3.3.3 IOF Calculation for Normal Rollover/Split Rollover/Consolidated rollover

  • When a loan is rolled over during consolidated or normal rollover, IOF is calculated based on the new loan schedule details.
  • System recalculates the IOF value based on the principal schedule outstanding amounts based on ROLLOVER dates unpaid schedules.(PREV_IOF_TAX_AMT).
  • System calculates the IOF value based on the new principal schedule outstanding based on ROLLOVER dates. If the Additional disbursement happens then you can calculate IOF tax for principal increase. It is calculated based on the additional rate by using the below formulae. (CURR_IOF_TAX_AMT)
    Formula Name Condition Formula Interim Formula
    IOF_CALC_FRM_3 No (PRINCIPAL_INCREASE * (ADDL_RATE/100)) No
  • Finally IOF_TAX = (CURR_IOF_TAX_AMT- PREV_IOF_TAX_AMT) Then IOF_TAX > 0 that amount is the final tax amount for normal rollover, Then the final IOF tax amount is on ROLL event.
  • When a loan is rolled over during SPWN NORMAL ROLLOVER, IOF is calculated based on the new loan schedule for the new contract ref no.
  • System recalculates the IOF value based on the principal schedule outstanding amounts based on ROLLOVER dates unpaid schedules for the parent contract ref no (PREV_IOF_TAX_AMT).
  • System calculates the IOF value based on the new principal schedule outstanding based on ROLLOVER dates for the new child contract ref no. The additional disbursement happens then you can calculate IOF tax for principal increase. It is calculated based on the additional rate by using the below formulae. (CURR_IOF_TAX_AMT)
    Formula Name Condition Formula Interim Formula
    IOF_CALC_FRM_3 No (PRINCIPAL_INCREASE * (ADDL_RATE/100)) No
  • Finally IOF_TAX = (CURR_IOF_TAX_AMT- PREV_IOF_TAX_AMT) Then IOF_TAX > 0 that amount is the final tax amount for normal rollover, Then the final IOF tax amount is on new child contract ref no DSBR event.
  • Same method is followed on SPWN SPLIT ROLLOVER, IOF tax calculation.
  • When a loan is rolled over during CONSOL ROLLOVER, IOF is calculated based on the new loan schedule details.
  • System recalculates the IOF value based on the principal schedule outstanding amounts based on ROLLOVER dates unpaid schedules.(PREV_IOF_TAX_AMT).
  • System calculates the IOF value based on the new principal schedule outstanding based on ROLLOVER dates and the previous outstanding amount percentage (CURR_IOF_TAX_AMT).
  • For example when two contracts can be rollover, first calculate PREV_IOF_TAX_AMT_1, PREV_IOF_TAX_AMT_2.
  • Then system calculates CURR_IOF_TAX_AMT_1, CURR_IOF_TAX_AMT_2 by using below formulae.
    Formula Name Condition Formula Interim Formula
    CURR_IOF_TAX_AMT_1 SCH_DAYS<=364 ((PRINCIPAL_SCHAMT* ROLL_PERCENTAGE_ 1)*(IOF_DLY_RATE/ 100 ) *SCH_DAYS) No
    CURR_IOF_TAX_AMT_1 SCH_DAYS>364 ((PRINCIPAL_SCHAMT* ROLL_PERCENTAGE_ 1)*(MAX_IOF_RATE/ 100) No
    **ROLL_PERCENTAGE_1 = (PREV_OUTSTANDING_AMT_1 NEW_CONTRACT_DSBR_AMT)*100.
  • IOF tax for principal increase is calculated based on the additional rate by using the below formulae. (ADDITONAL_TAX_NEW_DSBR_1).
    Formula Name Condition Formula Interim Formula
    ADDITONAL_TAX-_NEW_DSBR_1 No ((NEW_CONTRACT_DSBR_ AMT * ROLL_PERCENTAGE_ 1)(ADDL_RATE/100)) No
  • Finally the IOF tax for primary contract_ref_no is IOF_TAX_AMT_1 = ((CURR_IOF_TAX_AMT_1 + ADDITONAL_TAX_NEW_DSBR_1) - PREV_IOF_TAX_AMT_1).
  • Then same is followed for secondary contract i.e. IOF_TAX_AMT_2.
  • Finally IOF tax for consol rollover is IOF_TAX = (IOF_TAX_AMT_1 + IOF_TAX_AMT_2) Then the final IOF tax amount is on NEW contract DSBR event.
  • If consolidated rollover is done with a new product the product preference of the new product will be considered Depending on the product preference IOF is collected in advance during Normal/ Split/consolidated rollover or IOF amount is capitalized.
  • If the Loan product preference is for IOF Capitalization, then during normal/split/ consolidated rollover the flag ‘Funding during rollover’/‘Fund during DSBR respectively will get automatically checked. System will capitalize the IOF amount during normal/ split/consolidated rollover.
  • There is no adjustment done for the IOF amounts already collected during the life cycle of the loan(s) being rolled over.
  • Normal Rollover: ROLL event is to be linked to the IOF accounting entries are to be defined.

    For IOF Advance Payment type of product

    Dr/Cr Account/GL Amount Tag Amount
    Dr CUSTOMER GL <Component>_AMT <IOF amount calculated for Rollover>
    Cr IOF_PAY_ACC <Component>_AMT <IOF amount calculated for Rollover>
    For IOF Capitalization type of product
    Dr/Cr Account/GL Amount Tag Amount
    Dr Expense GL <Component>_CAP <IOF amount calculated for Rollover>
    Cr IOF_PAY_ACC <Component>_CAP <IOF amount calculated for Rollover>

    Split Rollover: DSBR event is to be linked to the IOF accounting entries are to be defined.

    For IOF Advance Payment type of product
    Dr/Cr Account/GL Amount Tag Amount
    Dr CUSTOMER GL <Component>_AMT <IOF amount calculated for Split Rollover>
    Cr IOF_PAY_ACC <Component>_AMT <IOF amount calculated for Split Rollover>
    For IOF Capitalization type of product,
    Dr/Cr Account/GL Amount Tag Amount
    Dr CUSTOMER GL <Component>_CAP <IOF amount calculated for Split Rollover>
    Cr IOF_PAY_ACC <Component>_CAP <IOF amount calculated for Split Rollover>

    Consolidated Rollover: DSBR event is to be linked to the IOF accounting entries are to be defined.

    For IOF Advance Payment type of product
    Dr/Cr Account/GL Amount Tag Amount
    Dr CUSTOMER GL <Component>_AMT <IOF amount calculated for Consolidated Rollover>
    Cr IOF_PAY_ACC <Component>_AMT <IOF amount calculated for Consolidated Rollover>
    For IOF Capitalization type of product,
    Dr/Cr Account/GL Amount Tag Amount
    Dr CUSTOMER GL <Component>_CAP <IOF amount calculated for Consolidated Rollover>
    Cr IOF_PAY_ACC <Component>_CAP <IOF amount calculated for Consolidated Rollover>

Parent topic: Financial Operations Tax Maintenance