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Forex revaluation of principal plus capitlized interest net of w/h tax

Former Member
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Hi SAP Gurus,

In roll over of money market placements where interest is capitalized, capitalized interest is computed net of withholding tax. However, during foreign currency revaluation run, only the principal amount plus capitalized interest is valuated when it should be principal amount plus capitalized interest net of w/h tax. Any idea how to net off the interest with w/h tax in the forex valuation run of a contract roll over?

Thanks and regards,

Jidji GM

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Hi,

Is withholding tax generated as a derived flow.

Any case check the flow type configuration for the derived flow. In that the relevant for valuation check box has to be checked if you want to perform valuation for the tax component. However is it a general practice to perform valuation for the tax flow?

Regards,

Ravi

former_member534894
Participant
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Hi,

Agree with comments from Ravi... Please check whether the Check box " Relevant to Valuatn" for the flow type of the derived flow (With Holding Tax flow) is active

I also have the same question as Ravi... is it a practive to include tax flow in valuation..... ?

Thanks & Best Regards,

M. Naveen Kumar

Former Member
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Hi Ravi, Naveen,

Thanks...and to answer your question, yes as capitalized interest net of withholding tax is added to the principal emount at contract rollover. So during revaluation, the position value that consists of the original principal amount plus capitalized interest net of withholding tax should be revalued.

Anyway, I have solved this issue by means of setting the effect of update type (w/h tax) on the position components.

Regards,

Jidji GM

Answers (1)

Answers (1)

Former Member
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Hello Jidji,

Even i have the same requirement. Can you tell me wat Position category you used in the node set effect on pos componenets. Also have you ticked the check mark Flow relevant as position in the derived flows section. Kindly provide your inputs.

Regards,

Nikhil

Former Member
0 Kudos

Hi Nikhil,

For the derived flow that is the withholding tax, the flow type is 1905. In the flow type control data,, no need to tick on 'relevant to valuation'. Then in the derived flow section, under derivation procedure, you need to tick on the box 'RelPos' (relevant to position).

Then in Accounting > Settings for Position Management > Set the Effects of the Update Types on the Position Components, add new entries: Update type MM1905+ and MM1905- with position change category 1010 and 1011.

I hope this helps.

Regards,

Jidji GM