Calculating Interest 

Use

During account settlement, the interest per settlement period is determined for an interest calculation period.

Interest calculation consists of three parts:

·        Determination of the conditions that are valid for a settlement period

·        Determination of the various balances that form the basis for the conditions

·        Calculation, which means transfer of conditions and balances to Financial Mathematics (FIMA) and preparation of results

The results of interest calculation are transferred to settlement control.

Prerequisites

You have made the following settings in the Implementation Guide.

·        You defined condition types for settlement, which relate to the condition category 105020 (Settlement Interest). In the Calculation Base Reference field, you have defined the basis for the interest calculation for each condition type, such as debit interest, credit interest, or the credit balance turnover class. You make settings for the condition type in Customizing under Account Management (FS-AM) ® Product Management ® Financial Conditions ® Define Condition Type.

·        You defined an interest calculation period in an account product under Account Management (FS-AM) ® Product Management ® Product Definition ® Account Products ® Create Account Product under the active feature attribute Settlement  ® Time Period ® Interest Calculation Period.

·        The account to be settled is based on the account product defined above and contains conditions for settlement interest.

Scope of Functions

The function module BKK_COND_CALC_EXEC_INT controls interest calculation for each period, which calls up the function module BCA_API_ACBAL_INT_CALC_CONTROL. This is where the actual interest calculation is made. Settlement results are calculated for the settlement based on a list of balances. The following steps are executed:

·        Determination of period data

·        Check of interest calculation period

For interest compensation, all participant accounts of a master contract must use the same interest calculation period. This is ensured by corresponding plausibility checks when accounts are added to a master contract.

·        Determination of conditions for the account in FIMA format.

·        Reading of balances.

·        Condition determination for FIMA conditions.

·        Call of BTE 0BCA4540 for transferring effective conditions.

·        Call up of Financial Mathematics: Based on the balances from Account Management, interest calculation periods and conditions, the interest is calculated and returned to AM.

·        Preparation of results in Account Management and transfer to settlement control.

If postings in a previous period and recalculations are necessary, then the system starts with the previous period. The steps described above are executed again for subsequent periods.

Capital yield tax

After calculation of credit interest for an account, the accrued credit interest is transmitted to the CYT module so that CYT can be calculated. This is done using the process BTE 0BCA4020 (capital yield tax).

Dependent on country-specific tax requirements, you can define the CYT method that is to be used to transfer the values for the CYT calculation. You make the settings in the Customizing for Account Management (FS-AM) under Product Management ® Settlement ® Select CYT Method.