How To Fix THMHR_ADMIN457 - Derivative was assigned too high on hedge inception date

THMHR_ADMIN457 - Overview

• Message type: E = Error

• Message class: THMHR_ADMIN - Messages for managing hedge relationships

• Message number: 457

• Message text: Derivative was assigned too high on hedge inception date

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.

Smart SAP Assistant

• What is the cause and solution for SAP error message THMHR_ADMIN457 - Derivative was assigned too high on hedge inception date ?

  The SAP error message THMHR_ADMIN457 indicates that a derivative instrument has been assigned a hedge relationship that is considered too high on the hedge inception date. This typically occurs in the context of hedge accounting within SAP Treasury and Risk Management (TRM) module, where the system checks the effectiveness of the hedge at the inception date.
  
  Cause:
  
  Hedge Ineffectiveness: The hedge relationship may not meet the effectiveness criteria set by accounting standards (e.g., IFRS or US GAAP). This can happen if the fair value of the derivative is significantly higher than the underlying exposure it is hedging.
  Incorrect Valuation: The valuation of the derivative or the underlying exposure may be incorrect or not aligned with market conditions.
  
  Configuration Issues: There may be issues with the configuration of the hedge accounting settings in SAP, leading to incorrect assessments of the hedge relationship.
  Data Entry Errors: Incorrect data entry during the setup of the hedge relationship can