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

SAP Term: fair value

• Component: FS-BA-PM-AFP

• Component Name: Accounting for Financial Products

• Description: Value achievable on the market according to IAS. The system calculates fair value using the fair value server.

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• Key Concepts: 
  Fair value is an accounting term used to describe the estimated current market value of a financial instrument or asset. It is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In SAP, fair value is used in the FS-BA-PM-AFP Accounting for Financial Products component. 
  
  How to use it: 
  In SAP, fair value is used to measure the value of financial instruments and assets. This measurement is used to determine the amount of gain or loss that should be recognized in the financial statements. The fair value of a financial instrument or asset is determined by taking into account factors such as market conditions, liquidity, and other relevant factors. 
  
  Tips & Tricks: 
  When determining the fair value of a financial instrument or asset, it is important to consider all relevant factors and not just the current market price. Additionally, it is important to ensure that the fair value measurement is consistent with other measurements in the financial statements. 
  
  Related Information: 
  The International Financial Reporting Standards (IFRS) provide guidance on how to measure fair value in financial statements. Additionally, SAP provides guidance on how to use fair value in its FS-BA-PM-AFP Accounting for Financial Products component.