How To Fix VAL870 - Write-off to be posted is smaller than value in loss allowance

SAP Error Message - Details

• Message type: E = Error

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

• Message number: 870

• Message text: Write-off to be posted is smaller than value in loss allowance

What causes this issue?

The write-off amount that you want to post is less than the amount in
the loss allowance.
Sample:
There is -1000 EURO in the loss allowance.
After key date valuation, a new write-off for the amount -1500 EUR needs
to be posted, but this is not permitted.

System Response

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

How to fix this error?

Please calculate a delta amount with a write-off in <AB>TRPAV_WRO_LA_VAL
</> and in the impairment. Please make sure that this delta amount is
greater than the value in the current loss allowance.

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 VAL870 - Write-off to be posted is smaller than value in loss allowance ?

  The SAP error message VAL870 indicates that there is an issue with the write-off amount being smaller than the value in the loss allowance for a specific financial transaction. This typically occurs in the context of accounts receivable or asset management, where a company is trying to write off a portion of a receivable or asset that has been deemed uncollectible or impaired.
  Cause:
  
  
  Loss Allowance Configuration: The loss allowance (or provision for bad debts) has been set up with a value that exceeds the amount you are trying to write off. This can happen if the loss allowance was calculated based on historical data or estimates that are higher than the actual write-off amount.
  
  
  Incorrect Write-off Amount: The amount you are attempting to write off may not be sufficient to cover the loss allowance that has been established for that particular account or asset.
  
  
  Accounting Policies: Company policies or accounting standards may dictate that the write-off must at least match the loss allowance to ensure that financial statements accurately reflect the company's financial position.
  
  
  Solution:
  
  
  Adjust the Write-off Amount: Ensure that the write-off amount you are trying to post is equal to or greater than the loss allowance. You may need to increase the write-off amount to match the loss allowance.
  
  
  Review Loss Allowance: Check the loss allowance settings for the account or asset in question. If the loss allowance is too high, consider adjusting it based on a more accurate assessment of the collectibility of the receivable or the value of the asset.
  
  
  Consult Accounting Policies: Review your company's accounting policies regarding write-offs and loss allowances to ensure compliance. If necessary, consult with your finance or accounting team to determine the appropriate course of action.
  
  
  Transaction Review: Review the specific transaction that is causing the error. Ensure that all relevant data is accurate and that there are no discrepancies in the amounts recorded.
  
  
  SAP Configuration: If the issue persists, it may be necessary to review the SAP configuration settings related to loss allowances and write-offs. This may involve consulting with an SAP specialist or your IT department.
  
  
  Related Information:
  
  SAP Documentation: Refer to SAP's official documentation for detailed information on handling write-offs and loss allowances.
  Transaction Codes: Familiarize yourself with relevant transaction codes in SAP that pertain to write-offs and loss allowances, such as F-32 (Clear Customer), F-53 (Post Outgoing Payments), or F-90 (Asset Acquisition).
  User Forums: Consider checking SAP community forums or user groups for similar issues and solutions shared by other users.
  
  By addressing the underlying cause of the VAL870 error, you should be able to successfully post the write-off transaction.