3.3.2 IOF Calculation for Value Dated Amendments

• IOF recalculation happens only if value dated amendment is done for maturity extension or principal increase.
• System recalculates the IOF value based on the principal schedule outstanding amount and VAMI value date unpaid schedules.(PREV_IOF_TAX_AMT).
• System calculates the IOF value based on the new principal schedule outstanding and VAMI value dates. When the principal increase happens then you can calculate IOF tax for principal increase. It gets 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 VAMI principal increase.
• In VAMI event, if the principal increase (new disbursement) does not happen then the IOF Additional tax amount is not calculated and not added to CURR_IOF_TAX_AMT.IOF rates used for recalculation is the same IOF rates populated during the loan initiation.
• No refund is given to the customer if the newly calculated amount is less than the already liquidated IOF amounts.
• In case IOF Capitalization IOF computed as part of value dated amendment is not capitalized even if the IOF Payment Method is capitalization. It is collected from the customer during VAMI. Below accounting is posted in case of IOF payment during VAMI.

  Dr/Cr	Account/GL	Amount Tag	Amount
  Dr	CUSTOMER GL	<Component>_LIQD	<Difference in IOF amount>
  Cr	IOF_PAY_ACC	<Component>_LIQD	<Difference in IOF amount>

• If schedule amount is re-calculated as a result of value dated amendment, IOF re-calculation for that schedule for the entire schedule period is based on the new schedule amount. There is no split IOF calculation based on the schedule amount before and after amendment.
• For a future date amendment, the IOF calculation happens on VAMI along with amendment initiation.
• IOF is not recomputed as part of rate revision or rate change by value dated amendment.