Balloon Instrument Records Do Not Appear to Generate the Correct Cash Flow Results (Doc ID 370530.1)

Last updated on JULY 31, 2017

Applies to:

Oracle Risk Manager - Version 4.5.39 and later
Oracle Financial Services Asset Liability Management - Version 5.0 and later
Information in this document applies to any platform.
Oracle Financial Services Applications (OFSA) - Version: 4.5
Note: All OFSA 4.5 products have reached sustaining support.

Symptoms

On OFSA 4.5.39, balloon instrument records do not appear to generate the correct cash flow.

EXPECTED BEHAVIOR
Expect records where AMRT_TERM > ORG_TERM to recalculate the CUR_PAYMENT amounts appropriately based on the greater AMRT_TERM. As per the TRM:

OFSA does not use AMRT_TYPE_CD to determine whether a record is a balloon or
not. OFSA uses AMRT_TERM and ORG_TERM for this purpose. Therefore, even a
level principal AMRT_TYPE_CD could be treated as a balloon instrument.

If the AMRT_TERM > ORG_TERM, OFSA recognizes the record as a balloon, and recalculates the payment amount.

The issue can be reproduced at will with the following steps:
1. Create two identical instrument records, one with AMRT_TERM > ORG_TERM and one with AMRT_TERM = ORG_TERM
2. Run RM process with Detail Cash Flow checked
3. Check results in OFSA_PROCESS_CASH_FLOWS for both records

Cause

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