What is current value of funds rate in SAP PSM-FG - Functions for U.S. Federal Government?

SAP Term: current value of funds rate

• Component: PSM-FG

• Component Name: Functions for U.S. Federal Government

• Description: The interest rate to be used for comparison with the discount rate offered by a vendor, to determine whether or not it is worthwhile taking the vendor discount. The rate is set annually by the U.S. Treasury and is effective from January 1.

Smart SAP Assistant

• Key Concepts: 
  The Current Value of Funds Rate (CVFR) is a component of the U.S. Federal Government’s Public Sector Management (PSM) Financial Governance (FG) functions. It is a rate used to calculate the present value of future payments, and is used to determine the cost of borrowing money from the government. The CVFR is set by the U.S. Department of Treasury and is updated quarterly. 
  
  How to Use it: 
  The CVFR is used to calculate the present value of future payments, which is used to determine the cost of borrowing money from the government. The CVFR can be used to calculate the cost of borrowing money for a variety of purposes, such as purchasing equipment or supplies, or for financing projects. 
  
  Tips & Tricks: 
  When calculating the cost of borrowing money from the government, it is important to use the most up-to-date CVFR rate in order to get an accurate calculation. The CVFR rate is updated quarterly, so it is important to check for updates regularly. 
  
  Related Information: 
  For more information on the Current Value of Funds Rate and other PSM-FG functions, please visit the U.S. Department of Treasury website at https://www.treasury.gov/resource-center/faqs/Borrowing/Pages/default.aspx