How To Fix TPM_THXE1013 - Hedging rel. &1/&2: Prospective test on &3 is not effective

SAP Error Message - Details

• Message type: E = Error

• Message class: TPM_THXE1 - message class for effectiveness test

• Message number: 013

• Message text: Hedging rel. &1/&2: Prospective test on &3 is not effective

What causes this issue?

You want to calculate a prospective effectiveness test for a given test
date. This step in Hedge Accounting is only allowed if the hedging
relationship was always tested as effective in the history before the
test date in both test types, prospective and retrospective
effectiveness test.

System Response

How to fix this error?

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

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 TPM_THXE1013 - Hedging rel. &1/&2: Prospective test on &3 is not effective ?

  The SAP error message TPM_THXE1013 indicates that a prospective test for a hedging relationship is not effective. This error typically arises in the context of hedge accounting within SAP Treasury and Risk Management (TRM) when the system evaluates the effectiveness of a hedging relationship.
  Cause:
  The error message can be triggered by several factors, including:
  
  
  Ineffective Hedging Relationship: The hedging relationship may not meet the effectiveness criteria as defined by accounting standards (e.g., IFRS 9 or ASC 815). This could be due to a mismatch in the hedged item and the hedging instrument.
  
  
  Data Issues: There may be missing or incorrect data in the hedging relationship setup, such as incorrect valuation parameters, missing cash flow data, or incorrect hedge designation.
  
  
  Market Conditions: Changes in market conditions can lead to a situation where the hedging instrument no longer effectively offsets the risk associated with the hedged item.
  
  
  Configuration Issues: Incorrect configuration in the SAP system related to hedge accounting or the specific hedging relationship can also lead to this error.
  
  
  Solution:
  To resolve the TPM_THXE1013 error, consider the following steps:
  
  
  Review the Hedging Relationship: Check the details of the hedging relationship (e.g., hedged item, hedging instrument) to ensure they are correctly defined and aligned with accounting standards.
  
  
  Check Effectiveness Testing Parameters: Ensure that the parameters used for effectiveness testing are correctly set up. This includes the method of testing (e.g., dollar-offset method, regression analysis) and the relevant data.
  
  
  Validate Data: Ensure that all necessary data for the hedged item and hedging instrument is complete and accurate. This includes cash flow data, valuation parameters, and any other relevant information.
  
  
  Market Analysis: Analyze the current market conditions to determine if they have affected the effectiveness of the hedging relationship. If necessary, consider adjusting the hedging strategy.
  
  
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on the error message and the effectiveness testing process.
  
  
  Engage with SAP Support: If the issue persists after checking the above points, consider reaching out to SAP support for further assistance. They can provide insights based on the specific configuration and data in your system.
  
  
  Related Information:
  
  Hedge Accounting Standards: Familiarize yourself with the relevant accounting standards (IFRS 9, ASC 815) that govern hedge accounting and effectiveness testing.
  SAP Notes: Check for any SAP Notes related to this error message, as they may provide additional context or solutions.
  Training and Documentation: Consider training for users involved in hedge accounting to ensure they understand the requirements and processes involved in maintaining effective hedging relationships.
  
  By following these steps, you should be able to identify the cause of the error and implement a solution to resolve it.