Calculation of the Present Value of Company Loans (Report RPCLOH00)
Use
Generally, loans count as ‘low interest’ if the loan’s debit interest rate is lower than the reference interest rate that is used for the calculation of imputed income. At present, this stands at 6% in Germany.
The report RPCLOH00 calculates the current value of loans. The current value is its cash value. The cash value of a loan is the sum of the discounted planned repayments.
Discounting is the multiplication of an amount by a discounting factor. When i is the discount rate in %, the discounting factor for an amount that is counted in t years is:
(1 + i/100) -t .
Prerequisites
The loans must already have been processed using the HR loan processing function.
Scope of Function
The report RPCLOH00 calculates the cash value of loans and takes interest due into account with repayments.
Example
An interest free loan of 10,000.00 is awarded and paid on January 01 1995. The repayment was set at 500.00 per month beginning from the 01.08.1995, with the result that
2,500.00 was paid back by the period 12/1995.
The loan is to be valuated with its current value on 31.12.95. On 31.12.95, the loan balance is 7, 500.00. Discounting is 6%. The repayment schedule is as follows:
Year |
Period |
Balance after repayt. |
Repayt |
Discount |
Cash val. Repayt |
1996 |
01 |
7 000,00 |
500,00 |
0,9952 |
497,58 |
1996 |
02 |
6 500,00 |
500,00 |
0,9903 |
495,17 |
1996 |
03 |
6 000,00 |
500,00 |
0,9855 |
492,77 |
1996 |
04 |
5 500,00 |
500,00 |
0,9808 |
490,38 |
1996 |
05 |
5 000,00 |
500,00 |
0,9760 |
488,01 |
1996 |
06 |
4 500,00 |
500,00 |
0,9713 |
485,64 |
1996 |
07 |
4 000,00 |
500,00 |
0,9666 |
483,29 |
1996 |
08 |
3 500,00 |
500,00 |
0,9619 |
480,95 |
1996 |
09 |
3 000,00 |
500,00 |
0,9572 |
478,62 |
1996 |
10 |
2 500,00 |
500,00 |
0,9526 |
476,30 |
1996 |
11 |
2 000,00 |
500,00 |
0,9480 |
473,99 |
1996 |
12 |
1 500,00 |
500,00 |
0,9434 |
471,70 |
1997 |
01 |
1 000,00 |
500,00 |
0,9388 |
469,41 |
1997 |
02 |
500,00 |
500,00 |
0,9343 |
467,14 |
1997 |
03 |
0,00 |
500,00 |
0,9298 |
464,88 |
The cash value of the loan is the total of the cash values for the individual periods and amounts to 7,215.83.
Depending on the parameter settings, the following is displayed: The repayment schedule for individual loans, the listing of cash values for each personnel number, and a grouping of the cash values for various loan types. The depreciation value describes the difference between the credit entry and the cash value.
If, for a loan of 10,000 with loan type 0100, you run the report RPCLOH00 with the selection parameters for the relevant personnel numbers using a discount rate of 6% and the option
List with loan per personnel no.
, the following is displayed:
Calculation of the present value of low interest company loans
Pers. no. |
Loans |
Credit entry |
Depreciation |
Book value |
11220002 |
0100 01 |
7 500,00 |
284,17 |
7 215,83 |
Calculation of the present value of low interest company loans
Loan wage type |
Credit entry |
Depreciation |
Book value |
0100 |
7 500,00 |
284,17 |
7 215,83 |
**** |
7 500,00 |
284,17 |
7 215,83 |
Calculation of the present value of low interest company loans
Statistics
Total of open loans after last payroll run: |
7 500,00 |
Number of personnel numbers selected: |
1 |
Number of personnel numbers selected with loans: |
1 |
Number of loans selected: |
1 |