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syedusama05
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1.Introduction Security Account and Class:

In SAP Treasury and Risk Management (TRM), a security account serves as a record-keeping tool for the financial instruments a company owns, including stocks, bonds, and other securities. It plays a critical role in logging transactions and maintaining precise records, ensuring that the company's investment holdings are accurately tracked and managed. This ensures that the portfolio's details are correctly documented and reported. 

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2.Security Class:

In SAP Treasury and Risk Management (TRM), an ID number in a security transaction is a distinct identifier given to each transaction involving securities like stocks, bonds, and other financial instruments. This ID number plays several key roles:

  • Distinct Identification: It uniquely identifies each transaction, ensuring no two transactions are confused.
  • Monitoring: It enables thorough tracking and monitoring of transactions throughout their entire process.
  • Audit Trail: It provides a transparent audit trail, aiding in compliance with regulatory standards and internal controls.
  • Reference Point: It acts as a reference, allowing users to quickly locate and review specific transactions.

The use of ID numbers in security transactions in SAP TRM helps maintain precise records and efficient management of the company's investment operations.

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In above screen ID created "ID190"

Class Important Details:

Security Index :

Secondary Index Class Data" involves multiple details which assist in the accurate categorization and management of financial instruments. Particularly for securities' identification numbers, this data provides extra layers of classification, increasing the system's ability to follow and report on these investments.

Examples include:

  • Industry Sector
  • Geographical Region
  • Credit Rating
  • Maturity Date

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Identifying whether a stock is common or preferred when creating an ID number in SAP TRM guarantees accurate categorization, detailed reporting, proper valuation, and robust risk management. This distinction supports regulatory adherence, facilitates informed investment choices, and helps maintain a clear and organized investment portfolio

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In above screen 'BP' is 12011 partner role 'issuer' who is the issuer of shares. 

Assignment of exchange is also important that in which exchange you are dealing i.e. in Pakistan we have PSX

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3.Scenario

Note: We buy 500 shares on price Rs. 10 and 500 on Rs. 15 and will sell 600 shares through FIFO method and will follow the concept of derived business transaction of profit buy/sell case with dividend on remaining shares. (In standard weighted avg. method will be followed).

In our scenario we will cater the simple example of Buy and Sell of Shares for which we will create the deal with customize product type 'Z01' .

We are preparing to initiate a financial transaction by selecting the stock's product type 'Z01' and specifying the purchase transaction type '100' 

Partner from which we are buying 'BP' # 100161'

Class ID " ID190" which we created above while creating class. 

 

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Through inputting the security account, valuation class, calculation date, and payment date, we proceed with executing the transaction and specifying the quantity of stocks to be purchased

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All the relevant information for the understanding has been inserted in the above screen further entries will be input in the coming screens , find below

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Payments detail has been entered in the screen for the payment made against to shares in above screen. 

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While saving the above transaction system is asking to create the positions through position indicator which is set as  manual from the configuration setting in SPRO. It can also be manual. 

Position indicator details:

The position indicator for stocks and other product types is essential for distinguishing between various holdings based on specific criteria. This includes:

  1. Portfolio or Account Differentiation
  2. Strategy or Investment Mandate Identification
  3. Transaction Type Differentiation
     

    Further more , the position indicator is crucial for organizing and managing different positions within SAP TRM. It ensures precise monitoring and accurate reporting of financial holdings across various criteria.

Please find the screen shot created in result of saving the screen of buying 100 shares

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After this saving the screen transaction has been saved 

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Now we will buy 500 shares on Rs. 15 each. to execute the transaction we repeat  the 1st step again. 

 

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Document Created 1000000282.

To Execute further these above transaction we have to settle it in the same manner as all the transactions of TRM is posted. 

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After settling these transaction we have to post buying of share in TB. 

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Accounting Entries

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Now we run the report to review the position 'TPM13'

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 Position flows.

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Next, we will proceed to sell the stocks that were purchased in the previous transaction

 

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The system permits selling stocks using FIFO, LIFO, or weighted average methods, requiring distinct configuration settings

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Save the sell transaction. 

Now it can be seen in position report again

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To check the profit on selling the share we will execute the derive business transaction report 'TPM18' . 

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After the fill the selection parameters, system will fix the transactions.

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Accounting entry

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Now we will execute again to view the actual position flows 

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In the screen mentioned here we can see the complete details of our transactions where profit are also recorded with dividend amount. 

Please note we have 400 units are remaining in our hands rest we sell with FIFO method. 

Below we can check the manual dividend entry in FWZZ 'Class master data' 5 per share. 

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To pay manual dividend we execute the transaction 'FWZE'

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4.Conclusion:

In short, strong security in SAP TRM is vital for protecting financial data and meeting legal requirements.

 

 

 

 
 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

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