What is coverage gap in SAP FS-CMS - Collateral Management System?

SAP Term: coverage gap

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: The unsecured part or amount of a receivable as result of the collateral distribution.

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• Key Concepts: 
  Coverage gap is a term used in the FS-CMS Collateral Management System (CMS) to describe the difference between the amount of collateral held by a counterparty and the amount of collateral required to cover their exposure. It is calculated by subtracting the amount of collateral held from the amount of collateral required. 
  
  How to use it: 
  The coverage gap can be used to identify potential risks associated with a counterparty’s exposure. If the coverage gap is negative, it indicates that the counterparty does not have enough collateral to cover their exposure and may need to provide additional collateral. If the coverage gap is positive, it indicates that the counterparty has more than enough collateral to cover their exposure and may be able to reduce their collateral holdings. 
  
  Tips & Tricks: 
  It is important to monitor the coverage gap on a regular basis in order to identify potential risks associated with a counterparty’s exposure. Additionally, it is important to ensure that the amount of collateral held by a counterparty is sufficient to cover their exposure at all times. 
  
  Related Information: 
  For more information on coverage gap and other terms related to FS-CMS Collateral Management System, please refer to SAP’s official documentation.