What is counterparty credit risk method in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: counterparty credit risk method

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Combines the following methods for counterparty risk: mark-to-market method standardized method internal model method

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• Key Concepts: 
  Counterparty credit risk method is a component of the Credit Risk Management (FS-BA-PM-CR) module in SAP. It is used to assess the creditworthiness of counterparties, such as customers, suppliers, and other business partners. The method uses a variety of factors, such as financial statements, credit ratings, and other data points, to determine the risk associated with a particular counterparty. 
  
  How to use it: 
  The counterparty credit risk method can be used to assess the creditworthiness of counterparties in order to determine the risk associated with them. This information can then be used to make decisions about whether or not to enter into a business relationship with the counterparty. The method can also be used to monitor existing relationships and adjust credit limits accordingly. 
  
  Tips & Tricks: 
  When using the counterparty credit risk method, it is important to ensure that all relevant data points are taken into account. This includes financial statements, credit ratings, and other data points that may be relevant to the particular counterparty. Additionally, it is important to regularly monitor existing relationships and adjust credit limits accordingly. 
  
  Related Information: 
  The Credit Risk Management (FS-BA-PM-CR) module in SAP provides additional features related to counterparty credit risk management. These features include automated monitoring of counterparties, automated credit limit adjustments, and reporting capabilities. Additionally, SAP provides a range of services and support related to Credit Risk Management.