Generally in the lending industry, computed amounts (interest, fees, costs, and so on) are rounded to the second decimal place. However, there are occasions where the rounding of the computed amounts has to be carried out using different methods. Oracle Financial Services Lending and Leasing supports the rounding, raising, or cutting off of calculated amounts.
Rounding will increase the resulting amount to the next number up to the second decimal, based on the value of third decimal.
Raising will always increase the resulting amount to the next number up to the second decimal.
Cutting off will always cut the number after the second decimal.
You can choose the rounding method you want to use by setting the parameter value for the system parameter CMN_AMOUNT_ROUND_METHOD on the Administration form (Setup menu bar > Administration link > System link > System Parameters link > System tab).
You can choose the rounding factor you want to use by setting the parameter value for the system parameter CMN_AMOUNT_ROUND_FACTOR on the Administration form. Currently, the system supports rounding up to two decimals only.
Example 1: Amount: 234.136
Method |
Result |
Round |
234.14 |
Raise |
234.14 |
Cutoff |
234.13 |
Example 2: Amount: 234.134
Method |
Result |
Round |
234.13 |
Raise |
234.14 |
Cutoff |
234.13 |
Example 3: Amount: 234.1319999
Method |
Result |
Round |
234.13 |
Raise |
234.14 |
Cutoff |
234.13 |
Note
The system rounds only calculated amounts (calculated fees, calculated payment, and so on) and not user-entered amounts.
The system supports the rounding of the index rate to keep the rate calculation as simple as possible for the customers. The general practice is to round the rate to nearest eighth (1/8th) (to keep the index rate in the multiple of .125) or fourth (1/4th) (to keep the index rate in the multiple of 25). The system rounds only the index rate and not the margin or final rate.
Note
Index rounding does not apply to fixed rate leases.