What is book value component in SAP FS-BA-PM-AFP - Accounting for Financial Products?

SAP Term: book value component

• Component: FS-BA-PM-AFP

• Component Name: Accounting for Financial Products

• Description: A partial value that contributes to the book value of a financial position. &EXAMPLE& Risk provision, valuation remnants, hedge adjustment

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• Key Concepts: 
  Book value component is a term used in the SAP Financial Services – Bank Accounting – Portfolio Management – Accounting for Financial Products (FS-BA-PM-AFP) component. It is a value that is calculated based on the current market value of a financial product, such as a loan or an investment. The book value component is used to determine the amount of money that can be recovered from the sale of the financial product. 
  
  How to use it: 
  The book value component is used to calculate the amount of money that can be recovered from the sale of a financial product. This calculation is done by subtracting the current market value of the financial product from its original purchase price. The resulting number is the book value component. 
  
  Tips & Tricks: 
  When calculating the book value component, it is important to take into account any fees or costs associated with the sale of the financial product. These fees and costs should be subtracted from the current market value before calculating the book value component. 
  
  Related Information: 
  The book value component is closely related to other terms such as fair market value, net asset value, and liquidation value. It is important to understand how these terms are related in order to accurately calculate the book value component.