Run Classification
Application component: Transaction Management
App type: SAP GUI
Scope items: Hedge Accounting for FX Forward - Group Ledger IFRS|Hedge Accounting for FX Swap - Group Ledger IFRS|Hedge Accounting for FX Option - Group Ledger IFRS
Description:  Classification is the last step of the valuation process for the designated subpositions. It splits the valuation result into the different position components, which reflect the effective and ineffective amounts of the designated components, the non-designated components, and the amortization. 
Key features:  During classification, the effective and ineffective amounts of the hedging reserve, the cost of hedging reserve, and the amortization are determined.   Overview of Classification   Determine the effective and ineffective amounts of the hedging reserve  For the hedge accounting rules of IFRS 9, a lower-of test is executed for the designated components of the hedging instrument and the hypothetical derivative.    For the hedge accounting rules of U.S. GAAP, the designated components of the hedging instruments are relevant for the hedging reserve.       Hedging Reserve   Determine the effective and ineffective amounts of the cost of hedging reserve The cost of hedging reserve is only relevant for hedge accounting rules for cash flow hedges with the hedged item category Planned Forecast.  IFRS 9 The calculation rule for the cost of hedging reserve is determined at the release of designation. The system compares the actual values and aligned values of the non-designated components and the result determines the calculation method for the hedging relationship.      Cost of Hedging Reserve (IFRS 9) To overwrite the calculation rules, you can set the Apply Critical Term Match attribute in the Customizing settings for the hedging profile. In this case, the aligned value check result at the release of designation is set to Actual Value = Aligned Value. Note In the hedging profile, you can set the Skip Valuation at Contract Date indicator if you want to prevent the posting of the first-day valuation result of the hedging instrument. When this indicator is set, the valuation is skipped during the release of hedging business transactions if the designation date is the same as the contract date.The elements and components are still calculated and stored in the market data container on the designation date. On the designation date, however, the values for the hedging instrument and the hypothetical derivative are assumed to be 0.Exception: For an FX option with a premium that has been activated, in classifications after the payment date of the premium, the calculated values for the elements and components are used as start values during classification (with the Run Classification app) and are not assumed to be 0.   U.S. GAAP The non-designated components of the hedging instrument are relevant for the cost of hedging reserve (= Actual Value).  Note In the hedging profile, you can set the Skip Valuation at Contract Date indicator if you want to prevent the posting of the first-day valuation result of the hedging instrument. When this indicator is set, the valuation is skipped during the release of hedging business transactions if the designation date is the same as the contract date.The elements and components are still calculated and stored in the market data container on the designation date. On the designation date, however, the values for the hedging instrument and the hypothetical derivative are assumed to be 0.Exception: For an FX option with a premium that has been activated, in classifications after the payment date of the premium, the calculated values for the elements and components are used as start values during classification (with the Run Classification app) and are not assumed to be 0.     Determine the effective and ineffective amounts of the amortization Amortization is relevant for cash flow hedges when U.S. GAAP is applied.  Hedging Instrument FX Forward The forward points (traded amount * swap rate at designation date) are amortized using straight-line amortization over the lifetime of the hedging instrument. This amortization is represented by the ELEM_FWD element of the hedging instrument. Example    Example for Hedge Accounting Rule 642   Hedging Instrument FX Option The option premium is amortized using straight-line amortization over the lifetime of the hedging instrument. This amortization is represented by the NPV and NPV_OTHER component of the hedging instrument. Example    Example of Hedge Accounting Rule 643     
Business roles: Treasury Accountant
Treasury Accountant : 
Makes postings in accounting to reflect treasury activities.