What is onerousness status in SAP FS-BA-PM-SFA - Smart Accounting for Financial Instruments?

SAP Term: onerousness status

• Component: FS-BA-PM-SFA

• Component Name: Smart Accounting for Financial Instruments

• Description: The status of an insurance contact that indicates whether the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

Smart SAP Assistant

• Key Concepts: 
  Onerousness status is a term used in the SAP FS-BA-PM-SFA Smart Accounting for Financial Instruments component. It is a status assigned to a financial instrument that indicates whether it is onerous or not. An onerous financial instrument is one that has a negative value, meaning that its current market value is lower than its book value. 
  
  How to use it: 
  The onerousness status of a financial instrument can be determined by comparing its current market value to its book value. If the current market value is lower than the book value, then the instrument is considered onerous and the onerousness status should be set to “Yes”. If the current market value is equal to or higher than the book value, then the instrument is not considered onerous and the onerousness status should be set to “No”. 
  
  Tips & Tricks: 
  When determining the onerousness status of a financial instrument, it is important to consider any potential future changes in market conditions that could affect its value. For example, if a financial instrument has a current market value that is lower than its book value but there is potential for the market conditions to improve in the future, then it may be wise to set the onerousness status to “No”. 
  
  Related Information: 
  The onerousness status of a financial instrument can have an impact on how it is reported in financial statements. For example, if an instrument has an onerousness status of “Yes”, then it must be reported as a loss in the financial statements. Additionally, if an instrument has an onerousness status of “No”, then it must be reported as an asset in the financial statements.