INTEREST CALCULATION

INTEREST CALCULATION

In SAP we have two type interest calculations they are

Balance interest calculation

Item interest calculation.

Balance interest calculation is also called bank account interest calculation. It is calculated on GL account.

Item interest calculation is also called interest on arrears it is calculated on customers/ vendors.

Balance interest calculation configuration settings

Transaction

1)      Loan taken from SBI Rs – 1000000 on 01.05.2008 at interest rate – 10%

Go to FS00 Create the following GL accounts

1)      SBI loan account                       – under Liabilities

2)      Interest paid account                 – under Expenses

Go to F-02 Post the following GL documents on 01.05.2008

                  Cash account Dr                           1000000

                  To SBI Loan account                    1000000

                  (Loan received from SBI)

                 

                  Settings in IMG

Path: Spro → Img → Financial Accounts (new) → General Ledger Account (new) ­→ Business Transaction → Bank Account Interest Calculation → Interest Calculation Global settings.

A)  Define Interest calculation types (OB46)

Click on new entries

Interest ID	Name	Interest type
IT (any	Balance interest calculation	S (balance interest calculation)

Press enter key and Save

Come back

B)  Prepare account balance interest calculation (OBAA)

Path: Same

Click on new entries

Interest calculation indicator – IT (any code)

Interest calculation frequency – 01 (every month)

Settlement day – 01

Calendar type – G (28-31/365)

Output control

Select Balance plus interest

Press enter key and save.

Come back wise

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