How To Fix TE874 - Do not change market value component calculation after designation

SAP Error Message - Details

• Message type: E = Error

• Message class: TE - Market Risk Management

• Message number: 874

• Message text: Do not change market value component calculation after designation

What causes this issue?

You changed the setting in the market value component calculation field
for calculation type &V1&.

System Response

If designated hedging relationships using this calculation type already
exist, this change leads to errors in the market value decomposition.

How to fix this error?

Do not change the market value component calculation setting if
designated hedging relationships using this calculation type already
exist.

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 TE874 - Do not change market value component calculation after designation ?

  The SAP error message TE874, which states "Do not change market value component calculation after designation," typically occurs in the context of financial instruments or asset management within SAP. This error is related to the handling of market value calculations for financial instruments that have already been designated for hedge accounting or similar purposes.
  Cause:
  The error arises when there is an attempt to modify the market value component calculation of a financial instrument after it has been designated. In SAP, once a financial instrument is designated for hedge accounting, the market value calculation becomes critical for maintaining the integrity of the hedge relationship. Changing the calculation method or parameters after designation can lead to inconsistencies and inaccuracies in financial reporting.
  Solution:
  To resolve this error, consider the following steps:
  
  
  Review Designation Status: Check if the financial instrument is already designated for hedge accounting. If it is, you cannot change the market value component calculation.
  
  
  Reassess Requirements: If a change is necessary, you may need to un-designate the financial instrument first. This process typically involves:
  
  Un-designating the financial instrument from hedge accounting.
  Making the necessary changes to the market value component calculation.
  Redesignating the financial instrument if required.
  
  
  
  Consult Documentation: Refer to SAP documentation or help resources specific to your version of SAP for detailed instructions on how to manage designations and market value calculations.
  
  
  Check Configuration: Ensure that the configuration settings for market value calculations are correctly set up in your SAP system. This may involve working with your SAP Basis or Financials team.
  
  
  Testing: After making changes, conduct thorough testing to ensure that the financial instrument behaves as expected and that the market value calculations are accurate.
  
  
  Seek Expert Help: If you are unsure about the implications of un-designating or changing calculations, consult with an SAP expert or your finance team to ensure compliance with accounting standards and internal policies.
  
  
  Related Information:
  
  Hedge Accounting: Understand the principles of hedge accounting and how they apply to your financial instruments.
  SAP Notes: Check for any relevant SAP Notes that may provide additional insights or updates related to this error message.
  Training: Consider training sessions for users involved in financial instrument management to prevent similar issues in the future.
  
  By following these steps, you should be able to address the TE874 error effectively while ensuring compliance with financial reporting standards.