3.1 Maintain Fair Values for Revaluing a Contract

This topic provides the systematic instruction to maintain fair values for revaluing a contract.

Specify User ID and Password, and login to Homepage.

If you have indicated that a particular contract should be revalued based on the contract fair price the system automatically inserts a record in the ‘Revaluation Contract Fair Price Maintenance’ screen for that contract. This is done during the Beginning of Day batch process based on the revaluation frequency specified at the product level.

This concept can be explained with the help of an example:

For example You have set the revaluation frequency of the contract bearing the reference number 000DV21992950177 to monthly. The first revaluation was done on 1st January 2000. The next is due on the 1st of February 2000.

On the 1st of February 2000 the system automatically inserts another record in the Contract Fair Price Maintenance screen for the contract 000DV21992950177. You have to unlock the record, enter the in/out leg values and the net fair value of the contract.

1. On the Home Page, type IDDCNVAL in the text field, and click next arrow.

   The Islamic Derivatives Contract Fair Values screen is displayed.

   Figure 3-1 Islamic Derivatives Revaluation Contract Fair Values

2. On the Actions menu, click New.
   You can change the revaluation frequency of a specific contract.

   The Islamic Derivatives Revaluation Contract Fair Value screen is displayed.

   For more information on the fields, refer to the following field description table:

   Table 3-1 Islamic Derivatives Product Definition

   Field	Description
   Contract Reference Number	Select the reference number of contract whose revaluation frequency is to be changed. This field is mandatory.
   User Reference	The system displays the user reference once the reference number is selected. This field is optional.
   Revaluation Date	Enter the Revaluation Date using the calendar icon. This field is mandatory.
   Transaction Date	The system displays the transaction date. This field is optional.
   In Leg Revaluation Currency	The system displays In Leg Revaluation Currency. This field is optional.
   Out Revaluation Currency	The system displays Out Revaluation Currency. This field is optional.
   In Leg Fair Value	Specify the in leg fair value. This field is optional.
   Out Fair Value	Specify the out leg fair values. This field is optional.
   Net Fair Value	Indicate the net fair value of the contract as of the revaluation date. The value that you enter includes the effect of the in leg and out leg of the contract. When the currencies of both the in and out leg of the contract are the same you have to calculate the net fair value of the contract by deducting the out leg amount from the in leg amount. Example: The Fair Value in the In Leg field amounts to USD 1,000,000.00 The Fair Value in the Out Leg field amounts to USD 500,000.000Since both the values are in the same currency, USD 500,000.000 deducted from USD 1,000,000.00 amounts to USD 500,000.000. Thus you can enter USD 500,000.000 as the Net Fair Value. Supposing the currencies of both the legs of the contract are different then the Base Currency specified at the time of Contract Input will be the accepted as the default currency for the Net Fair Value. You have to compute the Net Fair value using the existing exchange rates. After indicating the respective values you must indicate your confirmation of the same. Only confirmed records will be picked up and processed for revaluation by the End of Day batch process. This field is optional.
   Net Revaluation Currency	Indicates the currency of net revaluation.
   Profit Revision	Choose either Auto or Manual option. This field is optional.
   Confirmation Date	Select the Confirmation Date in YYYY-MM-DD format.

3. On the menu, click the Unlock icon.
4. Specify the in and out leg values, and compute the new net fair value and save the record.

   During bulk upload of these fair values for multiple contracts, Oracle Banking Treasury Management expects the following information to be present in the upload message:

   • Contract Reference No.

   • Effective Date
   • InLeg Value
   • OutLeg Value
   If any of these values is missing for any record, the system will terminate the upload process and raise an error message as, “Net Fair value will be defaulted from Inleg and Outleg fair values.” The single record and bulk record uploads requests are handled in bulk requests itself for the following:

   • DV Fair Value

   • DV Rate Revision

   The system will also raise an error if:

   • Contract Reference Number is not valid

   • Duplicate record exists for the Contract Reference Number and Effective date combination.
   • Revaluation date is greater than the application date

   You can run the fair value upload process any time before the IDV batch is processed during the day. During the IDV batch, contract revaluation will be done based on the fair value uploaded.

5. On the Islamic Derivative Revaluation Contract Rates Summary screen, double-click a record of your choice to open it.

   You can view the record details in the Islamic Derivatives Revaluation Contract Fair Values screen by opening existing contract price maintenance record.

   Figure 3-2 Islamic Derivatives Revaluation Contract Fair Values Summary

• Operations on the Contract Fair Price Maintenance record
  This topic provides systematic instructions about the operations that you can perform on the contract fair price maintenance record.