Calculate Interest {FARS-3}

The calculation of interest is “event” FV: “AR - Staff Loans Interest”. Before this program can be executed the first time, the user must create a suitable Transaction Type (TT) via {FCSO-7) and link it to this event. The revenue account to which the interest amount should be credited, as well as the debtors control account, will be retrieved from the Loan Detail in {FARS-2}; they are thus not required in the definition of the TT.

This option calculates the interest transactions by using the information on the debtor’s record: it inserts the generated transactions into the debtor’s transaction files.

On execution of the option, the system controls that a transaction type is linked to the applicable event and that the transaction type is correctly specified. The user-supplied selection criteria are as follows:

If (T)rial is requested, no transactions are generated by the system.

After the parameters are specified, the system first controls that no interest transactions are found for the current “AR” cycle in {FCSMN-2}. If any transactions are detected, the system will respond with: “Interest has already been calculated for this AR cycle and/or Salary calculation number; interest calculation will be terminated now” it will then abort.

Otherwise the system calculates the interest per debtor as below, checking that the “AR” cycle is bigger than or equal to the start cycle for repayment for every loan.

If no interest is calculated for a debtor for one of the following three reasons:

-        debtor is inactive,
-        principal = 0,   or
-        interest rate = 0,

the debtor is listed on a control report, showing debtor details and the reason for non-calculation of interest. Note that this report will NOT normally contain debtors that have repaid their loans in full.

If the system calculates interest for a debtor, it adds this month's interest to the “Cumulative Interest” in {FARS-2b2} and creates the following two transactions for this debtor which can be viewed on reports {FAROR1-4/21/23}:

*     a zero VAT-rated debit journal to the value of the interest with journal number = loan code and note = personnel number

*     a GL transaction for the same amount with transaction number = loan code and Interest TT as specified, which debits Debtors Control GLA and credits Interest Revenue GLA.

Transactions for (F)ull interest calculations will be identified with the word “LOANINT”: transactions for (S)ingle interest calculations will be identified with the word “SINGINT”. These are reference numbers to which the rollback program is sensitive. The journal number used is “INTYYYYMM-loan code”, where YYYYMM is the year and cycle of AR.

Control totals are given at the end of the run, viz.

   *   number of journals generated and their total value
   *   number of GL transactions generated and their total value.

The monthly interest on diminishing balance is calculated as

I * (P - CP) / 1200   (rounded to 2 decimals),
where I = interest rate, P = loan principal and CP = cumulative principal repayment to date.

User Selection	Prompt Text ^{* an item between square brackets [ ] is the default answer}	Type & Length	Comments
	Do you want to do a (S)ingle or (F)ull interest calculation.	A1
	(T)rial or (F)inal run.	A1
	If (S)ingle, system requests whether:
	Enter Debtor code to calculate interest for.	N9
	Enter Loan code to calculate interest for.	N4
	Enter date to be inserted with interest transactions (this date will determine the date up to which interest will be calculated).	DD-MON-YYYY
	Include inactive debtors? (Y/N)	A1
	Enter Salary calculation number (1-9) or ALL	A3
	If (F)ull, system requests whether (T)rial or (F)inal run.
	Enter date to be inserted with interest transactions (this date will determine the date up to which interest will be calculated)	DD-MON-YYYY
	Include inactive Debtors? (Y/N).	A1
	Enter salary calculation number (1-9) or ALL.	A3

Sort Order	Per	Comments

System Select
	No special system selection

Example:

Processing Rules
	No special processing rules.

Date	System Version	By Whom	Job	Description
29-May-2008	v01.0.0.0	Charlene van der Schyff	t145484	New manual format.
10-Jul-2009	v01.0.0.1	Charlene van der Schyff	t158351	Edit language obtained from proof read language Juliet Gillies. Inserted image.