5.3.4.6 Defining the Redemption Curve Methodology

As part of the process for defining the Redemption Curve Methodology, you must select as many Term Points from your selected Transfer Pricing Yield Curve as are needed and allocate the percentage weighting for each of those points. The prerequisite for defining the Redemption Curve Methodology is performing basic steps for creating or updating a Transfer Pricing Rule.

To add the term steps:

1. Click Add New Term Points to display the Add New Term Points page.
2. Select the Transfer Pricing Yield Curve Points as required.

   The Term Point Selection section is displayed.

3. Update the Percentage Value for each Term Point.

   Note:

   The sum of all the percentages for all Term Points must add up to 100.
4. To remove a Yield Curve Point from the Percentages/Term Points table, select the term point(s) and click the Delete icon.

Defining Tractor Methodology

The prerequisites for defining a Tractor Methodology are:

• Creating a Replicating Portfolio.
• Generating (and maintaining) the Portfolio. Volatile and Core Instrument strips will be created in the FSI_M_REP_PORTFOLIO_STRIPS table.

To define and use a Tractor TP Method:

1. Define the Transfer Pricing Rule and select the Tractor Method from the list of available TP Methods for relevant Product Dimension Members.
2. Select the appropriate Replicating Portfolio.
3. Select the Transfer Pricing Interest Rate Code.
4. Define a Transfer Pricing Process and Run using the TP Rule.
   • TP Process Transfers Price the non-zero portfolio strips using a Straight Term Method.
   • TP Process computes a weighted average TP Rate for the portfolio and will update all instruments mapped through the TP Rule to this method.

Defining Unpriced Account Methodology

When defining an Unpriced Account Methodology, you need to select the Product Dimension Members (products) whose weighted average transfer rate will be assigned to the product or currency combination being defined. The prerequisite for defining the Unpriced Account Methodology is performing basic steps for creating or upgrading a Transfer Pricing Rule.

To add the Dimension Values:

1. Click the Dimensional Values icon to display the Hierarchical Add Members page.
2. Search and select the required Dimension Members. Specify whether the weighted average of Transfer Rates has to be taken across all Organizational Units or for accounts only within that Organizational Unit.

   Note:

   You must also select the Organization Unit Dimension along with any other applicable dimensions under Migration Dimensions on the Migration tab of the TP Process when using this method.
3. Click Apply.

   The Transfer Pricing Assumption Browser page is displayed.