Interest rate instruments (conditions and acctng entries)

[prasadraju]

Dear Treasury Experts,

We are using SAP Treasury Product (55A Interest Rate Instrument-Borrowing) to meet one of our business requirements. We are creating  deal/contract with a fixed interest.

The business requirement is here that they want to calculate the interest value on daily as per rate maintained in conditions (variable interest as per disbursement of loan) and pay interest on Monthly Basis.

If I set frequency Daily in Interest Structure Tab .It is updating correctly. But the Issue is here that than it is creating interest accounting entry on daily basis. We do not want to create Interest Entry on Daily basis need one entry of total interest of the month?

Could you please help me to update the interest rate on daily basis and calculate the Interest Value accordingly and pay on Monthly?

Thanks & Regards,

Prasad

[dfg1988]

I hope I understood correctly you question.

I created an example if this works let me know.

T.code  (TM_51) transaction and you must enter data as follows (example):

Company code:

Product type: 55A
Transaction type: 200

Partner: BP

Choose Enter.

On the Structure tab page, enter data as follows:

In the borring group box, enter the investment amount.

In the Term group box, enter the start and end date of the investment, and choose End Inclusive for the calculation period.

• In the Interest Structure group box, choose Variable as the interest form, (and your interest) in this example CDI as the reference interest rate, ActW/252  (work Days) as the interest calculation method, and BR as the interest calendar.
• Detail View Int. Conditions (The puzzle)

In the  (Update)   choose the frequency, in your case monthly.

End of interest period the date of the first payment as the due date.

Go back and then click on Conditions:

The next screen selects the Interest Rate Adjustment (1210) condition and choose Edit Select Conditions .

Now the trick part:

In the Interest Rate Adjustment group box, choose Regular as the rule for the date update with 1 calendar day, enter the interest rate adjustment date, and choose No Shift as the calendar rule.

In the Interest Rate Fixing Date group box, choose Relative as the rule for the date update, and enter –1 working days, and calendar.

Go Back:

In the repayment structure group box, enter the repayment method

.

Choose the frequency, in your case monthly of the interest.

Check the calculation on the Cash Flow tab page.

The payment View:

And finally, the interest daily calculated.

There're a couple more details, but this is the most important. I hope this helps.

Best

[rohitbali]

GIve due date as end of the month in each rate.

regards,

rohit

[prasadraju]

Hi Rohit,

Thanks for your reply. Please can you elaborate in detail with screen shots.

Regards,

Prasad

[rohitbali]

See below screenshot.

whenever new interest rate come in you can copy condition and insert new interest condition with due date as month end.

Regards,

Rohit Bali

[prasadraju]

Hi Rohit,

I tried posting as you advised above but still it is creating interest accounting entry on daily basis. Need one entry for entire one month interest. Please suggest.

[rohitbali]

Follow as below:

[prasadraju]

Hi Rohit,

I tried above steps too it worked in few scenarios. But i'm not sure exactly which fields and steps will fulfill the requirement. Please request you to share one complete scenario of the above requirement.

Thanks,

Prasad

[prasadraju]

Hi Rohit,

Please can you advise the below changes and any missing steps.

In the above cash flow i could see the interest flow for month (01.01.2015 to 31.01.2015) but daily based flows are missing

and i try to posted (TBB1) the flows.

i did the same changes for next month (01.02.2015 to 28.02.2015) cash flow as follows

I Have few doubts to clarify here please suggest

1) every month we need to manually input the conditions (calculation date and due date) by copying conditions tab?

2) In the above cash flow daily based interest flows are missing, did i missed any steps?

3) Please suggest all the necessary changes to fulfill the requirement.

Thanks,

Prasad

[rohitbali]

Hi prasad,

was travelling so cudn't respond:

You executed it correctly. SInce the due date is same for all the days of the month it is not showing you the breakup of the cash flows day wise. The system itself take care of day wise calculation taking your ex itself (70000*.05/365)*31 is the interest you have calculated which is correct.

If you want to separate it with the date basis do this below:

FTR_Create

Select Details button

Select Special and single date

Flow will appear as follows

Anything is possible in the options given by SAP just need to explore.

Regards,

Rohit Bali

[prasadraju]

Hi Rohit,

I tried the above scenarios but system generates document for daily wise, as per requirement need to generate one document entry for entire month interest. Please can you suggest any other options.

Thanks,

Prasad