What is 'discounting of long-term assets and liabilities' in SAP FI-GL-GL - Basic Functions?

discounting of long-term assets and liabilities - Overview

• Component: FI-GL-GL

• Component Name: Basic Functions

• Description: Process of calculating the time value of the money of a long-term receivable. The system treats the long-term receivable as a loan that you give to your customer.

discounting of long-term assets and liabilities - Details

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  Key Concepts: 
  Discounting of long-term assets and liabilities is a process in SAP Financial Accounting (FI-GL-GL Basic Functions) that allows companies to adjust the value of their long-term assets and liabilities to reflect the current market value. This process is used to ensure that the company’s financial statements accurately reflect the current market value of its assets and liabilities. 
  
  How to use it: 
  In order to discount long-term assets and liabilities, companies must first determine the current market value of their assets and liabilities. This can be done by researching the current market prices of similar assets and liabilities. Once the current market value has been determined, companies can then adjust the value of their long-term assets and liabilities accordingly. 
  
  Tips & Tricks: 
  It is important to remember that discounting of long-term assets and liabilities should only be done when necessary. Companies should not discount their assets and liabilities simply for the sake of doing so, as this could lead to inaccurate financial statements. 
  
  Related Information: 
  For more information on discounting of long-term assets and liabilities, please refer to SAP’s Financial Accounting (FI-GL-GL Basic Functions) documentation.