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Re: Profit and loss from currency trading

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Ahmed,

 

This is how the Forex Product type 60A (Product category 600) works.

Let us take an example. Suppose you are Buying CAD (Canadian Dollars) 10Million and Selling USD.

The  exchange rate contracted with the counter-party is say 1 USD = 1.1 CAD which means you will have to pay 9,090,909.09 USD on settlement day to get 10Million CAD.

 

On settlement date assume that the M rate in SAP is 1 USD = 1.20 CAD.

Since the USD has become costlier byy 0.10 CAD you will end up paying 757,575.76 more USD than the contracted amount of 9,090,909.09. This 757,575.76 will be treated as your Realized Loss on settlement date.

 

Hope your point is clarified. Let me know if you have additional questions.

 

Ramu


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