Forward Element of a Forward Contract

During the Fair Valuation process, for an FX forward, the application will compute two components of the FX forward: Forward Element and Spot Element. The value of the contract based on the Spot Rate at inception and the value based on the Current Spot Rate is calculated. The difference between these two amounts is termed as the Spot Element of the Forward Contract.

The Forward Element is the difference between the Fair Value of the contract and the Spot Element.