Interest rate instrument & Facility link issue

[Ahmed_Samir]

Dear Experts,

I have the below cycle where i create facility for 100,000 EUR , when creating interest rate instrument contract with the below parameters:

- Principal amount: 100,000 EUR

- Interest: 30,000 EUR

- Capitalized interest box is checked.

While linking the Interest rate instrument contract with the Facility, the system informs me that i exceeded the limit, by 30,000 which is the interest amount.

Is there is a way for the facility to not add the capitalized interest to the limit, or work around for not adding this interest to the facility limit?

Regards,

Ahmed Samir

[grigoriy_babitskiy · Accepted solution]

There is no standard way to do what you want to do, Ahmed.

Solution - enchancement point

tr. SE38 -> IFTR_FC_ASGN_TRTM_IMP

method LIF_FC_CONVERTER~POS_CREATE (starts from 853 line)

you have to create Enchancement point at the end of method and manipulate internal table PE_TAB_POS.

here is PE_TAB_POS with interest capitalization - lines 2 - 13.

We need to make this table look like:

i.e.

1.We need to either delete lines 2-13 or make fields CHG_AMOUNT initial for lines 2-13.

2. We need to make line 14 looks like line 1 but with the opposite side.

The scenario that i've described is very easy.

There might be also Annuity flows, etc - and table PE_TAB_POS will look different.

here you have to delete all positive amouts except the first. The rest will influence facility limits.

[Ahmed_Samir · Accepted solution]

Dear Grigoriy,

Thanks, your feedback is really appreciated.

I agreed with the customer that it will be enhancement but not as you Described, but in a similar way.

Regards,

Ahmed Samir

[Gustavo_Vazquez]

Hi Ahmed,

Do you pay interest at the begining of the Interest Rate Instrument ?

What is the Due Date for the Interest ?.

Could you post screenshots of the transaction ?

Kind Regards

[Ahmed_Samir]

Dear Gustavo,

Thanks for your quick respond, kindly check the below answers:

1- Do you pay interest at the beginning of the Interest Rate Instrument ?

No, some of the loans types like (Direct funding & letter of credit financing) it's interest will be payed at the end of the term and some other loans types (Mid-term and mortgage loan) the interest will be payed monthly,my the customer wants to post the deferred interest exp at the beginning of the contract.

2- What is the Due Date for the Interest ?

For my question the due date should be at the beginning of the contract.

3- Could you post screenshots of the transaction ?

During Facility creation

During loan creation

Cash flow tab:

During assignment with the Facility:

During saving the contract:

Regards,

Ahmed Samir

[grigoriy_babitskiy]

Message FTR_ASSIGNMENT-003 is customized.

It means that you can set type of this message from Error (red - not possible to do anything) to Warning (yellow - you can continue creation of transaction)

Use tr. OBA5

[Gustavo_Vazquez]

Hi Ahmed,

If you use this combination (Capitalized Interest + Due Date ate the begining), it will take 3,000 SAR from your facility line.

Also, when you save the transaction you get the message T0356.

You could change your message from error to warning as Grigory suggested

Kind Regards

[Ahmed_Samir]

Dear Grigoriy,

Thanks for your feedback, i'm familiar with this option but i'm not talking about avoiding the message , the interest amount will still be appeared in the Facility utilization report, that why i'm asking if there is a way for not adding this to the limit from the beginning.

Regards,

Ahmed Samir

[Ahmed_Samir]

Dear Gustavo,

The main reason i'm doing this is because my customer post all the expenses amount for the whole contract at the beginning of the contract to be as below:

let's say that the principle amount for the loan is 1,000,000 and the interest amount is 50,000 per month

the duration is 3 months:

so during posting the contract borrowing:

Dr. Deferred interest exp               150,000

Dr. Bank                                      1,000,000

     Cr. Notes Payable - Loans            1,150,000

and at the end of each month using TPM44 the posting should be:

Dr. Interest Exp.                         50,000

     Cr.  Deferred interest exp           50,000

3 times the above entry will be posted

and at the end of contract the below entry will be done

Dr. Notes Payable - Loans            1,150,000

     Cr. Bank                                      1,150,000

i notes that the above can be done if i used Capitalized interest check box,but the issue now 2 cases:

- Facility limits

- If the interest frequency is monthly, i'm handling it now using Z program

that's why i'm asking for the facility for now, i hope that you got my case now.

Regards,

Ahmed Samir

[Gustavo_Vazquez]

Hi Ahmed,

You could create a new Flow in "Define Flow Types" and a new Condition type in "Define Condition Type"  but this will be not standard.

As you capitalized interest and payed them in advance, SAP considers it's part of the transaction so it consumes your Facility line.

Kind Regards

[Ahmed_Samir]

Dear Gustavo,

Appreciate your assistant really , but could you please clarify "You could create a new Flow in "Define Flow Types" and a new Condition type in "Define Condition Type"  but this will be not standard."

i familiar that it's not standard but unfortunately it's a customer requirement, so could you guide me how my case will be applicable if i created a new flow and condition type.

Kind Regards,

Ahmed Samir

[Gustavo_Vazquez]

I don't know if it will work. Here are the routes in IMG.

FSCM -> TRM -> Transaction Manager -> Money Market -> Transaction Management ->

-> Flow types -> Define Flow Types

                       -> Assign flow Types to transactin types

-> Condition Types -> Define Condition Types

                               -> Assign conditions to transaction type

every Transaction has got Transaction Types (200),  Flow Types (1150) and then Update Types (MM1150-).

You have to create a new transaction type with the flow you need.

Kind Regards

[Gustavo_Vazquez]

Hi Ahmed,

1- In "Define Flow Types" copy flow 1200 as a new flow for Capitalized Interest.

    Assign the same checkbox as in flow 1150

2- "Assign Flow Type to Transaction Type" with the new one create in step 1

3- "Assign Flow Types to update Types"  for the new Flow with movement type MM1150- and MM1150+

4- "Define Condition Types" copy CT 1200 as a new CT. Adjust new Flow Type

5- "Assign Condition Types to Transaction Type" to the transaction

Don't use "Capitalize interest" in the transaction, instead use the new CT created on step 5

Hope this helps. Please, tell me if it worked.

Kind Regards

[Ahmed_Samir]

Dear Gustavo,

Appreciate your feedback, but i use flow 1150 and it adds the interest amount to the limit, so do u think that there is a check box in the configuration to prevent that.

OR

Let me rephrase my question with how to add amounts to the principal amounts for the loan without affecting the facility limit.

Regards,

Ahmed Samir

[Gustavo_Vazquez]

Hi Ahmed,

i don't think there is a checkbox to prevent flow 1150 affect facility limit.

kind Regards