How To Fix THMHR_ADMIN414 - Hedging relationship &1 &2 dissolved due to proven ineffectiveness

THMHR_ADMIN414 - Overview

• Message type: E = Error

• Message class: THMHR_ADMIN - Messages for managing hedge relationships

• Message number: 414

• Message text: Hedging relationship &1 &2 dissolved due to proven ineffectiveness

What causes this issue?

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

System Response

How to fix this error?

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

THMHR_ADMIN414 - Details

• The SAP error message THMHR_ADMIN414 indicates that a hedging relationship has been dissolved due to proven ineffectiveness. This typically occurs in the context of hedge accounting, where the effectiveness of a hedging relationship is assessed to ensure that it meets the criteria set by accounting standards (such as IFRS or GAAP).
  
  Cause:
  
  
  Ineffectiveness Assessment: The hedging relationship is deemed ineffective based on the results of the effectiveness testing. This can happen if the changes in the fair value or cash flows of the hedged item do not offset the changes in the fair value or cash flows of the hedging instrument within the required range.
  
  
  Market Conditions: Changes in market conditions, such as volatility in interest rates, foreign exchange rates, or commodity prices, can lead to a situation where the hedging instrument no longer effectively offsets the hedged item.
  
  
  Changes in Hedged Item: If there are changes in the characteristics of the hedged item