Re: FX Spot -- Cash Settlement Issue

Hi Amit,

My guess on this topic:

Since the transaction Nominal Amount is in Euros(selling euros, so position is valued in euros), and exercising the cash settlement in USD, when running TBB1 a Currency SWAP between Position Currency and Payment Currency, must be delivered.

This could be the reason that automatically, account symbol 9.1.4 appears running TBB1.

Your example:

Value Rate: 1,1 EUR/USD

Nominal: 2.000.000 EUR (SELL)

              2.200.000 USD (BUY)

Cash Settlement:

Rate: 1,02041 EUR/USD

Calculation:

1. 2.200.000 USD/1,02041= 2.155.996,192069 EUR
2. 2.155.996,192069 EUR - 2.000.000 EUR= 155.996,192069 EUR( Profit in Euros)
3. 155.996,192069 EUR X 1,02041= 159.180 USD(Profit in USD)

Since Account Symbol 9.1.4 (and its GL account assigned) are debited and credited at the same time with the same amount, the account is cleared and thus, your final posting is correct:

40 Debit Account Symbol 3  159.180 USD

50 Credit Account Symbol 1 159.180 USD