Notice: The SAP S/4HANA Cloud Community migration to the SAP Community will begin on Thursday January 28th at 7:00 p.m. CET – Sunday January 31st 7:00 p.m. CET. During this time the S/4HANA Cloud Community will be set to “read only”. Partners and SAP employees can continue to access the Expertise Services Community at sap.com/s4hc-expertise. New content and questions will be directed to our new SAP Community S/4HANA Cloud page.
Please be aware that due to planned technical maintenance, the Expertise Services Community will be unavailable from 13:00 GMT on Friday January 29th. The community will be operational again on February 1st 2021. Please plan your activities accordingly.
with your approved SAP customer or partner ID (S-User) to get access to all content. Please go to the About page to find out how to get an S-User.
with your approved SAP partner ID (S-User) or SAP User ID to get access to all content. Please go to the About page to find out how to get an S-User.
According to IFRS 9, all financial liabilities should be measured at amortised cost. That means, organizations should be able to provide an “expected loss” model that focuses on the risk. the earlier recognition of impairment losses on receivablesincluding trade receivables and even short-term receivables.
In S4HANA Cloud, we often have receivables from our business partners. To build the 'expected loss' model, we use the 'risk class' and 'age grid of the receivables'. with those, you could post the expected loss as an expense for the total amount of receivables.
Generally, we call it 'flat-rate value adjustment'. The system calculates the value adjustment of the open net value of the receivable at the valuation date and posts the reset value adjustment (for example on payment or when written off) on separate accounts (in accordance with IFRS 9).
Sample scenario for flat-rate value adjustment
Take this example scenario:
In March, we evaluated 1% of the receivables should be posted automatically as value adjustment.
In April, we need to reverse the previous 'expected loss' and evaluated 1.5% of receivables should be posted.
HOW to achieve?
1. SSCUI 102218 - Maintain Central Settings for Posting
Activated the flat-rate value adjustments as additional function.
2. SSCUI 102718 - Maintain Account Determination for Flat-Rate Value Adjustment
here you need to define the accounts to which the flat-rate value adjustments are to be posted. You must define an account for the expense of the value adjustments and a correction account for each combination of company code and receivables account.
3. (optional) SSCUI 102904 - Maintain Alternative Accounts for Resetting Individual Value Adjustments
4. SSCUI 102833 - Define Expected Credit Loss Rates
Here you could define and adjust the percentage rate for the flat-rate value adjustments, according to different risk class/aging increment and valid period.
above all, hope this useful function could make your life easier.