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Jul 08, 2020 at 12:13 PM

GL Balance Interest Calculation - Simple Interest (Linear Interest)

184 Views Last edit Jul 14, 2020 at 05:34 PM 11 rev

Hi Fraternity,

We have configured the GL Balance Interest Calculation functionality in S/4HANA 1809 with necessary configuration areas such as OB46; OBAA; OBAC; OB81; OB83 and OBV2. Everything is fine as the system is doing the Compound Interest Calculation (Exponential Interest) on a monthly basis and the Interest Component is getting posted to the Principal GL Account (Loan Account).

But the requirement is Simple Interest Calculation (Linear Interest). Where in the monthly Interest Component will not be added to the Principal Amount, but need to be accrued into the same GL (Loan Account). Whatever the ad-hoc/periodic repayments will be first adjusted to the accrued Interest Component and the net balance if any to the Principle Amount. The subsequent interest calculation needs to be on the revised Principal Amount.

We did a workaround with Interest Component getting posted to the different GL Account through the necessary configuration setup at OBV2 for Interest Indicator. But the customer is insisting on the Interest need to be accrued into the same GL (Loan Account) and the Interest need to be calculated on the original principal.

Do let me know if you guys need any further details for better understanding of the requirement.

Any suggestions really appreciated…

Best Regards