Commitment Interest
Use
Commitment interest is calculated for the current disbursement obligation from the Eff. from date.
Prerequisites
Loan commitment interest has been saved to the database as planned records before the loan disbursement and can thus be posted.
In Customizing for Loans, choose Company Code-Dependent Settings for Product Type ® Define Status per Product Type. Set the CG indicator (cash flow generation in contract status before disbursement).
Procedure
1. Fetch a condition item for the condition type Commitment interest by choosing Insert additional items.
2. Enter the Eff. from date.
3. Enter the interest rate.
4. You can enter the payment frequency in two ways:
a. Enter the frequency in months manually in the Frq field.
Via the PF field (payment form), you can specify whether the interest payment is due at the start of the period, mid-period or at the end of the period. In this case, you do not need to enter a calculation date or due date. These dates are calculated automatically by the system.
b. Choose a value for the PE field (exact payment form).
The payment forms delivered in sample Customizing result in the following payment dates:
Short name |
Long name |
Resulting payment date(s) |
JM |
Mid-year |
06/30 |
JN |
Yearly at end of period |
12/31 |
JV |
Yearly at start of period |
01/01 |
MM |
Middle of the month |
01/15, 02/15, 03/15, 04/15... |
MN |
Monthly at end of period |
01/31, 02/28, 03/31, 04/30.... |
MV |
Monthly at start of period |
01/01, 02/01, 03/01, 04/01... |
You can define your own payment forms in Customizing for Loans by choosing Define Payment Form.
5. Calc.date (calculation date = last day of the current interest period)
6. Due date (= date of the first interest payment)
7. You flag fields MC and ED if you want the calculation date or the due date to fall on the last day of the month. If you select these fields, the respective date is always the last day of the month, even if you enter another date somewhere else.
8. Via the CR field you define how to shift the calculation date or the due date if the date entered is not a working day. If you enter a shift rule for the due date, you must select a corresponding calendar in the Condition Details screen.
Do not enter a shift rule for the calculation date, since this date is used as a basis for financial mathematics.
9. Currency (of the interest payment)
10. In the Condition Details screen, select Disbursement obligation for the Base reference field.
11. You use the Basis fixing indicator to define when the base reference is calculated for each period.
The following options are available:
a. For each entry
b. At start of period
c. At end of period
d. At start of calculation
e. At end of calculation
12. If you activate the Percent.calc. indicator, the system ignores the interest calculation method and calculates the percentage independent of a specific period.