What is effective capital in SAP FS-AM - Account Management?

SAP Term: effective capital

• Component: FS-AM

• Component Name: Account Management

• Description: Total of all posted disbursements plus the posted capitalized interest, charges, and insurance minus the repayments made. The system calculates the repayments made as follows: It includes the turnovers "Repayment Payments" and "Special Payments" that have been posted for loans where the payment plan principle applies. It includes the repayment share from the "Installment Payments" and "Special Payments" turnovers that have been posted for loans where the incoming payment principle applies. To display the repayment share in the effective capital immediately when an installment is paid, the system simulates settlement when it calculates the effective capital. The system simulates settlement up to the date to which there are payment receipts. The settlement simulation comprises capitalization for interest, charges, and insurance. This takes place without payment simulation.

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• Key Concepts: 
  Effective capital is a term used in the SAP FS-AM Account Management component. It is the total amount of capital available to an organization for investment purposes. This includes both the current capital and any additional capital that can be raised through borrowing or other means. 
  
  How to use it: 
  In SAP FS-AM Account Management, effective capital is used to determine the amount of funds available for investment. This information can be used to make decisions about which investments to make and how much to invest in each one. It can also be used to assess the risk associated with each investment and determine the return on investment. 
  
  Tips & Tricks: 
  When calculating effective capital, it is important to consider all sources of capital, including both current and potential sources. This will ensure that the most accurate picture of available funds is obtained. Additionally, it is important to consider any potential risks associated with each investment before making a decision. 
  
  Related Information: 
  For more information on effective capital and how it is used in SAP FS-AM Account Management, please refer to the SAP Help documentation. Additionally, there are many online resources available that provide further information on this topic.