Hedge Accounting for FX Option - Group Ledger US GAAP (3X4)

This process helps you to mitigate profit and loss volatility from the use of derivatives.

Currently, the scope item supports US GAAP as group ledger and covers Cash Flow Hedge using European Style FX Option as hedging instruments.

The functionality helps you to automate labor-intensive processes, such as calculating net open exposure amount, creating hedging relationship for hedge item and hedge instrument, determining the key figures calculation (NPV, Intrinsic Value, Time Value), performing the valuation of FX transaction, checking classification, dealing with the dedesignation, and generating posting journal reports.

Key Process Steps Covered

Define hedging area based on hedging policy
Enrich, upload and release forecast and planning data
Determine net open exposure and make hedging decision
Execute FX transactions
Prepare and release designation
Determine NPV, execute valuation and classification at period end
Dedesignate and reclassify at contract close
Postings

Benefits

Provide an overview of exposure, hedges, and net open exposure amount
Reduce manual operation, such as hedge relationship designation, and dedesignation
Automate financial postings in accordance with US GAAP hedge accounting
Make better operational and strategic decisions using the comprehensive reporting and analysis tools

Additional Information

This scope item requires an additional SAP S/4HANA Cloud license

This scope item is excluded from the default activation

All starter, demo, and trial systems are by default setup with group ledger IFRS. This scope item is therefore excluded. Customers can decide to use this scope item in the Q- and P-system based on the selected scope bundle.

Where is Hedge Accounting for FX Option - Group Ledger US GAAP(3X4) being used?

This Scope item is used in the following way:

As a support function of Treasury Management within Finance Scope Item Group

Process flow of Hedge Accounting for FX Option - Group Ledger US GAAP (3X4)

Find below the process flow of the scope item Hedge Accounting for FX Option - Group Ledger US GAAP as it is defined for release s4hc-2111.

Download Process Flow of Best Practice scenario Hedge Accounting for FX Option - Group Ledger US GAAP (3X4) - S/4HANA Cloud

Ref: Finance of SAP S4HC-2111

Best Practices related to S/4HANA

Best Practices of SAP S/4HANA On Premise *1
Best Practices of SAP S/4HANA Cloud *2
Best Practices of SAP Analytics Cloud *2
Best Practices of Robotics Process Automation(RPA) with SAP Leonardo *2

*1) Yearly Updates are released per September of each year
*2) The Quarterly updates are released per Februari, May, August and November
Details of future releases can be found in the SAP Roadmap section of each product. Go to SAP Roadmap Product Finder.

Knowledge Center Scheer Nederland | The Process Experts Visit also the SAP Cloud ERP knowledge center of Scheer Netherlands. The following topics are covered:

Place comment