What is 'exposure amount' in SAP FS-BA-PM-CR - Credit Risk?

exposure amount - Overview

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: A comparable bond, for which the same conditions were agreed with the business partner, has to have an exposure amount in order for it to be possible to obtain equivalent results for the portfolio. Portfolio models usually require initial figures that are equivalent to the bond. The exposure amount for each single transaction is calculated from the exposure before CEQ adjusted by a CEQ factor.

exposure amount - Details

• 
  Key Concepts: 
  Exposure amount is a term used in the SAP Credit Risk Management (FS-BA-PM-CR) component. It is the total amount of credit risk that a company is exposed to when it extends credit to a customer. This amount is calculated by taking into account the customer’s creditworthiness, the amount of credit extended, and the terms of the agreement. 
  
  How to use it: 
  In SAP Credit Risk Management, exposure amount is used to determine the risk associated with extending credit to a customer. The system calculates the exposure amount based on the customer’s creditworthiness, the amount of credit extended, and the terms of the agreement. The system then uses this information to determine whether or not to extend credit to the customer. 
  
  Tips & Tricks: 
  When calculating exposure amount, it is important to consider all factors that could affect the risk associated with extending credit to a customer. This includes not only their creditworthiness but also the amount of credit extended and the terms of the agreement. 
  
  Related Information: 
  For more information on exposure amount and how it is used in SAP Credit Risk Management, please refer to SAP Help documentation.