Define Period Control for Compound Interest (SAP Library

Define Period Control for Compound Interest

In this IMG activity, you define period control for compound interest.

Note that this function is only available for calculation of actual interest on capital investment projects or orders.

You use period control if you do not want to calculate compound interest in every interest run. For example, you can calculate interest every month and compound interest every quarter.

As with the interest calculation, the compound interest calculation is effected using the interest relevance of the G/L accounts/cost elements defined for interest.

Period control places the interest posting periods and the periods for each fiscal year variant in relationships with each other.

Starting from the interest posting date, the system uses period control to calculate the valuation period for calculating compound interest.

You must review the specification in the following cases:

You are using period control rules you defined yourself.

You are changing the period definition for the fiscal year variant in this company code.

Requirements

You must have defined

Fiscal Year Variants for your company codes in Financial Accounting.

Standard Settings

For the compound interest calculation in capital investment projects, the SAP system offers four standard period control scenarios:

21 Monthly compound interest

22 Quarterly compound interest

23 Half-yearly compound interest

24 Annual compound interest

For these four scenarios, the system automatically generates calendar assignments when you assign the relevant fiscal year variant (K4) to the assets company code.

Recommendation

We recommend you use the specifications supplied by the system, without changes or additions, if none of the above points applies to your installation.

Activities

1. Assign particular periods to the calendar data for your fiscal year so that you can run the compound interest calculation.

a) If the standard period keys are not sufficient, choose Edit -> New entries to define a new period key or copy an existing one.

b) Enter the following for period control:

a key

a name

2. Define the posting periods by calander and stipulate the period in these posting periods from which compound interest is to be calculated.
You define the posting periods by entering the last calendar date in the relevant period.

3. Note that the finish date for the defined posting periods must be the same as the finish data for the fiscal year variant in the relevant company code.

4. Define the period key in the interest profile.

Further Notes

You need to have interpreted

Fiscal Year Variants - that is, you must enter period 000 or blank for the depreciation or interest calculation starting at the beginning of the fiscal year.

Compound interest calculation period control is not relevant for customer or overhead cost project. If the interest is posted to an interest-relevant cost element, the compound interest for projects of these types is calculated in every interest run.