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

SAP Term: gross exposure

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Volume-oriented attributable amount for primary business partners and guarantors that does not take into account the risk-reducing and risk- transferring effect of any provision of collateral. Exposure is calculated both in the primary transaction and in the collateral provision to the maximum amount. See also net exposure.

Smart SAP Assistant

• Key Concepts: 
  Gross exposure is a term used in the IS-B-RA-CL Default Risk and Limit System of SAP. It is the total amount of risk that a company is exposed to, including both current and potential future risks. This includes both direct and indirect risks, such as credit, market, liquidity, and operational risks. 
  
  How to use it: 
  Gross exposure can be used to measure the total amount of risk that a company is exposed to. This can be used to assess the overall risk profile of a company and help inform decisions about how much risk to take on. It can also be used to compare different companies and their risk profiles. 
  
  Tips & Tricks: 
  When calculating gross exposure, it is important to consider both direct and indirect risks. Direct risks are those that are directly related to the company’s activities, such as credit or market risks. Indirect risks are those that are not directly related to the company’s activities, such as liquidity or operational risks. 
  
  Related Information: 
  Gross exposure is closely related to net exposure, which is the total amount of risk that a company is exposed to after taking into account any hedging or other mitigating strategies. It is also related to capital adequacy ratios, which measure the amount of capital a company has relative to its risk profile.