Questions on Repayment and Splitting Balances in ALM According to Payment Pattern Definition

(Doc ID 2325653.1)

Last updated on NOVEMBER 21, 2017

Applies to:

Oracle Financial Services Asset Liability Management - Version 8.0.0 and later
Information in this document applies to any platform.
Oracle Financial Services Asset Liability Management (ALM)
Oracle Financial Services Analytical Applications (OFSAA)

Goal

Question 1: What is the expected output for the below scenario?

Have mapped Payment Pattern for instrument record to generate repayment of principal & interest cash flow. Selected "Level Principal" as payment type. The configuration of event also done based on Cur Payment for 100% value (Refer 8th Event).

Ideally it is expected that ALM should roll forward from Origination Date + Payment Frequency defined in the Payment Pattern along with repetition event.  Based on generated cash flow dates on above logic, when the cash flow date is greater than As of Date, system will identify which event is currently running.  Based on this it is expected that it is the 8th event as per the Payment Pattern.

However, it appears that the next payment date is considered from the instrument level record and roll forward is done based on Payment frequency defined in Payment Pattern.

Generated output is as follows:

a. Cash Flow amount is 200,000 instead of 100,00 as Cur Payment 100%.
b. Cash Flow dates are 15th Oct-17, 15th Nov-17, 15-Dec-17 , 15-Jan-18 & 15-Oct-21. But as per 8th event of Payment Pattern only, three repetition should be outstanding starting from 15th-Oct-17 but system is generating four repetitions. 


Question 2
: Why is ALM splitting Cur Payment as 1000,000 divided by 5 = 200,000?

It is observed that although the Cur Payment is 100,000 and remaining no. of payments is only five, ALM is not referring to Cur Payment logic of 100% from Payment Pattern and this is not expected.  It is expected that ALM should generate 100% of Cur Payment and in last installment, the outstanding principal amount should be paid.

If this is not a bug, why does ALM generate in this way?

Solution

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