8.2.40.2 Module Usage
Oracle ALM
Oracle ALM does not reference CUR_TP_PER_ADB or PRIOR_TP_PER_ ADB.
Transfer Pricing
When processing with the mid-period repricing option, Oracle Funds Transfer Pricing references CUR_TP_PER_ADB as the average daily balance at the time of the Last Repricing Event. This field is used in conjunction with the PRIOR_TP_PER_ADB field.
Mid-period repricing produces an average transfer rate over the current processing month if the LAST_REPRICE_DATE occurred since the beginning of the processing month. CUR_TP_PER_ADB and PRIOR_TP_PER_ADB are used as average balance weightings in the mid-period pricing equation.
An example of a mid-period pricing scenario as follows. The table provides the scenario specifics, followed by an explanation.
Table 8-14 Mid-period Pricing Scenarios
| Fields | Scenario |
|---|---|
| AS_OF_DATE | 31-DEC |
| LAST_REPRICE_DATE | 15-DEC |
| LAST_PAYMENT_DATE | 15-DEC (balance was reduced on this date) |
| CUR_TP_PER_ADB | $10,000 |
| PRIOR_TP_PER_ADB | $15,000 |
| TRANSFER_RATE | 3% from 15-NOV to 15-DEC (prior period, 30 days in the period) |
| TRANSFER_RATE | 5% from 15-DEC to 15-JAN (current period, 31 days in the period) |
Without the mid-period repricing option, Transfer Pricing would assign a 5% transfer rate to the record for December. However, this is the transfer rate only for the second half of December. The true transfer rate for the month should be a balance-weighted average transfer rate over the entire month. Mid-period repricing provides this by calculating the final transfer rate by weighting the transfer rate results (from current and previous repricing periods) by average balances and days. This final transfer rate is then applied to the detail record's TRANSFER_RATE field.
The equation used by Oracle Transfer Pricing for calculating Mid-Period Repricing is as follows:
((CUR_TP_PER_ADB * Current Period Transfer Rate * Current Period Days) + S(PRIOR_TP_PER_ADB * Prior Period Transfer Rate * Prior Period Days)) / ((CUR_TP_PER_ADB * Current Period Days) + S(PRIOR_TP_PER_ADB * Prior Period Days))
From the earlier example, the equation would be:
((10,000 * 5% * 31) + (15,000 * 3% * 30))/ ((10,000 * 31) + (15,000 * 30)) = 3.82%
Therefore, the correct transfer rate is 3.82%.
About the earlier calculation, the CUR_TP_PER_ADB is used to determine the balance as of the LAST_REPRICE_DATE, and PRIOR_TP_PER_ ADB is used to determine the balance as of the repricing dates before the LAST_REPRICE_DATE.
If the TEASER_END_DATE is greater than the AS_OF_DATE, the Mid-Period Repricing does not apply and the CUR_TP_PER_ADB and PRIOR_TP_PER_ ADB fields are not used.
See the Oracle Financial Services Funds Transfer Pricing User Guide for more information.