How To Fix VAL306 - Short positions are not amortized

SAP Error Message - Details

• Message type: E = Error

• Message class: VAL - Treasury: Messages for General Valuation

• Message number: 306

• Message text: Short positions are not amortized

What causes this issue?

You want to execute the valuation step amortization for a negative
position.

System Response

Amortization cannot be executed for a negative position. The valuation
step is left out during the key date valuation for this position.

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 VAL306 - Short positions are not amortized ?

  The SAP error message VAL306 ("Short positions are not amortized") typically occurs in the context of asset accounting or financial transactions involving short positions in securities or financial instruments. This error indicates that the system is attempting to amortize a short position, which is not allowed.
  Cause:
  
  Short Position Definition: A short position refers to a situation where an investor borrows a security and sells it, expecting to buy it back later at a lower price. In accounting terms, short positions are not treated the same way as long positions (where the asset is owned).
  Amortization Process: Amortization usually applies to long-term assets or investments that are being depreciated over time. Since short positions do not represent ownership of an asset, they cannot be amortized.
  Configuration Issues: There may be configuration settings in the SAP system that incorrectly allow for the amortization of short positions.
  
  Solution:
  
  Review Transaction: Check the transaction that triggered the error. Ensure that you are not attempting to amortize a short position. If you are, you will need to adjust your transaction accordingly.
  Correct Configuration: If the error is due to a configuration issue, consult with your SAP administrator or financial team to review the settings related to asset accounting and ensure that short positions are correctly classified and handled in the system.
  Use Correct Accounting Entries: Ensure that the accounting entries for short positions are correctly recorded. This may involve using different transaction codes or processes that are appropriate for short positions.
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on handling short positions and related transactions.
  
  Related Information:
  
  SAP Notes: Check SAP Notes for any known issues or patches related to this error message. SAP frequently updates its system with notes that address specific errors.
  Training and Documentation: Ensure that users involved in financial transactions are trained on the proper handling of short positions and the limitations of amortization in SAP.
  Support: If the issue persists, consider reaching out to SAP support for assistance, providing them with details of the error and the context in which it occurs.
  
  By addressing the cause of the error and following the suggested solutions, you should be able to resolve the VAL306 error in SAP.