What is available collateral value as prior charge in SAP FS-CMS - Collateral Management System?

SAP Term: available collateral value as prior charge

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: The value of a collateral agreement to be used in the calculation, if the collateral agreement is to be considered as a prior charge. Equation: Available collateral value = Nominal value of the collateral agreement + possible additional charge - possible deductions. Example Capitalized land charge interest. A reduction to the current loan proceeds drawdown of collateralized receivables in case of external collateral agreements, is a possible deduction.

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• Key Concepts: 
  Available collateral value as prior charge is a feature of the SAP FS-CMS Collateral Management System. It allows users to set a certain amount of collateral value as a prior charge, which is then deducted from the total collateral value when calculating the available collateral value. This feature helps to ensure that the available collateral value is always sufficient to cover any potential losses. 
  
  How to use it: 
  In order to use this feature, users must first set the prior charge amount in the system. This can be done by navigating to the “Collateral Management” tab in the SAP FS-CMS system and selecting “Set Prior Charge”. From there, users can enter the desired prior charge amount and save their changes. 
  
  Tips & Tricks: 
  When setting a prior charge, it is important to ensure that the amount is sufficient to cover any potential losses. Additionally, it is important to remember that any changes made to the prior charge will affect the available collateral value. 
  
  Related Information: 
  For more information on available collateral value as prior charge, please refer to the SAP FS-CMS Collateral Management System documentation.