What is unencumbered asset in SAP (FS-LRM - Liquidity and Risk Management)?

SAP Term: unencumbered asset

• Component: FS-LRM

• Component Name: Liquidity and Risk Management

• Description: Asset or property that is free from debt, and clear of any legal defect in its title and which, therefore, can be easily sold or mortgaged.

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• Key Concepts: 
  An unencumbered asset is an asset that is not subject to any legal claims or restrictions. In the context of SAP FS-LRM Liquidity and Risk Management, unencumbered assets are assets that can be used to cover short-term liquidity needs without having to worry about legal restrictions or claims. 
  
  How to use it: 
  In SAP FS-LRM Liquidity and Risk Management, unencumbered assets can be used to cover short-term liquidity needs. This can be done by setting up a liquidity plan that takes into account the available unencumbered assets and their expected returns. The liquidity plan should also consider the risk associated with the assets and the potential for losses. 
  
  Tips & Tricks: 
  When setting up a liquidity plan, it is important to consider the risk associated with the unencumbered assets. This includes assessing the potential for losses due to market fluctuations or other factors. Additionally, it is important to consider the expected returns of the assets and how they will affect the overall liquidity plan. 
  
  Related Information: 
  SAP FS-LRM Liquidity and Risk Management provides a comprehensive set of tools for managing liquidity and risk. These tools include liquidity planning, risk management, and asset management. Additionally, SAP FS-LRM provides a range of reports and analytics that can help organizations better understand their liquidity needs and risks.