Floating Rate: Cannot Modify Interest Rate Parameters During a Contract Rebook
Last updated on OCTOBER 26, 2016
Applies to:Oracle Lease and Finance Management - Version 12.2.5 and later
Information in this document applies to any platform.
On : 12.2.5 version, Variable Interest Rate
Floating Rate: Cannot modify Interest Rate Parameters during a Contract rebook
When a floating rate contract is rebooked to add in stub days or skips, the user is able to add stubs / skips to the Principal Payment / Interest payment schedules. The requirement is that the 'Rate Change Start Date' is also updated to match the new due dates on the Contract. But, the user is NOT able to modify / update the 'Rate Change Frequency / Rate Change Start Date' during the contract rebook. Due to this, the interest rate calculation cycle does not match the new contract payment schedule
The issue can be reproduced at will with the following steps:
1) Provide the details, including the navigation path, on how to consistently reproduce the issue.
1. Create an Estimated and Billed Contract. Contract Start date is 27-Nov-2012 and the term is 60 months. Asset Cost is $ 635,008.92
2. Principal Payment is 'Monthly' in arrears. For the first 3 months, it is $0 per month. Then it is $11,140.50 for the next 56 months. And for the last month, it is $ 11,140.92
3. Variable Interest Schedule is 'Monthly' in arrears for 60 months
4. In Interest Rate parameters, the 'Rate Change Frequency' is 'Quarterly' and 'Rate Change Start Date' is 27-May-2016. Principal Basis is 'Scheduled'. Days in Month / Year is Actual / 360
5. Validate, Price and Book the contract
6. Process CRVRI and Billing till 31-Aug-16
7. The Contract now needs to be rebooked to move the billing schedule - so that the billing will henceforth occur on the 15th of the month. Expectation is that the system will take the Interest rate as on 15th of a month, and apply that for the next quarter. Principal and Interest will be billed monthly - on the 15th
8. Rebook the contract. Stub the Principal payment by 19 days - so that the next Start date is 15-Sep-16. Similarly stub the Interest schedule by 19 days also - so that the next start date is 15-Sep-16.
9. Now that interest is to be billed on 15th of the month, the business team wants to ensure that the Interest rate as on the 15th of the month is used going forward
10. For the Interest Rate parameters, click on 'Update'. When the page opens up, modify the 'Rate Change Start Date' to 15-Sep-16 and click on 'Apply'. We get an error as 'You may not modify Interest Rate Parameters that are effective prior to the rebook effective date'
11. Instead of modifying the existing 'Interest Rate parameters', try creating a new 'interest rate parameter. Click on 'Add Rates'
12. On the new Interest Rate Parameters page that opens up, the 'Rate Change Frequency' and the 'Rate Change Start Date' cannot be modified or updated. The user has to use the existing 'Rate Change Start Date' only
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