Using Intercompany Processes for Debt & Investment Management (1YI)

This scope item allows company to handle loans with an affiliate company. If the loans contract is created in the issuing company, a mirror transaction is automatically generated in the receiving company.

The following product types are available for the intercompany trading process: 55I - Interest Rate (IR) Instrument and 58I - Current Account-Style Instrument (CA-Style Instrument).

The Intercompany Process for Debt and Investment Management supports the analysis of the cash position and the subsequent determination of the interest rate for the loan contract. It helps you with the creation of the load contract by the issuing company and automatically creates the mirror deal in the receiving company.

The scope item also sets the basis to perform follow-up activities with standard debt and investment management (1WV).

The cash manager from central group will check the cash position status, and can see a need of liquidity for a subsidiary company based on analysis of the cash position, help to bring about the intercompany debt and investment deal.

If basic cash management is implemented in your system, you can use app Display Cash Position (subtitle FF7AN) to analyze the cash position. For details refer to test script Basic Cash Operations (BFB).

If full cash management is implemented in your system, you can use app Cash Flow Analyzer to analyze the cash position. For details refer to test script Advanced Cash Operations (J78).

With the help of the tile Create IR Instrument, you can create an interest rate instrument transaction with an affiliated company. Make sure you use the product type 55I - INT. The mirror transaction will be generated automatically in the affiliate company.

Create a current accountt-style instrument with product type 58I in app Create CA Instrument. In this case, the mirror transaction will be generated automatically in affiliate company.

After the contact is settled, the issuing company can increase or decrease the nominal amount of the current account-style instrument transaction according to the business requirement. For the internal cash flow balance, the receiving company needs to update the mirror transaction accordingly, as it's a manual process.

After the current account-style instrument - intercompany transaction is created, the corresponding debt and investment mirror deal is created automatically, in the same status as issuing deal.

Select the Manage Your Solution app in order to get to the Configuration screen.

The task Configure Your Solution will give you the possibility to maintain certain processes.

In this activity, you assign the company code to a partner. This partner represents the affiliated company as counterparty in intercompany transactions.

For the issuing transaction and mirror transaction creation, both business partners for issuing and receiving company code need to be maintained.

In this activity, you determine whether a mirror transaction is created with the company code, product type, transaction type, and activity category parameters.

The Partner field determines the transaction counterparty and the company code of the mirror transaction.

A mirror transaction can only be generated if an issuing contract is created with the matched parameters.