how to calculate the interest in sap fico

Interest Calculations

Balance Interest calculation                                  Item interest calculation

S         Type                                                               P Type

GL       Account                                                         Vendor / Customers

Define interest calculation type:

Path : SPRO- Financial accounting – General ledger accounting- Business transactions – Bank account interest calculation – Interest calculation Global settings – Define interest calculation types

Interest indicator                              : G1

Name                                                 : 10% Monthly

Interest calculation type                  : Select S

Balance interest calculation

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Prepare account balance interest calculation:

Path : SPRO- Financial accounting – General ledger accounting- Business transactions – Bank account interest calculation – Interest calculation Global settings- prepare account balance interest calculation (Tr.Code OBAA)

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Interest calculation indicator                      : G1

Interest calculation frequency                   : Select 01

Calendar type                                               : Select G (28        31/365)

Select balance plus interest check box

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Calendar Type

In case of rupee loans we use G Calendar        In case of foreign currency loans we

use F calendar.

FC Loan from SBI LIBOR +2%

(LIBOR Mean London Inter Bank Offer Rate)

For interest calculations the denomination will be always 360 days

FIBOR – Frankfurt Inter Bank Offer Rate

MIB - Mumbai Inter Bank Offer Rate

Define Reference Interest Rates:

SBI rupees term loan          10/04/2008                                                                100000

10/09/2008                                                                  10000

Interest calculation for the year

1^st method

On 100000 from 10/04/2008 to 31/03/2009 at 10%                                        15000

On 100000 from 10/09/2008 to 31/03/2009 at 10%                                        -3000

                                                                                                                         -------- 

                                                                                                                        12000

2^nd Method

On 10000 from 10/04/2008 to 09/09/2008 at 10%                                            5000

On 90000 from 10/09/2008 to 31/03/2009 at 10%                                            7000

                                                                                                                          ------

                                                                                                                         12000

                                                                                                                          =====

If the account is having credit balance                                                   10%

If the account is having debit balance                                                     8%

Loan account – Interest indicator                         Account Credit balance reference interest rate : G2-10%

                                                                           Account debit balance reference interest rate G3-8%

A)   Interest  rates are given to reference interest rate  (G2 and G3)

B)   Reference interest rates are specified separately if there is a credit balance and if there is a debit balance and it will be assigned to interest indicator

C)   Interest indicator will be specified in loan account.

Define reference interest rates: 

Path : SPRO – Financial accounting – General ledger accounting – Business transaction –Bank account interest calculation – Interest calculation –Define reference interest rates (Tr code is OBAC)

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Ref int.rate                            : G2

Long text                                : Credit balance 10% interest

Description also credit balance 10% interest

Date from                               :01.04.2008

Currency                               : INR

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Ref.int.rate                            : G3

Long text                                : Debit balance 8% interest

Description                            : Dr. Bal 8% int

Date from                               : 01.04.2008

Currency                               : INR  

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Define Time – Dependent Terms

Path : SPRO – Financial accounting – General ledger accounting – Business transaction – Bank account interest calculation – Interest calculation- Define time – Dependent Terms

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Interest calculation indicator                                  : G1

Currency key                                                                        : INR

Effective from                                                           : 10.04.2008

Sequential number                                                 :1

Terms                                                 : Select credit interest balance  interest calculation

Ref.interst rate                                                          : G2

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Interest calculation indicator                                  : G1

Currency key                                                                        : INR

Effective from                                                           :01.04.2008

Sequential number                                                 :2

Term                                                                           : Select debit interest balance interest   

  calculation

Reference rate                                                         : G3

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Enter Interest Values

Same path as above  (Tr code is OB83)

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Reference interest rate                                           : G2

Valid from                                                                  : 01.04.2008

Interest rate                                                               : 10 (one month)

Reference interest rate                                           : G3

Valid from                                                                  : 01.04.2008

Interest rate                                                               : 8

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