What is 'initial recognition' in SAP FS-BA-PM-SFA - Smart Accounting for Financial Instruments?

initial recognition - Overview

• Component: FS-BA-PM-SFA

• Component Name: Smart Accounting for Financial Instruments

• Description: The first time that a contract or partial contract is recognized on the balance sheet. &EXAMPLE& For insurance contracts, the recognition of the best estimate cash flow BECF at contract inception in the Capture process step is an example of initial recognition.

initial recognition - Details

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  Key Concepts: 
  Initial recognition is a process in SAP FS-BA-PM-SFA Smart Accounting for Financial Instruments that allows users to recognize financial instruments at the time of their initial issuance. This process is used to record the initial value of the instrument and to track any changes in its value over time. 
  
  How to use it: 
  To use initial recognition, users must first enter the details of the financial instrument into the system. This includes information such as the type of instrument, its face value, and any associated fees or costs. Once this information is entered, users can then enter the initial value of the instrument and track any changes in its value over time. 
  
  Tips & Tricks: 
  When entering the initial value of a financial instrument, it is important to ensure that all associated fees and costs are taken into account. This will ensure that the initial value is accurately recorded and tracked over time. 
  
  Related Information: 
  Initial recognition is just one part of SAP FS-BA-PM-SFA Smart Accounting for Financial Instruments. Other features include portfolio management, risk management, and reporting capabilities.