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FI Entries during Interest rate instrument posting

Dear Experts,

I have a case in the Money market area, i'm using product type 55A (Interest rate instrument) for handling the loans for a customer.

he wants the FI entries to be as below:

When receiving the loan:

Dr. Accrual bank interest Exp.           200,000

Dr. Bank- Main Account                    1,000,000

     Cr. Loan Account                               1,200,000

At the end of each month:

Dr. bank interest Exp.                        10,000

     Cr. Accrual Bank interest Exp.           10,000

At the end of contract:

Dr. Loan Account                               1,000,000

     Cr. Bank                                              1,000,000

As far as i know, this should be the entry:

When receiving the loan:

Dr. Bank- Main Account                    1,000,000

     Cr. Loan Account                               1,000,000

At the end of each month:

Dr. bank interest Exp.                        10,000

     Cr. Accrual Bank interest Exp.           10,000

At the end of contract:


Dr. Accrual bank interest Exp.           200,000

Dr. Loan Account                               1,000,000

     Cr. Bank                                              1,200,000

To sum up, he wants to post the accrual for the bank interest at the beginning of the contract, is that applicable?

you assistant is really appreciated.

Regards,

Ahmed Samir

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2 Answers

  • Best Answer
    Oct 22, 2015 at 05:08 PM

    Hi Ahmed,

    You can't post interest at the begining of the transaction in Product Type 55A.

    You could enter an expense, but interest will be calculated based on the days and interest rate you lend/borrow money.

    You could use Product Type 54A and create your own cashflow.

    Kind Regards

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    • Dear Gustavo,

      Is it applicable to for the accrued interest account which will be posted to at the end of term ,, be posted to at the beginning of the team and TPM44 entry (Dr intreset exp/Cr. Accrued interest exp)

      to be the last t.code to post to this account ?!

      is there is any configuration steps might do that?

      making the posting logic like upside down , instead of posting TPM44 entry and then the accrued exp entry at the end of term we make the posting to accrued first then all the TPM44 posting.

      Regards,

      Ahmed Samir

  • avatar image
    Former Member
    Oct 23, 2015 at 01:43 AM

    Hi Ahmed,

    1. You can certainly post Interest at start of the contract. In the structure tab of the transaction you click on Detail view Interest Condition (Small button to the right next to Condition type field), in there under update, you have rule, there you can select the option 11 - Regular / Due Date at the start of the Period.

    2. You Can also have the accrual not reverse the next day - by configuring Difference procedure. For this you need to activate Business Functions - FIN_TRM_LR_FI_AN and FIN_TRM_LR_FI_AN_2 .By Configuring the Difference procedure the accrued interest will not reverse and will be cleared at the end of the contract.

    Regards,

    Nikhil


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    • Dear Nikhil,

      Thanks for your respond, i'm familiar this this option, but my case is as below:

      1- Suppose that i borrowed from bank 1,000,000 USD

      2 - the interest for the contract is 200,000 on the whole contract.

      3- my customer wants during receiving the loan the system to post the below entry:


      Dr. Bank                              1,000,000

      Dr. Accrued Bank interest     200,000 (Not the amount for one month but the whole contract)

           Cr. Loan Account                    1,200,000

      4- at the end of each period the below entry should happened for Accrued interest

      Dr. Bank interest                     33,000  (the amount for bank expenses for one month)

           Cr. Accrued Bank interest         33,000

      5- after finalizing and paying the loan amount the below entry should happened:

      Dr. Loan account

           Cr. Bank

      ----------------------------------------------

      as you can see, it's the other way around, the Accrued bank interest account in the standard behavior from SAP should appear in the final entry only. how can to display the accrued account it in the opening entry.

      thanks for your assistant.

      Regards,

      Ahmed Samir