This chapter covers the following topics:
Leasing and Finance Management features both fixed and variable rate contracts. When authoring a fixed rate lease or loan contract, the implicit interest rate is calculated based on the payments you define on the contract. Based on those payments, Leasing and Finance Management calculates the implicit interest rate. On a fixed rate loan, you have the option to specify an interest rate for the contract, which is used to calculate the interest payments. You can define either a total loan payment , including combined principal and interest, or a principal payment and interest rate. When you choose to define a principal payment and interest rate, the interest rate defined is used to calculate the interest payment amounts. For variable rate contracts, you can associate an interest index to the contract, which is used to recalculate periodic payments or to recalculate the interest payments.
Based on the interest index associated to a contract, the applicable interest rate can change during the term of a contract, making it a variable rate contract. Leasing and Finance Management calculates the applicable interest rate and processes variable rate for a variety of contract types and interest scenarios. Leasing and Finance Management calculates variable interest based on the contract types defined. Contract types are determined by Book Classification, Tax Owner, Interest Calculation Basis, and Revenue Recognition Method. Leasing and Finance Management calculates variable interest for the following book classifications:
Leases
Loans
Leasing and Finance Management processes variable rate with the following conditions:
External stream generation must be set up.
Variable rate contracts cannot be initiated through lease applications or sales quotes.
Pools for sale to investors cannot include variable rate contracts or fixed rate loans.
Interest rate changes to contracts do not apply during the evergreen term.
Lease renewals are not permitted for loans.
Asset release is not permitted for loans.
Contract release is not permitted for loans.
Conversion to evergreen status is not permitted for loans.
Restructure quotes are not permitted for loans.
Transfer and assumptions are not permitted for loans.
Partial terminations for loans are not permitted when the revenue recognition method is Estimated and Billed or Actual.
Loan Paydown and Principal Paydown shall be permitted for the contract. Loan paydown and principal paydown payments are not specific to assets on the contract.
For Loans, when the interest calculation basis is Float and the revenue recognition method is Actual, the interest and principal may be billed on separate dates. In this case, two loan payment amounts shall be billed for the same billing period.
For a fixed rate lease, the implicit interest rate is based on the payments defined on the contract, and does not change during the life of the contract. For a variable rate lease contract, the payments are revised based on a interest index associated to the contract. Leasing and Finance Management features variable rate for Operating Leases, Direct Finance Leases, and Sales Type Leases.
The revenue recognition method for leases is Streams.
The interest calculation basis for variable rate leases are:
Reamortization
Float Factors
For fixed rate lease contracts, the payments do not change over the life of a contract as the interest rate is constant.
For a variable rate reamort lease, periodic payments are defined during booking. Reamortization is the automated process that solves for a new periodic payment amount based on the applicable interest rate for the contract and the remaining balance that will pay down the balance amount over the remaining term to zero, assuming no future change in interest rates.
Float Factor lease contracts include additional billing based on the applicable interest rate of the contract in addition to the periodic rent. The additional amount is billed using the float factor adjustment stream on the rent due date.
Before entering interest rate details for a lease contract, verify that the interest rate parameters are valid and supported. The following table describes what interest rate parameters are supported in Leasing and Finance Management for the following types of leases:
Operating Lease
Direct Finance Lease
Sales Type Lease
Note: For Conversion Basis fields, you can enter a value, but automatic processing of the conversions is not supported in Leasing and Finance Management.
| Parameters | Lease Type | Lease Type | Lease Type |
|---|---|---|---|
| Interest Calculation Basis | Fixed | Reamort | Float Factor |
| Revenue Recognition Method | Streams | Streams | Streams |
| Payment Type | Rent | Rent | Rent |
| Interest Index | N/A | Mandatory | Optional |
| Base Rate | N/A | Optional | Optional |
| Interest Start Date | N/A | Mandatory | Mandatory |
| Adder Rate | N/A | Mandatory | Optional |
| Maximum Rate | N/A | Mandatory | Optional |
| Minimum Rate | N/A | Mandatory | Optional |
| Principal Basis | N/A | Scheduled | Scheduled |
| Days in a Month | N/A | 30 | Optional |
| Days in a Year | N/A | 360 | Optional |
| Interest Basis | N/A | Simple | N/A |
| Rate Delay | N/A | Optional | Optional |
| Rate Delay Frequency | N/A | Optional | Optional |
| Compounding Frequency | N/A | N/A | Optional |
| Formula Name | N/A | N/A | Mandatory |
| Rate Change Start Date | N/A | Optional | Optional |
| Rate Change Frequency | N/A | Optional | Optional |
| Rate Change Value | N/A | Optional | Optional |
| Conversion Options | Optional | Optional | Optional |
| Next Conversion Date | Optional | Optional | Optional |
| Conversion Type | Optional | Optional | Optional |
The following section explains the most common variable rate lease scenarios.
In this scenario the rent payment is defined on the contract at the time of booking. On the billing schedule, if there is a change in the applicable interest rate, the new rate is used to calculate the future payments and rebook the contract. The rent is billed on the Rent schedule.
The Create Receivables Variable Rate Invoices program should be run for each billing period to reamortize the contract. The program will recalculate the future payments and rebook the contract with the revised payments.
The following table describes contract conditions for reamortizing a lease contract on an interest rate change.
| Contract Conditions | Description |
|---|---|
| Applicability | Applies to Operating Leases, Direct Finance Leases, and Sales Type Leases. |
| Rate Change | Interest rate can change only on the scheduled billing date. |
| Process | Recalculate payments based on new interest rate for the balance term. Rebook contract with revised payments and regenerate amortization schedule. |
| Billing | Billing is done from schedule. |
| Cash | Cash is applied to invoices. |
| Revenue | Revenue is recognized based on income streams generated. |
| Interest Calculation Basis | Reamort |
| Revenue Recognition Method | Streams |
Setup steps must be completed before variable rate contracts can be processed. The following table describes setup requirements for a reamortization lease contract on a rate change.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Use streams applicable by book class for fixed rate contracts. |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Lease |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Reamort |
| Revenue Recognition Method | Stream Generation Template | Streams |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Templates | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. |
| Quality Values | Financial Product | Book Classification and Tax Owner are as applicable. Interest Calculation Method is Reamort. Revenue Recognition Basis is Streams. |
| Accrual Streams | Financial Product | Use streams applicable by book class for fixed rate contracts. |
| Validations | Financial Product | Quality values must match the stream generation template. |
When authoring your contract, only a level Payment Schedule is permitted for reamort leases.
When processing a reamortization on rate change for a variable rate lease, complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Create Interest Rate Details. |
| 2. Associate Financial Product with correct Quality Values | See Define Streams and Pricing. |
| 3. Activate the Contract | See Contract Authoring. |
| 4. Run the Variable Rate Billing process | See Variable Rate Billing. |
| 5. Run the Generate Accruals process | See Processes. |
The following table shows what contract transactions are allowed for a variable rate reamort lease on a rate change
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. Current dated and prospective changes are permitted to additional interest rate parameters. |
| Principal Paydown | Not applicable for leases. |
| Loan Paydown | Not applicable for leases. |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | Non-financial updates can be made. |
In this scenario, a periodic rent payment is defined during booking, which does not change during the term of the contract. Additionally, a float factor formula is associated to the contract. On the rent schedule, the float factor formula is computed based on the applicable interest rate of the contract and the amount derived is billed using a float factor stream.
The Create Receivables Variable Rate Invoices program should be run for each rental period to calculate the additional float factor adjustment amount. The program will solve the formula associated to the contract and create a Float Factor Adjustment stream for the derived amount. The Float Factor Adjustment stream will be billed using the standard billing programs for Leasing and Finance Management.
| Contract Conditions | Description |
|---|---|
| Applicability | Applies to Operating Leases, Direct Finance Leases, and Sales Type Leases. |
| Rate Change | Interest rate can change as defined by the user. |
| Process | Interest adjustments calculated for interest rate changes by solving a formula to be defined by user. |
| Billing | Billing done on rent schedule. Adjustments are calculated by solving formula. |
| Cash | Cash is applied to invoices. |
| Revenue | Revenue is recognized based on income streams generated. Float Factor Adjustment amount is recognized as income. |
| Interest Calculation Basis | Float Factor |
| Revenue Recognition Method | Streams |
Setup steps must be completed before variable rate contracts can be processed. The following table describes setup requirements for a Float Factor lease contract on a rate change.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Use streams applicable by book class for fixed rate contracts. Use Float Factor Adjustment for billing interest adjustment amounts. |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Operating Lease, Direct Finance Lease, or Sales Type Lease |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Float Factors |
| Revenue Recognition Method | Stream Generation Template | Streams |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. Use Float Factor Adjustment as a dependent of Rent. |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Template | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. Setup accounting templates for Float Factor Adjustment stream for both billing and accrual transaction types. |
| Quality Values | Financial Product | Book Classification and Tax Owner are as applicable. Interest Calculation Method is Float Factor. Revenue Recognition Basis is Streams. |
| Accrual Streams | Financial Product | Use streams applicable by book class for fixed rate contracts. Float Factor Adjustment stream to be setup on financial product for accrual. |
| Validations | Financial Product | Quality values must match the stream generation template. |
When processing a rate change for a float factor lease, complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Contract Authoring. |
| 2. Associate Financial Product with correct Quality Values | See Financial Product. |
| 3. Define Applicable Interest Rate Parameters | See Create Interest Rate Details. |
| 4. Activate the Contract | See Contract Authoring. |
| 5. Run the Variable Rate Billing process | Run Create Receivables Variable Rate Invoices. The float factor adjustment amount is calculated and stored as a stream for billing. See Billing. |
| 6. Run the Bill Processing Program Set | See Billing. |
| 7. Run the Generate Accruals process | Generate Accruals - Streams. Streams defined for accrual are accounted as revenue. Float Factor Adjustment stream amount is accounted as revenue. |
| 6. Terminate Expired Contracts | Variable rate processing must be completed prior to the termination of a contract. |
The following table shows what contract transactions are allowed for a Float Factor lease on a rate change.
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. |
| Principal Paydown | Not applicable for leases. |
| Loan Paydown | Not applicable for leases. |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | No financial updates are permitted. |
Leasing and Finance Management supports fixed rate and variable rate loan contracts. For a fixed rate loan, the implicit interest rate does not change during the life of the contract. For a variable rate contract, the payments may be revised based on an interest index associated to the contract. Contracts with a revenue recognition method of Actual are also referred to as Per Diem Loans.
The processing of variable rate contracts will differ based on the interest calculation basis and the revenue recognition method defined. Interest calculation basis determines whether the actual or scheduled principal balance should be used to calculate interest for a variable rate contract. The revenue recognition method determines whether the actual or scheduled principal balance should be used to account for income.
The following table shows interest calculation basis and revenue recognition method combinations for variable rate loan contracts.
| Interest Calculation Basis | Revenue Recognition Method |
|---|---|
| Fixed | Actual |
| Float | Estimated and Billed Actual |
| Reamort | Streams Actual |
| Catchup/Cleanup | Streams |
Leasing and Finance Management calculates variable rate loans based on the following types.
The following section describes common Leasing and Finance Management variable rate loan types.
For a fixed rate loan, the periodic payment amounts to be billed do not change over the life of a contract, as the interest rate is constant. If the revenue recognition method is Actual, the loan is processed as a variable rate contract. The interest amount recognized as income is based on the applicable interest rate and payment received for the contract. The interest amount to be accrued is calculated based on the actual principal balance of the loan. The payment is first applied towards interest and the remaining payment amount is applied to the principal balance of the contract.
For a floating rate loan, the principal payment amounts are determined during booking and do not change over the life of the contract. The interest amounts are calculated and billed periodically based on the applicable interest rate of the contract. The interest rate on the loan may change during the lifetime of the contract, at a frequency different to the billing frequency. Principal and Interest are billed on the Principal schedule and the Interest schedule respectively. The actual interest amount is recognized as income. If the actual interest has not been calculated for a period, an estimated interest amount is accrued, which is reversed in the following period.
For a floating rate loan where the revenue recognition method is Actual, the principal payment amounts are determined during booking. The interest amounts are calculated periodically based on the applicable interest rate of the contract. The interest rate on the loan may change during the lifetime of the contract, at a frequency different to the billing frequency. The sum of the principal payment and the calculated interest amount for a given period is billed as Variable Loan Payment.
The interest amount recognized as income is based on the applicable interest rate and payment received for the contract. The interest amount to be accrued is calculated based on the actual principal balance of the loan. The payment is first applied towards interest and the remaining payment amount is applied to the principal balance of the contract.
For a reamort loan, periodic payments are defined during booking. The Principal and Interest payment streams are generated during booking. On the billing schedule, if there is a change in the applicable interest rate then the new rate is used to calculate the future payments and rebook the contract. Principal and Interest is billed on the payment schedule. Interest income is accrued at the end of each month.
For a reamort loan where the revenue recognition method is Actual, periodic payments are defined during booking. On the billing schedule, if there is a change in the applicable interest rate then the new rate is used to calculate the future payments and rebook the contract. Loan payment is billed on the payment schedule.
The interest amount recognized as income is based on the applicable interest rate and payment received for the contract. The interest amount to be accrued is calculated based on the actual principal balance of the loan. The payment is first applied towards interest and the remaining payment amount is applied to the principal balance of the contract.
For a Catchup/Cleanup loan, periodic payments are defined during booking. Principal payment, Interest payment and Income accrual streams are generated at the time of booking the contract. Principal and Interest are billed on the Principal schedule and the Interest schedule respectively. The actual principal balance is used as the basis of catchup calculation. The actual interest is calculated during catchup processing at the catchup frequency. If the actual interest amount exceeds the estimated interest, the difference is billed. If the estimated interest amount exceeds the actual interest calculated, then the amount can either be refunded, adjusted against principal or stored against the contract.
The Income accrual stream is used to recognize income based on the estimated interest at the end of each month. The additional interest amount billed is also recognized as income, on the catchup frequency.
Before entering interest rate details for a loan contract, verify that the interest rate parameters are valid and supported. The following tables describe what interest rate parameters are supported in Leasing and Finance Management for the following types of loans:
Fixed Loans
Floating Loans
Reamortization Loans
Catchup/Cleanup Loans
Revolving Loans
Note: For Conversion Basis fields, you can enter a value, but automatic processing of the conversions is not supported in Leasing and Finance Management.
| Parameters | LoanType | LoanType | LoanType | LoanType |
|---|---|---|---|---|
| Interest Calculation Basis | Fixed | Fixed | Fixed | Fixed |
| Revenue Recognition Method | Streams | Streams | Actual | Actual |
| Payment Type | Rent | Principal | Rent | Principal |
| Interest Index | N/A | N/A | Mandatory | Mandatory |
| Base Rate | N/A | Mandatory | Optional | Mandatory |
| Interest Start Date | N/A | N/A | Mandatory | Mandatory |
| Adder Rate | N/A | N/A | Mandatory | Mandatory |
| Maximum Rate | N/A | N/A | Mandatory | Mandatory |
| Minimum Rate | N/A | N/A | Mandatory | Mandatory |
| Principal Basis | N/A | N/A | Actual | Actual |
| Days in a Month | Optional | Optional | Mandatory | Mandatory |
| Days in a Year | Optional | Optional | Mandatory | Mandatory |
| Interest Basis | N/A | N/A | Mandatory | Mandatory |
| Rate Delay | N/A | N/A | Optional | Optional |
| Rate Delay Frequency | N/A | N/A | Optional | Optional |
| Compounding Frequency | N/A | N/A | Optional | Optional |
| Formula Name | N/A | N/A | Optional | Optional |
| Rate Change Start Date | N/A | N/A | Optional | Optional |
| Rate Change Frequency | N/A | N/A | Optional | Optional |
| Rate Change Value | N/A | N/A | Optional | Optional |
| Conversion Options | Optional | Optional | Optional | Optional |
| Next Conversion Date | Optional | Optional | Optional | Optional |
| Conversion Type | Optional | Optional | Optional | Optional |
| Parameters | LoanType | LoanType | LoanType | LoanType |
|---|---|---|---|---|
| Interest Calculation Basis | Float | Float | Float | Float |
| Revenue Recognition Method | Estimated/Billed | Estimated/Billed | Actual | Actual |
| Payment Type | Rent | Principal | Rent | Principal |
| Interest Index | Mandatory | Mandatory | Mandatory | Mandatory |
| Base Rate | Optional | Mandatory | Optional | Mandatory |
| Interest Start Date | Mandatory | Mandatory | Mandatory | Mandatory |
| Adder Rate | Mandatory | Mandatory | Mandatory | Mandatory |
| Maximum Rate | Mandatory | Mandatory | Mandatory | Mandatory |
| Minimum Rate | Mandatory | Mandatory | Mandatory | Mandatory |
| Principal Basis | Actual/Scheduled | Actual/Scheduled | Actual | Actual |
| Days in a Month | Mandatory | Mandatory | Mandatory | Mandatory |
| Days in a Year | Mandatory | Mandatory | Mandatory | Mandatory |
| Interest Basis | Mandatory | Mandatory | Mandatory | Mandatory |
| Rate Delay | Optional | Optional | Optional | Optional |
| Rate Delay Frequency | Optional | Optional | Optional | Optional |
| Compounding Frequency | Optional | Optional | Optional | Optional |
| Formula Name | Optional | Optional | Optional | Optional |
| Rate Change Start Date | Optional | Optional | Optional | Optional |
| Rate Change Frequency | Optional | Optional | Optional | Optional |
| Rate Change Value | Optional | Optional | Optional | Optional |
| Conversion Options | Optional | Optional | Optional | Optional |
| Next Conversion Date | Optional | Optional | Optional | Optional |
| Conversion Type | Optional | Optional | Optional | Optional |
| Parameters | LoanType | LoanType | LoanType | LoanType |
|---|---|---|---|---|
| Interest Calculation Basis | Reamort | Reamort | Reamort | Reamort |
| Revenue Recognition Method | Streams | Streams | Actual | Actual |
| Payment Type | Rent | Principal | Rent | Principal |
| Interest Index | Mandatory | Mandatory | Mandatory | Mandatory |
| Base Rate | Optional | Mandatory | Optional | Mandatory |
| Interest Start Date | Mandatory | Mandatory | Mandatory | Mandatory |
| Adder Rate | Mandatory | Mandatory | Mandatory | Mandatory |
| Maximum Rate | Mandatory | Mandatory | Mandatory | Mandatory |
| Minimum Rate | Mandatory | Mandatory | Mandatory | Mandatory |
| Principal Basis | Scheduled | Scheduled | Scheduled | Scheduled |
| Days in a Month | 30 | 30 | Mandatory | Mandatory |
| Days in a Year | 360 | 360 | Mandatory | Mandatory |
| Interest Basis | Simple | Simple | Simple | Simple |
| Rate Delay | Optional | Optional | Optional | Optional |
| Rate Delay Frequency | Optional | Optional | Optional | Optional |
| Rate Change Start Date | Optional | Optional | Optional | Optional |
| Rate Change Frequency | Optional | Optional | Optional | Optional |
| Rate Change Value | Optional | Optional | Optional | Optional |
| Conversion Options | Optional | Optional | Optional | Optional |
| Next Conversion Date | Optional | Optional | Optional | Optional |
| Conversion Type | Optional | Optional | Optional | Optional |
| Parameters | LoanType | LoanType |
|---|---|---|
| Interest Calculation Basis | Catchup/Cleanup | Catchup/Cleanup |
| Revenue Recognition Method | Streams | Streams |
| Payment Type | Rent | Principal |
| Interest Index | Mandatory | Mandatory |
| Base Rate | Optional | Mandatory |
| Interest Start Date | Mandatory | Mandatory |
| Adder Rate | Mandatory | Mandatory |
| Maximum Rate | Mandatory | Mandatory |
| Minimum Rate | Mandatory | Mandatory |
| Principal Basis | Actual | Actual |
| Days in a Month | Mandatory | Mandatory |
| Days in a Year | Mandatory | Mandatory |
| Interest Basis | Mandatory | Mandatory |
| Rate Delay | Optional | Optional |
| Rate Delay Frequency | Optional | Optional |
| Compounding Frequency | N/A | N/A |
| Formula Name | N/A | N/A |
| Catch-up Basis | Actual | Actual |
| Catch-up Start Date | Mandatory | Mandatory |
| Catch-up Frequency | Mandatory | Mandatory |
| Catch-up Settlement | Mandatory | Mandatory |
| Rate Change Start Date | Optional | Optional |
| Rate Change Frequency | Optional | Optional |
| Rate Change Value | Optional | Optional |
| Conversion Options | Optional | Optional |
| Next Conversion Date | Optional | Optional |
| Conversion Type | Optional | Optional |
| Parameters | LoanType | LoanType |
|---|---|---|
| Interest Calculation Basis | Float | Float |
| Revenue Recognition Method | Estimated/Billed | Actual |
| Payment Type | None | None |
| Interest Index | Mandatory | Mandatory |
| Base Rate | Mandatory | Mandatory |
| Interest Start Date | Mandatory | Mandatory |
| Adder Rate | Mandatory | Mandatory |
| Maximum Rate | Mandatory | Mandatory |
| Minimum Rate | Mandatory | Mandatory |
| Principal Basis | Actual | Actual |
| Days in a Month | Mandatory | Mandatory |
| Days in a Year | Mandatory | Mandatory |
| Interest Basis | Mandatory | Mandatory |
| Rate Delay | Optional | Optional |
| Rate Delay Frequency | Optional | Optional |
| Compounding Frequency | Optional | Optional |
| Formula Name | Optional | Optional |
| Rate Change Start Date | Optional | Optional |
| Rate Change Frequency | Optional | Optional |
| Rate Change Value | Optional | Optional |
| Conversion Options | Optional | Optional |
| Next Conversion Date | Optional | Optional |
| Conversion Type | Optional | Optional |
Periodic payments are defined on the contract. Loan payment schedule is generated at the time of booking the contract. The actual interest is calculated on Receipt of cash based on the actual principal balance. The receipt is applied first towards the interest amount and then to the principal. Actual interest is accrued as and when the accrual program is run. The actual interest is recalculated up to the accrual date and the difference between the actual interest accounted till date and actual interest calculated is accrued.
The following table describes contract conditions for a Fixed Amount Billed Periodically with Principal Reduction on Receipt of Cash loan.
| Contract Conditions | Description |
|---|---|
| Applicability | Loans |
| Rate Change | Interest rate shall change based on the index and contract setup. |
| Process | Interest is calculated on cash receipt. Cash receipt is applied to interest first, balance is applied to principal. |
| Billing | Billing is done on original schedule. |
| Cash | Interest is calculated on cash receipt. Cash receipt is applied to interest first, balance is applied to principal. |
| Revenue | Calculated on actual principal balance with applicable rate. |
| Interest Calculation Basis | Fixed |
| Revenue Recognition Method | Actual |
Setup steps must be completed before variable rate contracts can be processed. The following table describes setup requirements for a variable rate loan where a fixed amount billed periodically with principal reduction on receipt of cash loan.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual - to accrue actual income Variable Loan Payment - for billing calculated principal and interest amount Daily Interest - Interest - for actual interest amounts Daily Interest - Principal - for actual principal amounts Excess Interest Paid - for excess interest recovered Excess Loan Payment Paid - for excess loan payment recovered Excess Principal Paid - for excess principal recovered Unscheduled Loan Payment - for loan paydown Unscheduled Principal Payment - for principal paydown |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Loans |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Fixed |
| Revenue Recognition Method | Stream Generation Template | Actual |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual as a dependent of Rent Daily Interest - Interest as a dependent of Rent Daily Interest - Principal as a dependent of Rent Excess Interest Paid as a dependent of Rent Excess Loan Payment Paid as a dependent of Rent Excess Principal Paid as a dependent of Rent Unscheduled Loan Payment as a dependent of Rent Unscheduled Principal Payment as a dependent of Rent Variable Loan Payment as a dependent of Rent |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Templates | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual for transaction type Accrual Daily Interest - Interest for transaction type Receipt Application Daily Interest - Principal for transaction type Receipt Application Variable Loan Payment for transaction type Billing Unscheduled Loan Payment for transaction type Billing Unscheduled Principal Payment for transaction type Billing |
| Quality Values | Financial Product | Book Classification is Loan. Tax Owner is Lessee. Interest Calculation Basis Fixed. Revenue Recognition Method is Actual. |
| Accrual Streams | Financial Product | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual Stream |
| Validations | Financial Product | Quality values must match the stream generation template. |
In order to process a variable rate loan for a Fixed Amount Billed Periodically with Principal Reduction on Receipt of Cash , complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Contract Authoring. |
| 2. Associate Financial Product with correct Quality Values | See Define Financial Product. |
| 3. Define Applicable Interest Rate Parameters | See Create Interest Rate Details. |
| 4. Activate the Contract | See Contract Authoring. |
| 5. Run Bill Processing Program Set | See Billing. |
| 6. Run the Generate Accruals process | Generate Accruals - Actual. Streams defined for accrual are accounted as revenue. |
| 7. Create Receipts | See Receipts and Invoices. |
| 8. Run Daily Interest Calculation Program | See Processes. |
| 9. Terminate Expired Contracts | Daily Interest Calculation must be completed prior to termination or expiration of contract. |
The following table shows what contract transactions are allowed for a variable rate contract when a fixed amount is billed periodically with principal reduction on receipt of cash.
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. |
| Principal Paydown | Permitted |
| Loan Paydown | Permitted |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | Non-financial updates can be made. |
The periodic payments are defined on the contract and a Variable Interest Schedule is generated at the time of booking the contract. Actual or Scheduled Principal Balance may be defined as the basis of interest calculation. The actual interest is calculated at the time of Billing. Principal and Interest are billed on Principal schedule and Interest schedule respectively.
| Contract Conditions | Description |
|---|---|
| Applicability | Loan or Revolving Loan |
| Rate Change | Interest rate shall change based on the index and contract setup. |
| Process | Variable interest billing schedule may defer to principal billing schedule . Interest calculated for billing on variable interest schedule. |
| Billing | Principal billing done on original schedule. Interest rate changes are billed on the variable interest schedule. |
| Cash | Cash is applied to invoices. |
| Revenue | Income is estimated from the last billed date to the accounting period close. Estimated income is reversed in the next accounting period. Interest billed is accounted as income. |
| Interest Calculation Basis | Float |
| Revenue Recognition Method | Estimated and Billed |
Setup steps must be completed before variable rate contracts can be processed. The following table describes setup requirements for Calculate Interest Billing on Rate Change.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Streams applicable by book class for fixed rate contracts. Variable Interest - for billing calculated interest amounts. Interest Payment - should be non billable as interest payment stream is not billed. Variable Interest Income - to accrue estimated income Unscheduled Principal Payment - for principal paydown |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Loan, Revolving Loan |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Float |
| Revenue Recognition Method | Stream Generation Template | Estimated and Billed |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. Variable Interest as a dependent of Rent. Interest Payment as a dependent of Rent. Variable Interest Income as a dependent of Rent. Unscheduled Principal Payment as a dependent of Rent. |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Templates | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. Variable Interest for transaction type Billing. Variable Interest for transaction type Accrual. Variable Interest Income for transaction type Accrual. Unscheduled Principal Payment for transaction type Billing. |
| Quality Values | Financial Product | Book Classification is Loan or Revolving Loan. Tax Owner is Lessee. Interest Calculation Basis is Float. Revenue Recognition Method is Estimated and Billed. |
| Accrual Streams | Financial Product | Use streams applicable by book class for fixed rate contracts. Variable Interest for billed interest. Variable Interest Income for estimated interest. |
| Validations | Financial Product | Quality values must match the stream generation template. |
In order to calculate the actual interest on rate change for variable rate contracts with an interest calculation of Float, complete the procedures in the following table.
When you calculate variable rate for Calculate Interest Billing on Applicable Rates, complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Contract Authoring. |
| 2. Associate Financial Product with correct Quality Values | See Define Financial Product. |
| 3. Define Applicable Interest Rate Parameters | See Create Interest Rate Details. |
| 4. Activate the Contract | See Contract Authoring. |
| 5. Run the Variable Rate Billing process | Run Create Receivables Variable Rate Invoices. Actual interest amounts are calculated. |
| 6. Run the Bill Processing Program Set | See Billing. |
| 7. Run the Generate Accruals process | Generate Accruals - Estimated and Billed. Income is estimated from the last billed date to the accounting period close. Estimated income is reversed in the next accounting period. Interest billed is accounted as income. |
| 8. Terminate Expired Contracts | Variable rate processing must be completed prior to the termination of an expired contract. |
The following table shows what contract transactions are allowed for variable rate contracts when the interest calculation is Float.
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. Current dated and prospective changes are permitted to additional interest rate parameters. |
| Principal Paydown | Permitted |
| Loan Paydown | Not applicable |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | No financial updates are permitted. |
The following table describes contract conditions for a variable rate contract when the amount billed varies on change of interest rate with principal reduction on receipt of cash.
| Contract Conditions | Description |
|---|---|
| Applicability | Loans, Revolving Loans |
| Rate Change | Interest rate shall change based on the index and contract setup. |
| Process | Billing amount is derived from original principal schedule and calculated interest. Interest is recalculated on cash receipt . Cash receipt is applied to interest first, balance is applied to principal. |
| Billing | Principal billing is done on original schedule. Interest is calculated and billed. |
| Cash | Interest is calculated on cash receipt. Cash receipt is applied to interest first, balance is applied to principal. |
| Revenue | Calculated on actual principal balance with applicable rate. |
| Interest Calculation Basis | Float |
| Revenue Recognition Method | Actual |
Setup steps must be completed before variable rate contracts can be processed. The following table describes setup requirements for a variable rate loan when the interest amount varies on change of interest rate with principal reduction on receipt of cash loan.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual - to accrue actual income Variable Loan Payment - for billing calculated principal and interest amount Daily Interest - Interest - for actual interest amounts Daily Interest - Principal - for actual principal amounts Excess Interest Paid - for excess interest recovered Excess Loan Payment Paid - for excess loan payment recovered Excess Principal Paid - for excess principal recovered Unscheduled Loan Payment - for loan paydown Unscheduled Principal Payment - for principal paydown |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Loans, Revolving Loans |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Float |
| Revenue Recognition Method | Stream Generation Template | Actual |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual as a dependent of Rent Daily Interest - Interest as a dependent of Rent Daily Interest - Principal as a dependent of Rent Excess Interest Paid as a dependent of Rent Excess Loan Payment Paid as a dependent of Rent Excess Principal Paid as a dependent of Rent Unscheduled Loan Payment as a dependent of Rent Unscheduled Principal Payment as a dependent of Rent Variable Loan Payment as a dependent of Rent |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Templates | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual for transaction type Accrual Daily Interest - Interest for transaction type Receipt Application Daily Interest - Principal for transaction type Receipt Application Variable Loan Payment for transaction type Billing Unscheduled Loan Payment for transaction type Billing Unscheduled Principal Payment for transaction type Billing |
| Quality Values | Financial Product | Book Classification is Loan or Revolving Loan. Tax Owner is Lessee. Interest Calculation Basis is Float. Revenue Recognition Method is Actual. |
| Accrual Streams | Financial Product | Actual Income Accrual Stream |
| Validations | Financial Product | Quality values must match the stream generation template. |
In order to process a variable rate loan for an interest amount varies on change of interest rate with principal reduction on receipt of cash, complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Contract Authoring. |
| 2. Associate Financial Product with correct Quality Values | See Define Financial Product. |
| 3. Define Applicable Interest Rate Parameters | See Create Interest Rate Details. |
| 4. Activate the Contract | See Contract Authoring. |
| 5. Run the Variable Rate Billing process | Create Receivables Variable Rate Invoices. Interest bill amounts are calculated. |
| 6. Run Bill Processing Program Set | See Processes. |
| 7. Run Generate Accruals Process | Generate Accruals - Actual Streams defined for accrual are accounted as revenue. |
| 8. Create Receipts | See Receipts and Invoices. |
| 9. Run Daily Interest Calculation Program | See Processes |
| 10. Terminate Expired Contracts | Daily Interest Calculation must be completed prior to termination or expiration of contract. |
The following table shows what contract transactions are allowed for a variable rate contract when the interest amount varies on change of interest rate with principal reduction on receipt of cash.
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. |
| Principal Paydown | Permitted |
| Loan Paydown | Permitted |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | Non-financial updates can be made. |
In this example, the periodic payments are defined on the contract at the time of booking. On the billing schedule, if there is a change in the applicable interest rate, the new rate is used to calculate the new periodic payment amount based on the current principal balance that will pay down the principal balance over the remaining original term of the contract to a zero balance assuming no future change in indexed rates.
The Create Receivables Variable Rate Invoices program should be run for each billing period to reamortize the contract. The program will recalculate the future payments and rebook the contract with the revised payments.
The following table describes contract conditions for reamortizing a loan contract on an interest rate change.
| Contract Conditions | Description |
|---|---|
| Applicability | Loans |
| Rate Change | Interest rate can change only on the scheduled billing date. |
| Process | Recalculate payments based on new interest rate for the balance term. Rebook contract with revised payments, regenerate amortization schedule, generate accrual and billing adjustments, if applicable |
| Billing | Billing is done from schedule. |
| Cash | Cash is applied to invoices. |
| Revenue | Revenue is recognized based on income streams generated. |
| Interest Calculation Basis | Reamort |
| Revenue Recognition Method | Streams |
Setup steps must be completed before variable rate contracts can be processed. The following table describes setup requirements for a reamortization loan contract on a rate change.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Use streams applicable by book class for fixed rate contracts. |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Loan |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Reamort |
| Revenue Recognition Method | Stream Generation Template | Streams |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Templates | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. |
| Quality Values | Financial Product | Book Classification and Tax Owner are as applicable. Interest Calculation Basis is Reamort. Revenue Recognition Method is Streams. |
| Accrual Streams | Financial Product | Use streams applicable by book class for fixed rate contracts. |
| Validations | Financial Product | Quality values must match the stream generation template. |
When authoring your contract, only a level payment schedule is supported for reamort loans.
When processing a reamortization on rate change for a variable rate loan, complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Contract Authoring. |
| 2. Associate Financial Product with correct Quality Values | See Define Financial Product. |
| 3. Activate the Contract | See Contract Authoring. |
| 4. Run the Variable Rate Billing process | See Billing. |
| 5. Run the Generate Accruals process | See Processes. |
The following table shows what contract transactions are allowed for a variable rate reamort loan on a rate change.
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. Current dated and prospective changes are permitted to additional interest rate parameters. |
| Principal Paydown | Applicable for loans |
| Loan Paydown | Not applicable for loans where the revenue recognition method is Streams. |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | Non-financial updates can be made. |
In this scenario, the rent payment is defined on the contract at the time of booking. On the billing schedule, if there is a change in the applicable interest rate, the new rate is used to calculate the future payments and rebook the contract. The rent is billed on the Rent schedule.
The actual interest is calculated on Receipt of cash based on the actual principal balance. The receipt is applied first towards the interest amount and then to the principal. Actual interest is accrued as and when the accrual program is run. The actual interest is recalculated up to the accrual date and the difference between the actual interest accounted till date and actual interest calculated is accrued.
The Create Receivables Variable Rate Invoices program should be run for each billing period to reamortize the contract. The program will recalculate the future payments and rebook the contract with the revised payments.
The following table describes contract conditions for a Reamortize Contract on Rate Change with Principal Reduction on Receipt of Cash loan.
| Contract Conditions | Description |
|---|---|
| Applicability | Loans |
| Rate Change | Interest rate can only change on the scheduled billing date. |
| Process | Recalculate payments based on new interest rate for the balance term. Rebook contract with revised payments, regenerate amortization schedule, generate accrual and billing adjustments, if applicable Interest is recalculated on cash receipt. Cash receipt is applied to interest first, balance is applied to principal. |
| Billing | Billing is done from schedule. |
| Cash | Interest is calculated on cash receipt. Cash receipt is applied to interest first, balance is applied to principal. |
| Revenue | Calculated on actual principal balance with applicable rate. |
| Interest Calculation Basis | Reamort |
| Revenue Recognition Method | Actual |
Setup steps must be completed before a variable rate contract can be processed The following table describes setup requirements for a Reamortize Contract on Rate Change with Principal Reduction on Receipt of Cash loan.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual - to accrue actual income Variable Loan Payment - for billing calculated principal and interest amount Daily Interest - Interest - for actual interest amounts Daily Interest - Principal - for actual principal amounts Excess Interest Paid - for excess interest recovered Excess Loan Payment Paid - for excess loan payment recovered Excess Principal Paid - for excess principal recovered Unscheduled Loan Payment - for loan paydown Unscheduled Principal Payment - for principal paydown |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Loans |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Reamort |
| Revenue Recognition Method | Stream Generation Template | Actual |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual as a dependent of Rent Daily Interest - Interest as a dependent of Rent Daily Interest - Principal as a dependent of Rent Excess Interest Paid as a dependent of Rent Excess Loan Payment Paid as a dependent of Rent Excess Principal Paid as a dependent of Rent Unscheduled Loan Payment as a dependent of Rent Unscheduled Principal Payment as a dependent of Rent Variable Loan Payment as a dependent of Rent |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Templates | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. Actual Income Accrual for transaction type Accrual Daily Interest - Interest for transaction type Receipt Application Daily Interest - Principal for transaction type Receipt Application Variable Loan Payment for transaction type Billing Unscheduled Loan Payment for transaction type Billing Unscheduled Principal Payment for transaction type Billing |
| Quality Values | Financial Product | Book Classification is Loan. Tax Owner is Lessee. Interest Calculation Basis is Reamort. Revenue Recognition Method is Actual. |
| Accrual Streams | Financial Product | Actual Income Accrual |
| Validations | Financial Product | Quality values must match the stream generation template. |
When processing a reamortization on a rate change for a variable rate loan on rate change with principal reduction on receipt of cash, complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Contract Authoring. |
| 2. Associate Financial Product with correct Quality Values | See Define Financial Product. |
| 3. Define Applicable Interest Rate Parameters | See Create Interest Rate Details. |
| 4. Activate the Contract | See Contract Authoring. |
| 5. Run the Variable Rate Billing process | Create Receivables Variable Rate Invoices. Revised payments are calculated if interest rate has changed. Contract is rebooked after applying the revised payments. |
| 6. Run Bill Processing Program Set | See Processes. |
| 7. Run Generate Accruals Process | Generate Accruals - Actual Streams defined for accrual are accounted as revenue. |
| 8. Create Receipts | See Receipts and Invoices. |
| 9. Run Daily Interest Calculation Program | See Processes. |
| 10. Terminate Expired Contracts | Daily Interest Calculation must be completed prior to termination or expiration of contract. |
The following table shows what contract transactions are allowed for a reamortization contract on rate change with principal reduction on receipt of cash.
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. |
| Principal Paydown | Permitted |
| Loan Paydown | Permitted |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | Non-financial updates can be made. |
Periodic payments are defined on the contract. Principal payment, Interest payment, and Income Accrual streams are generated at the time of booking the contract. Principal and Interest are billed on Principal schedule and Interest schedule respectively. Actual principal balance is used as the basis of catchup calculation. The Income Accrual stream is used to accrue the estimated interest at the end of each month. The actual interest is calculated on the catchup frequency and difference between the estimated and billed amount can be refunded, adjusted or not adjusted against principal if in excess, or billed if the interest was short.
The following table describes contract conditions for Catchup Interest on a Separate Schedule to Regular Billing.
| Contract Conditions | Description |
|---|---|
| Applicability | Loans |
| Rate Change | Interest rate shall change based on the index and contract setup. |
| Process | Billing is done on the original schedule. Interest rate changes are calculated on a separate schedule. |
| Billing | Billing is done from schedule for principal and other streams. Interest rate changes are billed on the catchup frequency. |
| Cash | Cash is applied to invoices. |
| Revenue | Revenue is recognized based on income streams generated. Interest rate changes are calculated and billed and also accounted as income. |
| Interest Calculation Basis | Catchup/Cleanup |
| Revenue Recognition Method | Streams |
Setup steps must be completed before variable rate contracts can be processed. The following table describes setup requirements for Catchup Interest on a Separate Schedule to Regular Billing.
| Setup Step | Location/Link | Description |
|---|---|---|
| Stream Purpose | Stream Types | Use streams applicable by book class for fixed rate contracts. Interest Catchup - for billing calculated interest amounts. Principal Catchup - for adjusting principal amounts. Unscheduled Principal Payment - for principal paydown. |
| Pricing Method | Stream Generation Template | External only |
| Book Classification | Stream Generation Template | Loans |
| Tax Owner | Stream Generation Template | As applicable |
| Interest Calculation Basis | Stream Generation Template | Catchup/Cleanup |
| Revenue Recognition Method | Stream Generation Template | Streams |
| Primary | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. |
| Dependent | Stream Generation Template | Use streams applicable by book class for fixed rate contracts. Interest Catchup as a dependent of Rent. Principal Catchup as a dependent of Rent. Unscheduled Principal Payment as a dependent of Rent. |
| Validations | Stream Generation Template | Stream generation source must be External. |
| Accounting Templates | Accounting Template Set | Use streams applicable by book class for fixed rate contracts. Interest Catchup for transaction type Billing. Principal Catchup for transaction type Billing. Unscheduled Principal Payment for transaction type Billing. |
| Quality Values | Financial Product | Book Classification is Loan. Tax Owner is Lessee. Interest Calculation Basis is Catchup/Cleanup. Revenue Recognition Method is Streams. |
| Accrual Streams | Financial Product | Revenue is recognized based on income streams generated. Interest Catchup is billed and also accounted as income. |
| Validations | Financial Product | Quality values must match the stream generation template. |
When you process variable rate contracts for Catchup Interest on a Separate Schedule to Regular Billing loan, complete the procedures in the following table.
| Procedure | Description |
|---|---|
| 1. Create Contract | See Contract Authoring. |
| 2. Associate Financial Product with correct Quality Values | See Define Financial Product. |
| 3. Define Applicable Interest Rate Parameters | Create Interest Rate Details. |
| 4. Activate the Contract | See Contract Authoring. |
| 5. Run the Bill Processing Program Set | See Billing. |
| 6. Run the Variable Rate Billing process | Create Receivables Variable Rate Invoices. Interest adjustment amount is calculated, billed, and stored as a stream. |
| 7. Run the Generate Accruals process | Generate Accruals - Streams. Streams defined for accrual are accounted for as revenue. |
| 8. Terminate Expired Contracts | Variable rate processing must be completed prior to termination or expiration of contract. |
The following table shows what contract transactions are allowed for a variable rate contract with Catchup Interest on a separate schedule.
| Transaction | Conditions |
|---|---|
| Rebook | Current dated and prospective changes are permitted to interest rate parameters. Current dated and prospective changes are permitted to additional interest rate parameters. |
| Principal Paydown | Permitted |
| Loan Paydown | Not applicable |
| Termination | Early and Partial terminations are allowed. |
| Lease Center | Non-financial updates can be made. |
To add variable rate interest details to a contract, see Create Interest Rate Details.
For information on variable rate billing, see Variable Rate Billing.
Some interest rate details cannot be updated upon the online rebook of a contract. The following table shows the interest rate details that can or cannot be updated for online rebook.
| Updateable Field | Field That Cannot Be Updated |
|---|---|
| Interest Index | Base Rate |
| Adder Rate | Interest Start Date |
| Maximum Rate | Principal Basis |
| Minimum Rate | Days in a Month |
| Interest Basis | Days in a Year |
| Rate Delay | Catchup Start Date |
| Rate Delay Frequency | Catchup Frequency |
| Rate Change Frequency | Catchup Settlement |
| Rate Change Tolerance | Rate Change Start Date |
The following table describes what online rebook changes are permitted for different interest rate scenarios.
| Book Classification | Interest Calculation Basis | Conditions |
|---|---|---|
| Operating Lease, Direct Finance Lease, Sales Type Lease | Fixed, Float Factors | Effective date of change should be after the effective date of current interest rate details. |
| Operating Lease, Direct Finance Lease, Sales Type Lease | Reamort | Changes are permitted before contract has been rebooked, or before the first interest processing. |
| Loan | Fixed, Float, Catchup/Cleanup | Effective date of change should be after the effective date of current interest rate details. |
| Loan | Reamort | Changes are permitted before contract has been rebooked, or before the first interest processing. |
| Revolving Loan | Float | Effective date of change should be after the effective date of current interest rate details. |