What is collateral agreement amount for political risk in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: collateral agreement amount for political risk

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Value of collateral used to mitigate political risk. Political risk inclused restrictions on payments in a country. Collateral agreement amounts for political risk can be used in the calculation of attributable amounts for counterparty risk and country risk.

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• Key Concepts: 
  Collateral agreement amount for political risk is a component of the Credit Risk Management module in SAP. It is used to define the maximum amount of credit that can be extended to a customer based on the political risk associated with the customer’s country. This amount is determined by analyzing the customer’s creditworthiness and the political risk associated with their country. 
  
  How to use it: 
  The collateral agreement amount for political risk can be set up in SAP by entering the customer’s creditworthiness and the political risk associated with their country. This information can be found in the Credit Risk Management module. Once this information is entered, SAP will calculate the maximum amount of credit that can be extended to the customer based on this information. 
  
  Tips & Tricks: 
  It is important to keep in mind that the collateral agreement amount for political risk should be set up before any credit is extended to a customer. This will ensure that the customer does not exceed their maximum credit limit and that they are not exposed to any unnecessary risks. 
  
  Related Information: 
  The collateral agreement amount for political risk is just one component of Credit Risk Management in SAP. Other components include credit limit, credit exposure, and credit rating. All of these components work together to ensure that customers are not exposed to any unnecessary risks when extending credit.