SAP Knowledge Base Article - Public

3351605 - Annuity repayment cash flow issue in treasury loan deal

Symptom

How is the system calculating annuity repayment amount on a fixed Annuity repayment schedule in a Loan deal?

Environment

SAP S/4HANA Cloud.

Reproducing the Issue

  1. Go to App Create Financial Transactions.
  2. Enter the company code, product type (55A), transaction type (200), and partner > Create.
  3. Enter the Loan Amount, Start Date & End Date.
  4. Borrowing 50000000.00 GBP
    Flow type 1100
    Start date 01.01.2023
    End date 31.12.2023
    Inclusive : Start included
    Term cat.: Fixed Term
    Rounding category: Round to nearest.
  5. Under the interest structure, enter the following details.
    Interest calculation: Fixed
    Percentage Rate: 5%
    Interest Calculation Method: act/365
    Frequency: Manual Input
    Item eff. From: 01.01.2023
    Due date: 01.01.2023
    Calculation Date: 01.01.2023
    Every: 8 Days

    • Under the repayment structure, enter the following details
      Repayment Method: Annuity Repayment
      Amount: 17029
      Frequency: Manual Input
      Item eff. From: 01.01.2023
      Due date: 01.01.2023
      Calculation Date: 01.01.2023
      Every: 8 Days

    Resolution

    The Principle amount is 50,000,000.00 GBP

    Interest calculated 5% every 8th day.

     

    Repayment amount is 17,029.00 GBP every 8th day.

     

    Cycle 1:

    Interest calculated 54794.52

    method is act/365 (calculates the daily interest using a 365-day year and then multiplies that by the actual number of days in each time period).

    5% of 50,000,000.00 = 2500000/365 = 6489.31506489 * 8(days) = 54794.52 (total interest calculated).

     

    Repayment amount = 17029.00 GBP

     

    Remaining amount out of interest 37,765.52 + 

     

    New principle 50000000.00 + 37765.52 (Remaining annuity amount is added to the principle). New Principle 50037765.52

     

     

    Again, for the 2nd cycle the annuity is calculated on the New Principle and added to the principle amount. The system is working as standard design.

    See Also

    App Library Create Financial Transaction 

    Keywords

    act/365, Annuity, repayment, FTR_CREATE, Create Financial Transaction, FIN-FSCM-TRM-TM, product type (55A), transaction type (200). , KBA , FIN-FSCM-TRM-2CL , Treasury and Risk Management (Public Cloud) , FIN-FSCM-TRM-TM-TR , Transaction Management , How To

    Product

    SAP S/4HANA Cloud Public Edition all versions