How To Fix THM_CENTRAL228 - Effectiveness test method is not a dollar-offset method

SAP Error Message - Details

• Message type: E = Error

• Message class: THM_CENTRAL - Central messages for E-HA

• Message number: 228

• Message text: Effectiveness test method is not a dollar-offset method

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message THM_CENTRAL228 - Effectiveness test method is not a dollar-offset method ?

  The SAP error message THM_CENTRAL228 indicates that the effectiveness test method you are trying to use is not a dollar-offset method. This error typically arises in the context of hedge accounting, where the effectiveness of a hedging relationship must be assessed to ensure compliance with accounting standards.
  Cause:
  The error occurs when:
  
  You are attempting to use a specific effectiveness test method that is not compatible with the dollar-offset approach.
  The configuration of the effectiveness test methods in your SAP system does not include a dollar-offset method, or the selected method is not set up correctly.
  
  Solution:
  To resolve this error, you can take the following steps:
  
  
  Check Effectiveness Test Method Configuration:
  
  Go to the configuration settings for hedge accounting in your SAP system.
  Verify the effectiveness test methods that are available and ensure that at least one dollar-offset method is configured.
  
  
  
  Select the Correct Effectiveness Test Method:
  
  When setting up or modifying a hedging relationship, ensure that you select a dollar-offset method if that is required for your specific scenario.
  You can typically find this option in the hedging relationship settings or during the setup of the hedge.
  
  
  
  Review Documentation:
  
  Consult the SAP documentation or help resources related to hedge accounting and effectiveness testing to understand the requirements and options available for your version of SAP.
  
  
  
  Consult with SAP Support:
  
  If you are unable to resolve the issue through configuration changes, consider reaching out to SAP support for assistance. They can provide guidance based on your specific system setup and version.
  
  
  
  Related Information:
  
  Hedge Accounting: This is a method used in accounting to manage the risk of financial instruments. It involves designating certain financial instruments as hedges against specific risks.
  Effectiveness Testing: This is a requirement under accounting standards (like IFRS 9 or ASC 815) to ensure that the hedging relationship is effective in offsetting the changes in fair value or cash flows of the hedged item.
  Dollar-Offset Method: This is one of the methods used to assess hedge effectiveness, which compares the changes in the fair value or cash flows of the hedged item and the hedging instrument.
  
  By following these steps and understanding the context of the error, you should be able to address the issue effectively.