What is dilution discount in SAP FS-TXS - Funding Management?

SAP Term: dilution discount

• Component: FS-TXS

• Component Name: Funding Management

• Description: Percentage retained for the dilution risk goodwill, returns, and so on from the nominal value of the receivables sold.

Smart SAP Assistant

• Key Concepts: 
  Dilution discount is a concept used in the FS-TXS Funding Management component of SAP. It is a method of calculating the cost of a loan or other financial instrument based on the amount of dilution that would occur if the loan were to be repaid. The dilution discount is calculated by taking into account the amount of dilution that would occur if the loan were to be repaid, and then subtracting that amount from the total cost of the loan. 
  
  How to use it: 
  In order to use the dilution discount, you must first calculate the amount of dilution that would occur if the loan were to be repaid. This can be done by taking into account the amount of dilution that would occur if the loan were to be repaid, and then subtracting that amount from the total cost of the loan. Once this calculation has been made, you can then use this information to determine the cost of the loan or other financial instrument. 
  
  Tips & Tricks: 
  When calculating the dilution discount, it is important to take into account any additional costs associated with repaying the loan, such as interest payments or fees. Additionally, it is important to consider any potential tax implications associated with repaying the loan. 
  
  Related Information: 
  The concept of dilution discount is closely related to other concepts such as debt-to-equity ratio and capital structure. Additionally, it is important to understand how different types of loans and financial instruments can affect a company’s capital structure and overall financial health.