What is exposure in SAP IS-B-RA-CL - Default Risk and Limit System?

SAP Term: exposure

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Amount subject to default risk. No further assessment is made. The exposure therefore corresponds to the credit equivalent amount. The attributable amount can be calculated on the basis of the exposure.

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• Key Concepts: 
  Exposure is a term used in the IS-B-RA-CL Default Risk and Limit System to refer to the amount of risk a company is exposed to when it enters into a financial transaction. It is calculated by taking into account the amount of money involved in the transaction, the creditworthiness of the counterparty, and any other factors that could affect the outcome of the transaction. 
  
  How to use it: 
  The IS-B-RA-CL Default Risk and Limit System allows companies to set limits on their exposure to risk. This is done by setting a maximum amount of exposure that can be taken on for each transaction. The system also allows companies to monitor their exposure levels over time, so they can adjust their limits as needed. 
  
  Tips & Tricks: 
  When setting limits on exposure, it is important to consider not only the amount of money involved in each transaction, but also the creditworthiness of the counterparty. This will help ensure that the company is not taking on too much risk for any given transaction. 
  
  Related Information: 
  The IS-B-RA-CL Default Risk and Limit System is part of SAP's Risk Management Suite, which provides companies with tools to manage their risk exposure. Other components of this suite include Credit Risk Management, Counterparty Risk Management, and Market Risk Management.