What is future value in SAP FI-AF-ARO - Asset Retirement Obligation Management?

SAP Term: future value

• Component: FI-AF-ARO

• Component Name: Asset Retirement Obligation Management

• Description: The value that a given sum of money will have at a specified time in the future when compounded for a certain interest rate. The future value calculation is used to determine the settlement value of an asset retirement obligation. &Example& You have a settlement value of 10,000 euros, an original settlement date of January 1, 2011, a new settlement date of January 1, 2020, and a yearly inflation rate of 2%. The future value in this case is 11,040.80 euros on January 1, 2020.

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• Key Concepts: 
  Future value is a term used in SAP FI-AF-ARO Asset Retirement Obligation Management to refer to the estimated value of an asset at a future point in time. This value is used to calculate the present value of the asset, which is the amount that must be set aside today to cover the future costs associated with the asset. 
  
  How to use it: 
  In SAP FI-AF-ARO Asset Retirement Obligation Management, future value is used to calculate the present value of an asset. This present value is then used to determine the amount that must be set aside today in order to cover the future costs associated with the asset. 
  
  Tips & Tricks: 
  When calculating future value, it is important to consider factors such as inflation, market conditions, and other economic factors that may affect the value of the asset over time. 
  
  Related Information: 
  For more information on SAP FI-AF-ARO Asset Retirement Obligation Management, please refer to SAP's official documentation.