP R/3 system offers a cash sale transaction for business transactions of this type.
n Cash sales have the following characteristics:
The order and the delivery are created in one step, although you receive a document for each.
Goods issue is posted at a later time as a separate transaction so the customer does not have to
wait.
Order type CS is used for cash sales. It has its own output type RD03 which allows you to print an invoice (receipt) from the order.The actual billing document can be created later after goods issue has been posted. To do this, use billing document type CS. Type CS is configured as follows:
order-related billing
no output determination, as this has already been carried out in the order
no new price determination, as the pricing should not differ from the printed invoice
posting in FI is made to a cash settlement account, not to the customer
billing type SV is used for cancellations in cash sales
regards,
Krishna Prasad

Cash sale account detrmination error

Hi all,
I am getitng the error as account determination error while saving the cash sale invoice.
I manitained the configuration EVV account key to the billing document type and maintianed the G/L account for accountkey in VKOA in spro.
May I know is there anything missing here?
Kindly do the needful
Thanks and Regards
Sri

Dear Vetukuri Srinivas,
You please check all the account determination process pertinent to cash sales.
Apart from that in cash sales billing document(VOFA) you have to maintain either account assignment key(EVV) or account determination procedure for cash settlement.
Check the GL account descriptions.
Hope it will work
Please revert
Thanks&Regards
Raghu.k

Currency future in CFM

Hi,
Where we have to customized currency future in CFM. It's not equity derivatives or commodity futures.
Regards,
Vishal Patel

Hi Vishal,
Can you please help me in currency future. as you said it is commodity and will be availabel in listed derivatives.
Please help where we can do the config. related to currency future and currency option.
Please help
Regards
Gaurav

NDF contract settlement rate

We are using an NDF contract (non-deliverable forward contract) is almost as a normal forward contract, with the exception that on maturity no delivery of the contracted currency is made. Instead the net market value of the contract is paid/received between the parties. The market value to be paid on maturity is decided by a specific settlement rate, agreed upon for the particular contract.
In SAP however the market value and the realized amounts for NDF contracts are calculated using the c-rate and the m-rate. This gives a market value that deviates from the true market value.
Is there any way, wherein SAP must be able to calculate the market value and reliazed value of specific NDF contracts correctly.
If anyone implemented the Z transaction, kindly let us know the changes.

Hi,
I am having a clarification. When you enter into a 3 month forward contract today, How can you post the gain/loss today. Also the gain/loss has to be posted using TPM18 in case of physical delivery.
After 3 months on the settlement date, you post the transactions in case of a normal forward. But in case of NDF, after 3 months on the settlement date, you click on cash settlement available in the transaction itself. Now you will get an option to input the rate on the settlement date. There you can input the contract settlement rate and it will post the difference gain/loss on that day.
Regards,
Ravi

Treasury management

hai,
what is treasury management? is it required for all industries. Please give some idea about it.
govind.

Treasury Management includes the following:
1. Cash and Liquidity Management
2. Treasury - Transaction Manager which includes the following sub-modules:
      Money Market
      Derivatives
      Foreign Exchange
      Securities
3.   Risk Management which includes the following sub-modules
      Market Risk Analyzer
      Credit Risk Analyzer
      Portfolio Analyzer
All the above modules are part of Financial Supply Chain Management in ERP 2005(ECC 6.0)
1. Cash and Liquidity Management - explained
Every corporation wants to meet its payment obligation to its vendors on time. In order to achieve this the Treasurer/CFO should have accurate information about the cash available on hand and the cash which is likely to flow in and out of the organization over a period (say from one day to one year).
In order to get this information SAP introduced the Cash and Liquidity Management module. In this module all information from other modules are collected in a summarized   form so that the Treasurer/CFO can look at them in a way he/she needs for making his decisions of borrowing/investing.
In order to achieve this the following modules should also be implemented:
Financial Accounting - Banks
The above module covers Electronic Bank Statement, Lockbox, Check Deposit etc.
2. Treasury - Transaction Manager - explained
Once the Treasurer has the above report (Cash Position and Liquidity) he/she knows that he/she has 'Excess' cash or he/she is 'short' of cash.
If there is excess cash it is invested in Money Market/Securities etc. and these transactions are managed in the Transaction Manager.
If they are short of cash, then the corporation borrows by either issuing bonds or by borrowing from banks in the form of Facilities and again these transactions are managed in the Transaction Manager.
These transactions (Investment and borrowing) also show up in the Cash Position and Liquidity report once they are entered in the Transaction Manager.
3.   Risk Management - explained
Once a corporation has Investments/borrowings they are exposed to various risks like Credit risk of the counter-party, Interest rate risk (the risk of interest rate going up or down) and Portfolio risk (the returns on their portfolio may go up or down). IN order to protect the corporation against various risks the company enters into various Derivative transactions like Interest rate SWAP, Forex Futures, Commodity Futures etc. These transactions can also be tracked within SAP. They can also be analyzed in the Risk management module.
All these modules are linked to the FI module so that all these transactions are posted to FI and the GL is updated automatically. For example if a company invests in an Overnight instrument. This involves an outflow of cash on the day of investment and inflow of cash and interest earned on the maturity date. All these transactions have to be posted to FI to update your GL. Because of the seamless integration of Transaction Manager to SAP FI all the postings happen automatically.
Treasury is a cool module and a consultant in this area has to intereact with the to officials of the corporation like the CFO or the Treasurer. Hence it is very glamorous area to work and also highly paid.
I hope this gives enough information about the Treasury module. If anybody is further interested contact me at [email protected].
Kalyan

Cash settlement of commodity futures

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