Effective Interest Rate Calculation 

Use

The effective interest rate calculation is a special financing view in which the system uses the payment schedule as the basis for calculation.  You assign the legally stipulated methods used to calculate the effective interest rate in the master data of the financing product under Distribution Chains. Leasing supports the current methods, such as AIBD/ISMA.

You can specify whether the financial mathematics flows are relevant for the effective interest rate. You do this in Customizing for the financing view. If you want to make extensive changes to the effective interest payment schedule for a specific customer, you can make these changes in a Business Add-In (BAdI); for example. you can use this BAdI to calculate an effective interest rate for a customer.

SAP provides the following implementation:

CALC_IRR, Calculate Effective Interest Rate: The system copies the cash flow created by financial mathematics to the customer view. It also copies the payment schedule for all previous financing views (such as the subsidy view). The system uses these flows to evaluate the lessor's return on investment.

 

Prerequisites

You must make the following settings in Customizing:

Customer Relationship Management → Financial Services → Leasing → Financial Mathematics Settings:

●      Specify that the financial mathematics flows are not relevant for the effective interest rate:

→ Financing Views → Exclude Flow Categories from a View.

●      Configure the BAdI for calculating the lessor's return on investment:

→ Configure FIMA Calculation Procedure → Business Add-Ins → CRM FIMA Calculation Procedure → BAdI: Calculation.