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Oracle Transfer Pricing User Guide
Release 12.1
Part Number E13524-03
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absolute payment pattern
A type of payment pattern commonly used for instruments that are on a seasonal schedule, such as agricultural or construction loans, and require special payment handling based on months or seasons.
See also: payment pattern
absolute repricing pattern
A type of repricing pattern commonly used for instruments with date dependent repricing characteristics.
See also: repricing pattern
Account table
Stores a detailed set of transaction-level data attributes pertaining to instruments. For example, origination date, outstanding balance, contracted rate, and maturity date.An account table is also known as an instrument table.
assignment date
Indicates the relevant date for which the associated yield curve has to be referenced. This parameter is used for defining the Spread from Interest Rate Code and Redemption Curve transfer pricing methods. You can choose origination date, last repricing date, or the last day of the associated calendar period as the assignment date.
A set of values or methodologies that apply to a single dimension value.
attributed dimension
A dimension whose members can have other properties or qualifiers known as dimension attributes. While attributed dimensions can also have hierarchies, they are not required to do so. For example, the Ledger dimension and Financial Element dimension do not have any hierarchies.


calculation mode
Any of the two ways, standard or remaining term, of calculating transfer rates and options costs supported by Oracle Transfer Pricing.
Cash Flow Edits
A business rule that allows you to verify and correct your Account table data.
cash flow edit logic
A set of checks that are performed in a specified order on the Account table data during a Cash Flow Edits rule run.
cash flow transfer pricing methods
Methods that generate transfer rates based on the cash flow characteristics of the instruments. These methods are typically used for instruments that amortize over time.
charge/credit accrual basis
The basis on which charge/credit accrues for a business unit and the offsetting treasury unit, similar to the accrual basis used in calculation of interest.
A business object that filters the source data that is used as input to a business rule.


Data set
A dimension used for segregating data into different sets according to its use or its source, for example, to separate actuals data, budget data, and encumbrances data. Other uses include separating test data from production data and creating separate data sets for what-if analysis.
Data Inspector
A business rule that allows you to view or update data in a specific table or view registered in the Oracle Enterprise Performance Foundation data schema.
A structure that can be used to categorize business data. A dimension contains members. A dimension can be hierarchical in that you can organize the members into one or more hierarchies, or nonhierarchical.
dimension attribute
A property or qualifier that further describes a dimension member. An attribute can be anything such as a date, a number, or a character string. For example, the Geography dimension can have an attribute Population that designates how many people live in that area. Each member of the Geography dimension therefore has an associated population.
dimension based rule
A business rule whose definition varies depending on the dimensional values of the data to which it is applied.
dimension identifier
A character string or a combination of character strings that uniquely identifies each member of a dimension. Dimension identifiers are nontranslatable, as they are the same regardless of the language context. Each dimension has its own unique set of columns in the Enterprise Performance Foundation interface tables that serve as the dimension identifier for that dimension.
dimension member
The values used to populate dimension columns in account, transaction, or statistical tables. Such values represent the individual organization units, distribution channels, products, and so on of which each dimension is comprised. In a hierarchy, both lowest level and node level values are considered to be dimension members.
A variable that influences the prepayment behavior of an instrument. You can build a prepayment table using up to three prepayment drivers. Each driver maps to an attribute of the underlying transaction (age or term, or rate) so the cash flow engine can apply a different prepayment rate based on the specific characteristics of the record.


effective dated hierarchy
A hierarchy whose definition changes over time, also known as slowly changing hierarchies.
entered currency
The currency in which business transactions take place. Entered currency might be different from functional Currency.
See also: functional currency


fact table
A table that contains data uniquely differentiated by dimension columns.
See: Management Ledger table
functional currency
The currency in which an organization keeps its books of accounts. Functional currency is associated with a particular ledger.


A structure of dimension members organized by parent-child relationships.
hierarchy definition
A structure of dimension members organized by parent-child relationships, for a designated effective date range. Hierarchy definition is synonymous with hierarchy version, in that it is one instance of the hierarchy.
hierarchy object
A collection of hierarchy definitions. The individual hierarchy definitions represent a particular picture of the hierarchy object.
historical term
The period preceding the assignment date over which the average of daily interest rates from a yield curve is taken. This parameter is used in Moving Averages transfer pricing method.


instrument table
See: Account table
A name for data that is stored in your database. For example, the item department is the name for all the departments at your company. You select items in the Workbook Wizard to get the data you want. Discoverer uses these items to write a SQL query. When the database returns the data that answers the query, the items you chose appear as row and column headings in a spreadsheet-like format.
Interest Rate Codes
Allows you to define and manage historical interest rates and term structure parameters for various interest rate curves.
interpolation method
A prepayment rates lookup method. The interpolation method is used when the value of prepayment driver does not fall on the nodes defined for it. This method assumes that prepayment speeds change on a straight-line basis between the two nodes and calculates accordingly.
See also: lookup method


lag term
Indicates that interest rate should be referenced from a yield curve for a date earlier than the assignment date. Lag term is applicable to the Spread from Interest Rate Code transfer pricing method.
A node, in a hierarchy, that has no children. All dimension members are nodes, but not all nodes are lowest level dimension numbers.
ledger migration
The process for generating charges or credits, for funds provided or used, for migration to the Management Ledger table based on the transfer rates or option costs, obtained from transfer pricing and option cost calculations or propagation processing.
A property of hierarchical dimensions that designates a category of like members.For example, in the Geography dimension there might be a level named City and a level named State. Geography members such as Tulsa and Dallas belong in the City level, while Geography members such as Texas and Oklahoma belongs in the State level. The designation of level is the same across all hierarchies within a dimension. In other words, Texas is always a state in all Geography hierarchies.
Line Item dimension
A Product dimension on which all Oracle Transfer Pricing product level assumptions are based. The Line Item dimension should be populated with your product chart of account at a level of detail appropriate for assigning transfer pricing assumptions to your data.
lookup method
Method used to calculate prepayment rates for prepayment driver values that do not fall on the nodes defined for that particular prepayment driver.
low discrepancy sequences
Sequences, also known as quasirandom sequences, designed to fill the space uniformly. These achieve better accuracy with fewer scenarios than pseudorandom sequences when applied to numerical problems, integration in high dimension, and so on.


Management Ledger table
Also know as FEM_BALANCES, the most central fact table in the Oracle Enterprise Performance Foundation framework. It contains ledger and some statistical data and especially aggregated information, such as cash and other assets, and equity. This table supports Oracle Financial Services applications.
mid-period repricing option
Allows you to take into account the impact of high market rate volatility while generating transfer prices for your products. However, the mid-period repricing option applies only to adjustable rate instruments and is available only for certain noncash flow transfer pricing methods.


A dimension value located anywhere in a hierarchy.
node level assumption
An assumption assigned to a dimension value at a level higher than a leaf level. A node level assumption is typically associated with a business rule that uses a hierarchical dimension.
See also: Line Item dimension
noncash flow transfer pricing methods
Transfer pricing methods that do not require the calculation of cash flows. While some of the noncash flow methods are available only with the Account tables data source, some are available with both the Account and Ledger table data sources.


option cost
The cost of optionality in terms of a spread over the transfer rate. Consider a mortgage that can be prepaid by the borrower at any time without penalty. Here the lender has granted the borrower an option to buy back the mortgage on par, even if interest rates have fallen in value. Thus, this option has a cost to the lender.


payment event
A set of payment characteristics, which define the time line and amount of a specific payment in a payment pattern.
payment pattern
A user-defined custom amortization pattern. Payment patterns allows the cash flow engine to correctly generate cash flows for instrument records that amortize in a nonstandard way. Payment Patterns are linked to instrument records through user-defined amortization type codes.
The phase in which the transfer pricing engine gathers information and prepares data structures for the run. This phase is only executed once per engine run.
prepayment methodologies
A set of methods used to model the prepayment behavior of amortizing instruments and quantify the associated prepayment risk.
prepayment risk
The possibility that borrowers might choose to repay part or all of their loan obligations before the scheduled due dates. Prepayments can be made by either accelerating principal payments, also known as curtailment, or refinancing.
Prepayment rule
A business rule used to manage the association of prepayment methodologies and rates to various product-currency combinations.
process control information
Information required to control processing, for example, a condition rule attached to a process rule. Process control information affects the rows or tables processed but not the results on those rows.
process data
Data required to produce results.
processing table
Account table available for, or included in, a Transfer Pricing Process rule run.
propagation pattern
Allows you to specify parameters, such as source tables, used in propagation of transfer rates and option costs, for any applicable instrument table from a prior period.
propagation process
The process for copying historical results, either transfer rates or option costs, or both, that were generated by the application in a previous run for a prior period, to the current period records.


rate conversion
A process, involving the use of conversion formula, for transforming interest rates from their starting format into a format proper for their use in any given process.
Rate Index rule
A business rule used to establish a relationship between an Interest Rate Code, typically a risk-free yield curve, and other Interest Rate Codes. Rate Index rule is used to generate forward rates for option cost calculations using stochastic interest rate models.
random number generation method
Method to determine how the Monte Carlo process selects random numbers. The random number generation method has two variations, low discrepancy and pseudorandom sequences.
range method
A prepayment rates lookup method. Under this method, the prepayment rates are determined by calculating a range of values on an axis. This method assumes that the prepayment speed remains the same for the entire range.
rate lookup
The procedure for deriving a transfer rate for the appropriate date-term combination from a particular yield curve.
rate spread
The fixed positive or negative spread from an Interest Rate Code or Note Rate, used to generate transfer rates in the Spread from Interest Rate and Spread from Note Rate methods.
reference currency
Currency in which the instrument data is expressed and designated by the currency code on the record. Within the application, the reference currency must be selected to indicate assumptions that will be applied to corresponding currency designations contained in the account data.Reference currency is also the currency with which an Interest Rate Code is associated. When you create an Interest Rate Code, you select the reference currency.
relative payment pattern
A type of payment pattern commonly used for modeling instruments with irregular payment frequencies or for instruments where the payment type changes over time.
See also: payment pattern
relative repricing pattern
A type of repricing pattern comprising a series of repricing events driven by user defined time lines. A relative repricing pattern is used for instruments where the repricing is determined by elapsed time since origination.
See also: repricing pattern
remaining term calculation mode
Allows you to calculate transfer rates and option costs for instrument records based on the remaining term of the instrument from the calendar period end date of the data, rather than the origination date or last repricing date of the instruments. This mode is one of the two calculation modes supported by Oracle Transfer Pricing.
repricing pattern
A user-defined custom repricing pattern. Repricing patterns allow the cash flow engine to correctly generate interest for instrument records that reprice in a nonstandard way. Repricing patterns are linked to instrument records through user-defined adjustable type codes.
A grouping of assumptions, also known as a business rule.
Rule of 78
An approach used by banks to formulate a loan amortization schedule. Also known as The Rule of the Sum of the Digits, this method of computing unearned interest is used on installment loans with add-on interest. The number 78 is based on the sum of the digits from 1 to 12. This approach causes a borrower to pay more interest at the beginning of the loan when there is more money owed and less interest as the obligation is reduced.


simple dimension
A dimension that does not have hierarchies or attributes. A simple dimension is just a list of members.
smoothing method
Method used to interpolate rates on the valuation curve for terms that fall between given points.
split payment pattern
A split pattern contains multiple sets of payment patterns under a single amortization code.
See also: payment pattern
The difference between the customer rate and the transfer rate or market rate (determined by a reference IRC).
standard calculation mode
Allows you to calculate transfer rates for instrument records based on the origination or last repricing date of the instruments. You can also use it to calculate option costs based on the origination date. This mode is one of the two calculation modes supported by Oracle Transfer Pricing.


terminal condition
A condition that has no other conditions nested under it.
Term Structure Model
Model for governing the generation of forward stochastic rates, discount factors for each scenario, and discrete rates for any maturity used in calculating the option-adjusted spread.
transfer pricing methodologies
A set of methods used to generate transfer rates for different types of instruments, including amortizing and nonamortizing instruments.
Transfer Pricing rule
A business rule used to manage the association of transfer pricing methodologies and certain parameters used in option costing to various product-currency combinations.
Transfer Pricing Process rule
A business rule used to formulate and execute transfer pricing or option cost processing requests.


user-defined dimension
A dimension that enables additional customization, beyond the standard dimensions provided by Oracle Enterprise Performance Foundation. Enterprise Performance Foundation provides user-defined dimensions that support hierarchies and attributes, as well as user-defined simple dimensions.
user-defined payment pattern
See: payment pattern
user-defined repricing pattern
See: repricing pattern


value set
A set of dimension members. Value sets are a component of the dimension identifier for some dimensions. The value set concept enables larger organizations to employ the same code to identify multiple dimensions across different regions. For example, in Europe, code 123 identifies Customer A, while the same code in the United States identifies Customer B.
A version of any of the Oracle Transfer Pricing business rules. Each rule version is effective dated and can also be named.


A collection of worksheets in Oracle Discoverer. A workbook contains data that is related in some way but organized to show different perspectives.For example, you might decide to create a workbook to show the sales history for Product A. However one worksheet could show sales for last month, another worksheet could show sales compared to the same month five years ago, and another could show sales per region. All three worksheets contain sales data related to Product A, but each is organized to show a different perspective.
A page or tab in Oracle Discoverer. A worksheet contains rows and columns of data and allows you to analyze and share it. Each worksheet is created by its own query. Every time you open or refresh a worksheet, Oracle Discoverer sends its query to the database to get the most current data.


yield curve term
The point on the yield curve that the system references to calculate transfer rates.