Accumulated and Accrued Interest Calculation

Review accumulated interest outputs for non-interest-payment events, including repricing, prepayment, and deferred balance amortization. CFECS calculates accumulated interest for these events and adds accrued interest from the source system where applicable, extending the earlier coverage of cases such as interest capitalization.

Improve calculation accuracy and make unpaid interest carried between events easier to trace in the output.

Steps to enable and configure

1.    Review the existing Include Accrued Interest setting. Select Yes when the process must include source-system accrued interest for the applicable As of Date calculation ranges.
2.    Use Interest Credited / interest capitalization only when capitalization applies to the supported instrument. Review Usage of Accrued Interest and Interest Amounts in the Reference Guide for the applicable event and output rules.

Tips and considerations

Test first-payment and non-payment events, accumulation until payment, capitalization and reset, and forward-starting accounts. Check the affected net and gross outputs. Use the existing process and instrument settings; accumulation is not limited to capitalization cases.

Key resources

https://docs.oracle.com/en/industries/financial-services/ofs-analytical-applications/profitability-balance-sheet-base/index.html