Temporal Currency Gain Loss Method Gives Invalid Generated FE 485 (Realized Currency Gain/Loss (Interest - Net) Results (Doc ID 2129248.1)

Last updated on APRIL 22, 2016

Applies to:

Oracle Financial Services Asset Liability Management - Version 6.1.1 and later
Information in this document applies to any platform.
Oracle Financial Services Analytical Applications (OFSAA)
Oracle Financial Services Asset Liability Management (ALM)

Symptoms

On ALM 6.1.1 it appears that the FE 485 (Realized Currency Gain/Loss (Interest - Net)) generated results are incorrect. Used as currency gain/loss method "Temporal" and tried to use the following validation method FE 485 = Interest Cash Flow x ((1/Current Exchange Rate)-(1/Original Exchange Rate)) (Formula taken from the Cash Flow Engine Guide, page 5-47, Accounting for Exchange Rate Fluctuations).

ACTUAL BEHAVIOR
Incorrect FE 485 results or incorrect formula documented.

EXPECTED BEHAVIOR
Expect generated FE 485 = Interest Cash Flow x ((1/Current Exchange Rate)-(1/Original Exchange Rate)) as documented in the Formula taken from the Cash Flow Engine Guide, page 5-47, Accounting for Exchange Rate Fluctuations/

The issue can be reproduced at will with the following steps:
1. Load Exchange Rates
2. Load Instrument Records
3. Choose Temporal for Currency Gain/Loss Basis in Product Characteristics
4. Setup and run ALM Process

Cause

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