12.1.6 Specifying the Status of Annual Rest Loans

The status of an installment loan depends on the repayments made on the loan. A repayment could mean a change in status. Each status applicable for a contract is defined in the system. For movement to each status, you can define processing parameters, such as whether further accruals may be stopped, or accruals already made must be reversed out, and if the reporting GL must be changed when the status changes.

You can also process individual statuses and status changes for each schedule defined for a contract. In such a case, for each schedule, the accrued interest amounts on the schedule that has fallen overdue, resulting in a change of status, would be moved to the transfer GL’s defined for the status. You can transfer the outstanding unearned interest amount of the main interest component to a different GL. In case of unearned interest amounts falling overdue, you can specify the following:

• For the accounting role COMPONENT_UIR (which is mapped to a Loan Asset GL), the system would transfer the outstanding unearned interest amount from the Loan Asset GL to a new GL.
• For the accounting role COMPONENT_UIP (which is mapped to a Unearned Income/ Liability GL), the system transfers the outstanding unearned interest amount to a new GL.