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

SAP Term: residual valuation

• Component: FS-BA-PM-AFP

• Component Name: Accounting for Financial Products

• Description: Valuation of a part of a financial instrument using a calculation of the difference between the total value of the financial instrument and the values of all the other parts the rest of the instrument. This valuation is used when the total value of the financial instrument is easy to calculate, for example, from market rates.

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• Key Concepts: 
  Residual valuation is a method used in the Accounting for Financial Products (AFP) component of SAP's Financial Services Business Application (FS-BA-PM). It is used to determine the value of a financial product at the end of its life cycle. This value is known as the residual value. 
  
  How to use it: 
  In SAP, residual valuation is used to calculate the residual value of a financial product. This is done by taking into account the current market value of the product, as well as any expected future cash flows associated with it. The resulting value is then used to determine the amount of money that can be recovered from the product at the end of its life cycle. 
  
  Tips & Tricks: 
  When using residual valuation in SAP, it is important to ensure that all relevant data is taken into account. This includes any expected future cash flows associated with the product, as well as any changes in market conditions that may affect its value. Additionally, it is important to ensure that all calculations are accurate and up-to-date. 
  
  Related Information: 
  For more information on residual valuation in SAP, please refer to the official SAP documentation on the topic. Additionally, there are many online resources available that provide further information and guidance on how to use this feature in SAP.