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

SAP Term: netting group

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Grouping key that specifies al the transactions of a business partner that can be netted.

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• Key Concepts: 
  Netting groups are used in the IS-B-RA-CL Default Risk and Limit System to group together multiple exposures that can be netted against each other. This allows for a more efficient and accurate calculation of risk and limits. Netting groups can be created based on criteria such as customer, product, or currency. 
  
  How to use it: 
  Netting groups are created in the IS-B-RA-CL Default Risk and Limit System by specifying the criteria for the group. Once the netting group is created, exposures can be added to it. The system will then calculate the net exposure of the group, which is the sum of all exposures minus any offsetting exposures. 
  
  Tips & Tricks: 
  When creating a netting group, it is important to consider how the criteria will affect the net exposure calculation. For example, if a netting group is created based on customer, then any offsetting exposures between customers will not be taken into account. 
  
  Related Information: 
  The IS-B-RA-CL Default Risk and Limit System also allows for the creation of limit groups, which are similar to netting groups but are used to calculate limits instead of risk. Additionally, there are other SAP systems that use netting groups such as IS-B-RA-CR Credit Risk Management and IS-B-RA-CA Credit Analysis.