What is deferment of substitution in SAP FS-PM - Policy Management?

SAP Term: deferment of substitution

• Component: FS-PM

• Component Name: Policy Management

• Description: Indicates the deferment of the substitution phase of a contract. The execution of the Substitution time model function can be deferred in such a way that substitution does not take place at the contract start. Example: If a deferment of 24 months is set in the system, in the first 24 months of the contract term all premium elements are covered by the collection premium. Afterwards, one or more elements of the premium are covered by the fund assets.

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• Key Concepts: 
  Deferment of substitution is a feature in SAP FS-PM Policy Management that allows users to postpone the substitution of a policy until a later date. This feature is useful for situations where a policy needs to be replaced but the replacement cannot be done immediately. 
  
  How to use it: 
  To use the deferment of substitution feature, users must first create a new policy that will replace the existing policy. Then, they must select the “Deferment of Substitution” option in the policy management screen. This will allow them to specify a date when the new policy will take effect. 
  
  Tips & Tricks: 
  When using deferment of substitution, it is important to remember that the new policy will not take effect until the specified date. Therefore, it is important to plan ahead and make sure that the new policy is ready to go before the specified date. 
  
  Related Information: 
  For more information on deferment of substitution in SAP FS-PM Policy Management, please refer to the official SAP documentation.