The following sections describe how you can group several contracts to create one contract or how to split a contract into several contracts. These functions are supported for loans given and loans taken. When you group contracts, you can transfer any number of source loans to a single target loan. When you split a contract, you split a single source loan into any number of target loans.

You must define the necessary flow types for the capital transfer (IMG step: Define Flow Types). You must assign an offsetting flow type to the respective flow type for each company code (IMG step: Assign Offsetting Flow).

You must assign the corresponding flow type to the application function. You make this setting for each product type according to company code and condition group (IMG step: Define Condition Groups ® Assign Flow Types to Condition Groups per Application).

You must define account determination for both the flow types and the corresponding offsetting flow types (IMG step: Define Account Determination).

You can only use the capital transfer functions if the following circumstances apply:

• The source loan(s) to be transferred has/have been disbursed.
• The disbursement obligation of the target loan(s) is greater than or equal to the amount to be transferred.
• All the loans affected have the same contract currency and product type.
• No postings exist after the transfer key date that are relevant for the cash flow and not based on conditions (such as unscheduled repayments). This applies for both source and target loans.
• No balance sheet transfers exist after the transfer key date.
• The system takes scheduled postings (such as repayments) into account when it calculates the capital available for transfer.

The Group Contracts function allows you to create one contract from several contracts for accounting purposes or to transfer parts of several contracts to another contract. The outstanding capital (remaining debt) of one or more contracts is transferred either fully or in part to another contract. This is necessary, for example, when a different borrower takes on the remaining debt of a loan.

When you enter the transfer data, you enter a transfer flow type. Depending on the system settings for this flow type in the IMG step Define Flow Types, the capital amounts in the source contract are treated in one of two ways:

• If you use the default settings that are delivered with the system, the outstanding capital (in other words, the amount to be transferred) is removed from the source loan. The amount transferred is treated as a "repayment" of the source contract and the receivable is moved to the new contract.
• If you opt for a "revolving loan" the outstanding receivable of the source loan is also transferred to the new contract (target contract). However, in this case the transfer regenerates a disbursement obligation in the source loan equivalent to the transfer amount. The source loan can then be disbursed again.

The Split Contract function allows you to split up a contract into one or more contracts for accounting purposes or to transfer parts of one contract to one or more other contracts. The outstanding capital (remaining debt) of one contract is transferred either fully or in part to one or more other contracts. The contract capital remains the same.