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11i: XTR: How To Provision Total Amount Of Accrued Interest Over The Life Of The Instrument? (Doc ID 954526.1)

Last updated on JULY 10, 2020

Applies to:

Oracle Treasury - Version 11.5.10.2 and later
Information in this document applies to any platform.

Goal

Back Ground:

The treasury module is realizing the accrual calculations correctly. You require it to create an allowance or provision of the total amount of interest that will be accrued during the life of the instrument. This provision should be created at the same time that we generate the instrument and then the monthly accruals should reduce this amount.

In Argentina the accounting legislation forces you to present the balance as accurate as possible at the time of presenting it to the Tax Authorities and that is why companies are required to create a provision of possible and future losses such as the ones mentioned.

In the Argentina it is customary to do a provision each time you are going to have a future loss such as interests from a loan to leave that loss reflected on the company s books. Then as the loss gets accrued this provision is decreased until both the loss and the provision account reach 0.

Questions:

1. How To Provision Total Amount Of Accrued Interest Over The Life Of The Instrument for TMM Deals?

2. Is there another instrument you can use that creates a full provision of interests at the begining of the instrument and that works as a loan ?

Solution

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In this Document
Goal
Solution
References

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