Purpose
This reference report completes the existing impairment solution sincethis report can help you to determine those positions that have asignificant and/or prolonged slump in prices (market value) below theacquisition value. Especially for equity capital instruments, asignificant and/or prolonged slump in prices is an indication that youneed to perform an impairment.
The following selection criteria is offered:
Selection criteria 1: Key date comparison
The market value is compared on the key date with the acquisition valueon the key date.
Selection criteria 2: Key date comparison with mean market values
The mean market values of the period are compared with the acquisitionvalue on the key date.
Selection criteria 3: Period comparison
The market values on every day of the period are compared with thecorresponding acquisition costs on the key date.
The reference report also makes it possible to transfer all or selectedpositions in the rate/price table for special security valuation.

Prerequisites
The security prices and exchange rates must be maintained with currentdata.

Features
You can examine the positions of the securities product group for apossible permanent impairment with this reference report.
Restriction

• The report is only offered for the securities product group.


• The report is only offered within parallel position management,
therefore not for operative position management and logically not in theoperative valuation area under R/3 Enterprise Add on FinServ 1.10.

• The report only compares the acquisition values with the market values
and not book values with the market values.

• The definition of the selection criteria implemented in the report
concentrates on the selection criteria for equity capital instruments.According to IAS 39, a significant and/or prolonged slump in prices is asign of a permanent impairment for equity capital instruments.

• If no security prices are defined on a key date in the market data
table, these positions are displayed in a log. Since no calendar rule isdefined, trading days, Sundays and holidays are not displayed. On theselection screen, you can enter a tolerance limit for the maximum age ofthe security prices. Provided that this limit is entered, the systemonly displays the positions with missing market prices that are abovethe tolerance limit on the key date.

Selection
The following selection criteria are available to select thepositions to be analyzed.


• Company code

Select the relevant company code. Company code 0001 is predefined butyou can overwrite this setting.

• Valuation area

You can restrict the selection of positions to one valuation area.
To use the function Assign Position Management Procedure, you must entera valuation area.
Since the product type and valuation class are valid as positioncriteria (differentiation terms) for all product types, you can usethese to select positions.

• Valuation class


• Product type

You can restrict the selection further using the following productgroup-dependent position criteria (differentiation terms). (In thisreport, only the position criteria of the securities product group canbe selected.):

• Portfolio


• Securities account group


• Securities account


• ID number

Taking time factors into consideration, we recommend that you use theposition restriction.
The following evaluation parameters are available:

• Selection period

Enter the period that you want to analyze. Note that you must enter aperiod start AND period end for the key date.
For example: Key date: 12/31/04

• Key date reference

Here you can differentiate whether you want to select your positionsaccording to position value date or according to posting date.

• Maximum age market price (days)

If no security prices are defined on a key date in the market datatable, these positions are displayed in a log. Since no calendar rule isdefined, trading days, Sundays and holidays are not displayed. On theselection screen, you can enter a tolerance limit for the maximum age ofthe security prices. Provided that this limit is entered, the systemonly displays the positions with missing market prices that are abovethe tolerance limit on the key date.
For the market price determination, the system only displays prices thatexist in the price table. There is no interpolation.

• Price type (optional)

You use this field to control which security price type is used todetermine the price. If this field is initial, the price type is usedthat is defined in the security valuation procedure of the selectedposition.

• with exchange rate (opt.)

You use this field to control with which exchange rate market prices aretranslated from quotation currency to position currency. If this fieldis initial, the exchange rate calculation indicator is used that isdefined in the company code additional data.
The exchange rate type is always taken from the foreign exchangevaluation procedure for the translation of market prices from positioncurrency to valuation currency.
Mean market values in position currency are not translated intovaluation currency.
Selection criteria
General Information
The selection criteria enable you to analyze your positions forpermanent impairment because of a significant and/or prolonged priceloss. You can perform various analyses here: for a period or a date.
The system checks on each date how the market value is reacting incomparison to the respective acquisition value of the position. If amarket value is not available on one day - provided that no tolerancelimit has been entered in the selection screen or the date is outsidethe tolerance limit - information is displayed in the log. The reportonly works with the days that actually exist in the market price table.There is no interpolation or an assumption of a market value equal tozero.
Price loss is expressed as the relationship between market values andacquisition value (limit).

• Selection criteria: Key date comparison:

This selection criteria checks how the market value in position currencyon the key date reacts in relation to the acquisition value in positioncurrency on the key date. If the market value is in a quotation currencythat is not equal to the position currency, the system uses the ratetype M (standard translation at average rate) for currency translation.This is only the case if this parameter is not overwritten by entries onthe selection screen.

• Selection criteria: Key date comparison market values mean:

This selection criteria checks whether the average market value is belowone of the limits you defined in relation to the acquisition value inposition currency on the key date. If the market value is in a quotationcurrency that is not equal to the position currency, the system uses therate type M (standard translation at average rate) for currencytranslation. This is only the case if this parameter is not overwrittenby entries on the selection screen.

• Selection criteria: Period comparison:

This selection criteria checks whether the market value in positioncurrency is below one of the limits you defined in relation to theacquisition value in position currency not only on the key date butpermanently during the whole period. Only days are compared for whichmarket values exist. Days for which no market values exist are notinterpolated nor given the value zero. If the market value is in aquotation currency that is not equal to the position currency, thesystem uses the rate type M (standard translation at average rate) forcurrency translation. This is only the case if this parameter is notoverwritten by entries on the selection screen.

Output
In addition to the standard functions in the reporting area, there isalso the function for transfer for impairment. This function helps youto save the selected positions in the table for special securityvaluation (transaction TPM73).