What is 'residual component' in SAP FS-BA-PM-AFP - Accounting for Financial Products?

residual component - Overview

• Component: FS-BA-PM-AFP

• Component Name: Accounting for Financial Products

• Description: Part of a financial product that is measured as a residual value.

residual component - Details

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  Key Concepts: 
  Residual component is a term used in the SAP FS-BA-PM-AFP Accounting for Financial Products module. It is a component of the accounting process that is used to calculate the residual value of a financial product. This value is calculated by subtracting the current market value of the product from its original purchase price. 
  
  How to use it: 
  The residual component can be used to determine the profitability of a financial product. It can also be used to assess the risk associated with a particular investment. The residual component can be calculated by subtracting the current market value of the product from its original purchase price. 
  
  Tips & Tricks: 
  When calculating the residual component, it is important to take into account any fees or costs associated with the purchase of the product. Additionally, it is important to consider any changes in market conditions that may affect the value of the product over time. 
  
  Related Information: 
  The residual component is closely related to other accounting concepts such as depreciation and amortization. It is also related to concepts such as risk management and portfolio management. Understanding these concepts can help investors make more informed decisions about their investments.