AR - Modify Oracle Asset Logic for Calculation of Periodic Lease Rate (Doc ID 2307435.1)

Last updated on SEPTEMBER 14, 2017

Applies to:

Oracle Assets - Version 12.2.3 and later
Information in this document applies to any platform.

Goal

Expect formula for changing from an annual percentage rate to a semiannual, quarterly, or monthly one to be:

Effective rate for period = (1 + annual rate)(1 / # of periods) – 1

Per Oracle Asset User Guide, Annual Interest is divided evenly by payment periods:

Section: Lease Evaluation
Example 1: Set Up Lease
12% annual, with 12 payment periods per year:
(a) The interest rate per period (in this example, 12%/12=1%) multiplied by
the prior period lease obligation, except for the 3/1/93 payment; since no
time has elapsed, no interest has accrued.

Example 2: Set Up Payment Schedule
10% annual, with 2 payment period per year (Jan & Jul)
(a) The interest rate per period (in this example, 10%/2=5%) multiplied by
the prior period lease obligation, except for the 3/1/93 payment; since no
time has elapsed, no interest has accrued.

 

 

Solution

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