What is 'LGD class' in SAP FS-BA-PM-CR - Credit Risk?

LGD class - Overview

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Classification for the loss given default.

LGD class - Details

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  Key Concepts: 
  LGD class is a component of the Credit Risk Management module in SAP. It stands for Loss Given Default and is used to measure the expected loss of a loan or credit facility in the event of default. It is calculated as a percentage of the total amount of the loan or credit facility. 
  
  How to use it: 
  LGD class is used to assess the risk associated with a loan or credit facility. It is calculated by taking into account factors such as the borrower’s creditworthiness, the type of collateral, and the terms of the loan or credit facility. The higher the LGD class, the higher the risk associated with the loan or credit facility. 
  
  Tips & Tricks: 
  When calculating LGD class, it is important to consider all relevant factors in order to accurately assess the risk associated with a loan or credit facility. Additionally, it is important to regularly review and update LGD classes in order to ensure that they remain accurate and up-to-date. 
  
  Related Information: 
  For more information on LGD class and Credit Risk Management in SAP, please refer to SAP’s official documentation on Credit Risk Management. Additionally, there are many online resources available that provide further information on LGD class and Credit Risk Management in SAP.