What is expectation reserve in SAP FS-CM - Claims Management?

SAP Term: expectation reserve

• Component: FS-CM

• Component Name: Claims Management

• Description: Reserves that come from subrogation/recovery, salvage, or loss allocation agreements. By their nature, they are receivables and not payables.

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• Key Concepts: 
  Expectation reserve is a financial reserve created in the SAP FS-CM Claims Management component to cover expected future losses. It is used to provide a buffer against potential losses that may arise from claims or other liabilities. The expectation reserve is calculated based on historical data and current trends in the industry. 
  
  How to use it: 
  The expectation reserve can be used to cover expected future losses in the SAP FS-CM Claims Management component. It is calculated based on historical data and current trends in the industry. The expectation reserve can be adjusted as needed to ensure that it is sufficient to cover potential losses. 
  
  Tips & Tricks: 
  It is important to regularly review and adjust the expectation reserve to ensure that it is sufficient to cover potential losses. Additionally, it is important to monitor industry trends and adjust the expectation reserve accordingly. 
  
  Related Information: 
  The expectation reserve is related to other financial reserves such as the provision for doubtful accounts and the allowance for bad debts. These reserves are used to cover potential losses from accounts receivable, bad debts, and other liabilities.