How To Fix FTOE_HREQ_CORE087 - Hedging classification &1 must be inactive for hedge accounting.

SAP Error Message - Details

• Message type: E = Error

• Message class: FTOE_HREQ_CORE - Messages for Hedge Requests

• Message number: 087

• Message text: Hedging classification &1 must be inactive for hedge accounting.

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FTOE_HREQ_CORE087 - Hedging classification &1 must be inactive for hedge accounting. ?

  The SAP error message FTOE_HREQ_CORE087 indicates that a specific hedging classification (denoted by &1) must be inactive for hedge accounting to be applied. This error typically arises in the context of financial instruments and hedge accounting within SAP's Financial Supply Chain Management (FSCM) module.
  Cause:
  The error occurs when:
  
  The hedging classification you are trying to use is currently active, but it is not allowed to be active for the specific hedge accounting process you are attempting to execute.
  There may be a configuration issue where the hedging classification is incorrectly set up or is not aligned with the requirements for hedge accounting.
  
  Solution:
  To resolve this error, you can take the following steps:
  
  
  Check Hedging Classification Status:
  
  Go to the configuration settings for the hedging classification in SAP.
  Verify if the hedging classification indicated by &1 is indeed active. If it is active, you may need to deactivate it.
  
  
  
  Deactivate the Hedging Classification:
  
  If the hedging classification should not be active for the hedge accounting process you are using, deactivate it in the system.
  This can typically be done in the transaction code related to hedge accounting configuration (e.g., transaction code OTC1 or similar).
  
  
  
  Review Configuration Settings:
  
  Ensure that the configuration for hedge accounting is set up correctly. This includes checking the settings for the hedging relationship, the underlying exposure, and the hedging instrument.
  Make sure that the hedging classification aligns with the accounting standards and the specific requirements of your organization.
  
  
  
  Consult Documentation:
  
  Review SAP documentation or help files related to hedge accounting and hedging classifications for any specific guidelines or requirements that may apply.
  
  
  
  Testing:
  
  After making changes, test the hedge accounting process again to ensure that the error is resolved.
  
  
  
  Related Information:
  
  Hedge Accounting: This is an accounting method that aims to reduce the volatility in earnings caused by fluctuations in the value of financial instruments. It requires specific classifications and relationships to be established in the system.
  Hedging Classifications: These are categories that define how a hedging relationship is treated for accounting purposes. They must comply with relevant accounting standards (e.g., IFRS, GAAP).
  SAP Transactions: Familiarize yourself with relevant SAP transactions for managing hedge accounting, such as FTR_CREATE (to create a hedge relationship) and FTR_EDIT (to edit existing relationships).
  
  If the issue persists after following these steps, it may be beneficial to consult with your SAP support team or a financial consultant who specializes in SAP hedge accounting.