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Does BSP Use the ACCRUED_INTEREST Column? (Doc ID 2619327.1)

Last updated on DECEMBER 11, 2019

Applies to:

Oracle Financial Services Balance Sheet Planning - Version 8.0.5 and later
Information in this document applies to any platform.
Oracle Financial Services Analytical Applications (OFSAA)
Oracle Financial Services Funds Transfer Pricing (FTP)
Oracle Financial Services Asset Liability Management (ALM)
Oracle Financial Services Enterprise Performance Management (EPM)
Oracle Financial Services Balance Sheet Planning (BSP)

Goal

Does BSP use the ACCRUED_INTEREST column in the instrument tables (FSI_D_xxxxx)? If so, in what situations is it used? For example, consider an instrument with an AMRT_TYPE_CD = 700 and an ADJUSTABLE_TYPE_CD = 250. Last payment date is the ORIGINATION_DATE and the NEXT_PAYMENT_DATE is the MATURITY_DATE. The ACCRUED_INTEREST amount of $0. The cash flow engine (CFE) appears to calculate the accrued interest from the ORGINATION_DATE to the MATURITY_DATE, with the "historical accrued interest" calculated at the CUR_NET_RATE that exists at the AS_OF_DATE. However, this calculated historical accrued interest would only be correct if the interest rate never changed from the ORIGINATION_DATE to the AS_OF_DATE, but in the case of a other adjustable instrument, it is possible for that rate to have changed between the ORIGINATION_DATE and the AS_OF_DATE.

The column data was tested by changing the ACCRUED_INTEREST to $1,500,000 and re-running cash flows, the changing to $3,000,000 and re-running cash flows. In all instances, where accrued interest was $0, $1,500,000 and $3,000,000, the total calculated cash flow interest came out the same.

Solution

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Goal
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