5.6.2 Associating the Accrual Fee Component

After defining a fee component, you need to link the fee component to a product in Oracle Lending.

Specify the User ID and Password, and login to Homepage.

From the Homepage, navigate to Bilateral Loans Product Definition screen.

1. From the Bilateral Loans Product Definition screen, click on Accrual Fee Details tab.
   The Accrual Fee Input screen is displayed.

   Figure 5-10 Accrual Fee Input

   
   

   
   Description of "Figure 5-10 Accrual Fee Input"

   
   
2. Click Add row to add fee components. Click Default From Class to associate the required fee component with the product. System defaults the parameters of the selected fee component. However, you can change the parameters according to your requirements.
3. You can specify below details in this screen. For information on fields, refer to the field description table.

   Table 5-1 Accrual Fee Input

   Field	Description
   Accrual Method	Specify the accrual method from the adjoining drop-down list. This list displays the following values: Straight Line Yield Flat Amount
   Basis Amount	Select the basis amount on which the fee component should be calculated from the adjoining drop-down list. This list displays the following values: Expected balance Expected Outstanding Facility Expected utilized Facility
   Fee Type	Specify the fee type from the adjoining drop-down list. This list displays the following values: Income Expense
   Payment Method	Specify the fee type from the adjoining drop-down list. This list displays the following values: Discounted Bearing
   Allow Method Amendment	Select this check box to indicate that the amendment method is allowed for the accrual fee component.
   Allow End Date input	Select this check box to indicate that the fee component (if applicable for the product involved in the contract) cease to be associated with a contract on the contract ‘End Date.
   CLP Buy Price Diff	Select this check box to indicate that the difference between the PAR price (100%) and actual buy price is booked as fee against that component. Note: For the Commitments associated with the CLP positions, system maintains separate Income and Expense type of amortization FEE components to handle the amortization FEE amount computed based on the price difference between the Buy Price and Par value (100%). In case of premium price quotation for the Buy trades, expense type of amortization FEE is created and Income type is used for Discount Price quotation. These Income and Expense components should be unique for a commitment product. Such Amortization FEE components are identified by flag CLP Buy Price Diff. In a CLP commitment product, system allows one income and one expense type of Amortization FEE components with the flag CLP Buy Price Diff
   Asset Transfer Marks	Select this option to indicate that the amortization fee component is of the asset transfer marks type. This is defaulted to the component level when details of the amortization fee are being entered.
   Accrual Required	You have the option to accrue the fee earned on syndication contracts. To do this, you have to check this option.
   Consider as Discount	Select this check box to indicate that the discount accrual to the component is applied.
   Deferred Interest Component	Select this check box to indicate that this component should represent deferred interest. When the loan status changes to Performing from Non-performing, the system checks the value of the backend parameter ALLOW_REPERFORMING_LOAN_FUNC. If the value of this parameter is Y, the system performs memo interest reversal. Amortization fee liquidation is done on deferred fee interest component for the memo interest amount that is moved to Real GL as part of the reversal. Note: You can maintain only one deferred interest component for a product.

   The system posts the following accounting entries:

   For normal amortization FEE component of income type:

   Accounting Role	Dr / Cr	Amount Tag
   CUSTOMER	Dr.	Component_LIQD
   FEE_Received_In Advance	Cr.	Component_LIQD

   For normal amortization FEE component of expense type:

   Accounting Role	Dr / Cr	Amount Tag
   CUSTOMER	Dr.	Component_LIQD
   FEE_Paid_In Advance	Cr.	Component_LIQD

   For amortization FEE components of Income type (CLP Buy Price Diff):

   Accounting Role	Dr / Cr	Amount Tag
   SLT-PREM-DISC	Dr.	Component_LIQD
   FEE_Received_In Advance	Cr.	Component_LIQD

   For amortization FEE component of expense type (CLP Buy Price Diff):

   Accounting Role	Dr / Cr	Amount Tag
   SLT-PREM-DISC	Dr.	Component_LIQD
   FEE_Paid_In Advance	Cr.	Component_LIQD