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Former Member
May 10, 2012 at 01:36 PM

How does TRM calculates amortised value of loan?


Hello colleagues,

I've faced with requirement that seems to be standard for IAS/GAAP but quite new for CIS countries:

Loans received are entered in the accounting statement in the amount of amortised cost with the application of the effective interest rate.

I need your help to find proper way to realise it for my client.

I expect that it should be done through TPM1 and i need to specify market data on effective % rate.

I'm entering loan received with product category "Interest rate instrument":

Amount 1000 USD

Interest rate 2%

From 01.05.2012

To 01.05.2015

Interest and repayment at the end.

Cash flow is quite simple:

01.05.2012 1105 Borrowing / Increase 1 000,00

01.05.2015 1120 Final repayment 1 000,00-

01.05.2015 1200 Nominal interest 60,83-

I've also specified standard Position Management Procedure = 1001 Sec./Loan: MtM (P/L)/Amort. SAC Net Separate Position Costs.

My questions now are:

1) How do i specify effective interest rate? In my example i want to discount future cash flows with market rate 5%

2) Am i right about choice of PMP (1001) and Tcode for that (TPM1)?

Thanks in advance and best regards.