SAP System ______________________________________________________________

1 Exposure Management 2.0: Commodity Exposures with Fixed Prices
Description The Exposure Management 2.0 provides the new commodity exposure approach categories 2 Fixed Prices, 3 Floating Prices, and 4 Fixed and Floating Prices. Raw exposure and exposure positions of these new categories are handled different in Exposure Management 2.0 then the raw exposure and exposure positions of the commodity exposure approach category 0 Without Prices. In this test case the process for commodity exposures with fix prices is described. Preparation Customizing In the Customizing of the Exposure Management 2.0 under Define Exposure Activity Types create two new exposure activity types, which both have commodity exposure approach category Fixed Prices. One of them should have the setting automatic release and one manual release. Under Define Exposure Positions create an exposure position type with the aggregation indicator and one without. Under Define Exposure Fields Derivation Strategy define rules to derive the exposure position type for the sub raw exposures. Note: You could use one of the free attributes to derive the exposure position type. Define the name and the value for the field in the Customizing under Exposure Management 2.0 -> Settings for Free Attributes -> Define Headings, Values, and Texts for Short Attributes and then create a rule in this customizing to derive the exposure position type depending on the value of this field. Activate automatic integration of exposure positions in the Risk Analyzer

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Master Data Create Commodity master data (transaction FCZZ)

Market Data Execution 1. Create several raw exposure (transaction FTREX1) with the created exposure activity types. After entering the header data for the raw exposures like the transaction type, the accounting code or some free attributes, you enter the line item data. For commodity exposures with fix prices you also have to enter the exposure amount and currency in the line item. Save your entries. When you saved your entries, then the system creates sub raw exposures from the line items. For each line item the system creates sub raw exposures for the FX risk (when the exposure currency is not the target currency) and also for the Commodity price risk. Enter Commodity prices Enter exchange rates

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SAP AG 1

The exposure position data are the sub raw exposure data plus the exposure position type and all other derived fields (defined in Customizing). Check that sub raw exposures for FX risk has been created. call the Price Info and check the values. Check Check the different versions of the raw exposures (transaction FTREX1). After the release of the raw exposure in the first step the exposure position type and all other additional field values are derived. Then initiate the release. 6. If necessary initiate the release. 7.SAP System ______________________________________________________________ When you have defined automatic release for the raw exposure. In the second step the exposure positions are created according to the differentiation criteria chosen for the different exposure position types. Call function Exposure Positions Overview (transaction FTREX12) and check the exposure positions. Check if the exposure position have been updated accordingly. ______________________________________________________________ SAP AG 2 . the system automatically initiates the release. When you have changed the transaction category (= differentiation criteria for exposure positions). 4. check whether the 'old' expsoure position has been reduced to zero and the a new exposure position has been created. Check that exposure positions without the aggregation flag on exposure position type level are not aggregated and that the exposure positions with allowed aggregation are aggregated. Check the line items of the raw exposures with manual release. 5. Change the raw exposures (for example the quantity and the amount or the transaction category) and save the changes. With the release of the raw exposure the system creates exposure positions from the sub raw exposures. 3.

Activate automatic integration of exposure positions in the Risk Analyzer - - Master Data Create Commodity master data (transaction FCZZ) Create Commodity Curves (transaction TANCCMASTER) Market Data Execution 1. Define the name and the value for the field in the Customizing under Exposure Management 2. Enter Commodity prices Enter exchange rates ______________________________________________________________ SAP AG 3 . In this test case the process for Commodity-Exposures with floating prices is described. One of them should have the setting automatic release and one manual release.SAP System ______________________________________________________________ 2 Exposure Management 2.0: Commodity Exposures with Floating Prices Description The Exposure Management 2. After entering the header data for the raw exposures like the transaction type.0 under Define Exposure Activity Types. Under Define Exposure Positions create an exposure position type with the aggregation indicator and one without. you enter the line item data. Values. For commodity exposures with floating prices you enter the price condition in the following way: a) Mark the line item and call Floating Prices. Raw exposures and exposure positions of these new categories are handled different in Exposure Management 2. Note: You could use one of the free attributes to derive the exposure position type. the accounting code or some free attributes. Create several raw exposure (transaction FTREX1) with the created exposure activity types. Preparation Customizing Create two new exposure activity types in the Customizing of the Exposure Management 2.0 provides the new commodity exposure approach categories 2 Fixed Prices.0 then the raw exposure and exposure positions of the commodity exposure approach category 0 Without Prices. Under Define Exposure Fields Derivation Strategy define rules to derive the exposure position type for the sub raw exposures.0 -> Settings for Free Attributes -> Define Headings. 3 Floating Prices. which both have commodity exposure approach category Floating Prices. and Texts for Short Attributes and then create a rule in this customizing to derive the exposure position type depending on the value of this field. and 4 Fixed and Floating Prices.

Check the line items of the raw exposures with manual release Mark the line items. 3. Quotation Source. call the Floating Prices and check the values. - Commodity Price Risk For every price line item the system creates a seperate sub raw exposure according to the price weighting. When you have changed the transaction category (= differentiation criteria for exposure positions). the system automatically initiates the release. Then initiate the release. commodity. Check if the exposure position have been updated accordingly. Check that the Fixed/Floating indicator was automatically set to Floating. Check that sub raw exposures for FX risk has been created. The splitting logic works as follows: For each line item the system creates sub raw exposures for the FX risk (when the exposure currency is not the target currency) and also for the Commodity price risk. In the Customizing of the exposure activity type you have chosen the commodity price determination strategy. Enter the price details pricing date. 9. Quotation Type and Price Weighting. Check ______________________________________________________________ SAP AG 4 . Markt the line item and call the Price Info and check the values. The system creates sub raw exposures from the line items.SAP System ______________________________________________________________ b) c) d) 2. Enter the fixing price in the floating price details and set the fixing status to Fixed. When you have chosen the stategies Update with Current Commodity Prices or Update with Commodity Prices According to Commodity Curve you can use the function Calculate Prices while maintaining the line items. After the release of the raw exposure in the first step the exposure position type and all other additional field values are derived. Check if the exposure positions have been updated accordingly. 5. In the second step the exposure positions are created according to the differentiation criteria chosen for the different exposure position types. check whether the 'old' exposure position has been reduced to zero and the new exposure position has been created. FX Risk For floating priced line items a preliminary price is needed to create the sub raw exposure for the FX risk. When you have defined automatic release for the raw exposure. 6. 4. 7. Choose Enter. Save your entries. 8. The exposure position data are the sub raw exposure data plus the exposure position type and all other derived fields (defined in Customizing). Call function Exposure Positions Overview (transaction FTREX12) and check the exposure positions. With the release of the raw exposure the system creates exposure positions from the sub raw exposures. Fix the Commodity Price at fixing date. If necessary initiate the release. Check the sub raw exposures for the commodity risk. Change the raw exposures (for example the quantity and the amount or the transaction category) and save the changes.

Check that exposure positions without the aggregation flag on exposure position type level are not aggregated and that the exposure positions with allowed aggregation are aggregated. ______________________________________________________________ SAP AG 5 .SAP System ______________________________________________________________ - Check the different versions of the raw exposures (transaction FTREX1).

Activate Business Function TRM.0: Automatic Integration with Logistics Description You will find this test case for the automatic integration of commodity exposure from the Logistics into the Exposure Mangement 2.0. You have implemented the Financial Risk Management for Commodities of the TRM and set up the Exposure Management 2. See also the chapter: Overview of Configuration and Customizing Activities - Execution Create a logistics document with integration relevant pricing conditions.. Financial Risk Management for Commodities 2 (reversible) (TRM_COMM_RM_2). You have created all needed Commodities in the Financial Risk Management for Commodities of the TRM under Master Data -> Commodity (transaction FCZZ) Enter the needed market data: Commodity prices Commodity forward rates Prices of commodity futures Exchange rates . You use SAP logistics applications in connection with the sale or purchase of Commodities. You have defined the product types you need to hedge the commodity price risks and FX risks of your Commodity transactions. floating or fix and floating. Special Settings in Customizing for the Automatic Integration Under Financial Supply Chain Management ->Treasury and Risk Management -> Transaction Manager -> General Settings -> Exposure Management 2.. In the Customizing under Logistics-General -> Treasury and Risk Management Integration -> Assign Commodity IDs to Condition Types. ______________________________________________________________ SAP AG 6 .0 also at the Business Function Logistics-Treasury Integration (LOG_TRM_INT_1) [Logistics Feed into Treasury and Risk Management (TRM)] Preparation Activate the Business Function Logistics-Treasury Integration (LOG_TRM_INT_1).0 -> Integration with Logistics -> Assign Exposure Activity Type and Exposure Category to Incoming Exposures.SAP System ______________________________________________________________ 3 Exposure Management 2. You have activated the integration of the exposure positions with the Risk Analyzer. You have defined the needed exposure activity types using the commodity exposure approach categories fix.

Check the corresponding exposure positions Calculate the fair value of the exposure positions. goods receipt and delivery). ______________________________________________________________ SAP AG 7 . purchase order.SAP System ______________________________________________________________ Check - Change a logistics document with integration relevant pricing conditions. Check that raw exposures are sent to SAP Treasury and Risk Management when you create or change relevant logistics documents (sales order. Further notes For more information see SAP Library -> ERP Central Components -> Financials -> Financial Supply Chain Management -> Treasury and Risk Management -> Transaction Manager -> General Information about the Transaction Manager -> Integration of Logistics with the Treasury and Risk Management. Check that the raw exposure status is updated when you post billing document of invoice verification document.

Execution Results Database 1. c) 2. For this reason the Market Risk Analyzer provides within the Results Database a new key figure category for commodity-quantities and you can see the quantities of the commodities in the reports for NPV Analysis (transaction JBRX) and in the Key Figure Analysis (transaction AISGENKF). Maintain the Commodity master data (transation FCZZ). which will calculate the SRP ______________________________________________________________ SAP AG 8 . the yield curve types and others. Save your entries. Fill the Quantity Key Figure Run the function Determine Single Records (transaction RAEP1). Commodity Forwards.SAP System ______________________________________________________________ 4 MRA: Quantity of Commodities as Key Figure in RDB and Online Reports Description In the reporting of your commodity-related financial instruments you would like to see the quantity information of the underlying commodity along with the fair value of the instruments. Commodity Options or a Commodity Forward Option using function Create Financial Transactions (transaction FTR_CREATE). Commodity Swaps. create the final result procedure and the assign the quantity key figure. Maintain the market data for the relevant commodities.Quantity Key Figure for Commodity Instruments. Maintain the master data for Commodity Futures (transaction FWZZ). With the function Edit Financial Transaction (transaction FTR_EDIT) you can later in change the financial transactions. Followed by the description in the area Quantity Key Figure for Commodity Instruments and fill the fields Quantity Calculation Method and the Display Unit of Measure. yields and exchange rates Create various commodity-related financial transactions like the purchase of a Commodity Future. Enter the filter. Maintain the basis settings for the Market Risk Analyzer like the evaluation type. On the following screen which displays the key figure category hierarchy choose the new category RAB03 . Create a single record procedure (transaction AFW ) Enter a name for the single record procedure (SRP). Choose Create. On the key figure maintenance screen enter the mandatory fields for the basic key figure category (abstract). Preparation Customizing for the commodity-related product types within the Transaction Manager. Fill the tab page Analysis Parameters (RM) within the financial transaction or via function Process Financial Object (transaction JBDO) so that the MRA selectors will select the financial transactions. Save your entries. Create Quantity Key Figure (transaction AFWKF_RA) Enter a name and choose create. Define Quantity Key Figure a) b) Define a Filter (transaction AFWFL) which will select the created financial transactions.

Check if you can see the newly introduced Quantity Calculation Method and the Display Unit of Measure columns in the key figures overview screen. Key Figure Analysis (Transaction AISGENKF) 1. On the tab page Control Data the new indicator Calculate Quantity Key Figure is available. Enter appropriate restrictions (tab page Characteristics) which fit to your financial transactions to make sure that they are processed. 2. Check the values for all financial transaction you have created ______________________________________________________________ SAP AG 9 . Choose Execute. Check the Key Figure Quantity and Unit of Measure at Single Record level. 6. When you choose the indicator. 2. b) NPV Analysis (Transaction JBRX) 1. 4. Whether the quantity on the transaction level is always the unit of measure given in the deal.SAP System ______________________________________________________________ result and store it in the Results Data Base 3. save your changes. Select the appropriate Quantity Calculation Logic and the Display Unit of Measure Logic in the key figure overview screen for the respective new key figure with the type quantity. 7. then the area Control for Quantity Key Figures appears where you choose the Quantity Calculation Method and the Display Unit of Measure. 4. 5. Call the Key Figure Analysis (transaction AISGENKF). Create layout using the function Define Initial Layout (transaction AIS_LAY_DEF) where you can specify the key figures to be reported. 3. Enter the mandatory fields and choose Define Report Layout on the tab page General Selections. Call NPV Analysis (transaction JBRX). Check the amounts and unit of measures for all financial transaction you have created. Check the detail protocol. 3. Choose Execute. Display the Calculation Results a) Execute the function Analyzer Information System (transaction AIS_STDREP) in order to display results from the result data base as per the selected defined layout. Enter appropriate restrictions on tab page Characteristics) which fit to your financial transactions. Check in the resulting results list: a) b) c) Whether in the list the columns to display the Quantity and the Unit of Measure are available. 8. Select line item for the respective layout ID and choose Key Figures folder in the dialog box.

TRM. Financial Risk Management for Commodities 2 .

Neither this document nor any part of it may be copied or reproduced in any form or by any means or translated into another language. All other products which are mentioned in this documentation are registered or not registered trademarks of their respective companies. The information contained in this document is subject to change without notice. . SAP is a registered trademark of SAP AG. All rights reserved. without the prior consent of SAP AG.______________________________________________________________ Copyright Copyright(c) 2011 SAP AG.

0: Commodity Exposures with Floating Prices 3 3 Exposure Management 2.0: Commodity Exposures with Fixed Prices 1 2 Exposure Management 2.0: Automatic Integration with Logistics 6 4 MRA: Quantity of Commodities as Key Figure in RDB and Online Reports 8 ______________________________________________________________ SAP AG iii .Release Notes Table of Contents SAP AG ______________________________________________________________ 1 Exposure Management 2.

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