How To Fix FTBCVA034 - No transactions with positive NPV: CVA is discarded

SAP Error Message - Details

• Message type: E = Error

• Message class: FTBCVA - Credit Value Adjustment

• Message number: 034

• Message text: No transactions with positive NPV: CVA is discarded

What causes this issue?

According to the allocation method <LS>net relative fair value approach
</> , the CVA of a netting group should be distributed to those
financial transactions within the netting group which have a positive
fair value. However, in this case no such financial transaction exists.

System Response

CVA is set to zero for all financial transactions, as none of them
represents an asset, even though the CVA of the netting group is not
zero.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message FTBCVA034 - No transactions with positive NPV: CVA is discarded ?

  The SAP error message FTBCVA034, which states "No transactions with positive NPV: CVA is discarded," typically occurs in the context of Credit Valuation Adjustment (CVA) calculations in SAP's Financial Services module. This error indicates that the system did not find any transactions that have a positive Net Present Value (NPV) for the CVA calculation, leading to the CVA being discarded.
  Cause:
  
  
  No Positive NPV Transactions: The primary cause of this error is that there are no transactions in the portfolio that yield a positive NPV. This can happen if:
  
  The cash flows from the transactions are not favorable.
  The discount rates applied to the cash flows result in a negative or zero NPV.
  There are no active transactions or the transactions are not properly configured.
  
  
  
  Incorrect Configuration: The configuration settings for the CVA calculation might not be set up correctly, leading to the system not recognizing any transactions as valid for the calculation.
  
  
  Data Issues: There may be issues with the underlying data, such as missing or incorrect transaction details, which can affect the NPV calculation.
  
  
  Solution:
  
  
  Review Transactions: Check the transactions that are being considered for the CVA calculation. Ensure that there are transactions with positive cash flows and that they are correctly configured in the system.
  
  
  Check Cash Flow and Discount Rates: Analyze the cash flows associated with the transactions and the discount rates being applied. Ensure that the rates are appropriate and that the cash flows are expected to yield a positive NPV.
  
  
  Configuration Review: Review the configuration settings for CVA in the SAP system. Ensure that all necessary parameters are correctly set up and that the system is configured to include the relevant transactions.
  
  
  Data Validation: Validate the data related to the transactions. Ensure that all required fields are populated and that the data is accurate.
  
  
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on CVA calculations and the conditions under which this error may occur.
  
  
  Testing: If changes are made, conduct tests to ensure that the CVA calculation now includes transactions with positive NPV.
  
  
  Related Information:
  
  CVA in SAP: CVA is a risk management tool used to quantify the risk of counterparty default in derivative transactions. It is essential for financial institutions to manage credit risk effectively.
  SAP Financial Services: This module includes various functionalities for managing financial transactions, including risk management, compliance, and reporting.
  Transaction Codes: Familiarize yourself with relevant transaction codes in SAP that pertain to CVA and risk management, such as those for reporting and analysis.
  
  If the issue persists after following these steps, it may be beneficial to consult with an SAP expert or support team for further assistance.