Bharath Gowda created FINERACT-2232:
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Summary: Capitalized Income
Key: FINERACT-2232
URL: https://issues.apache.org/jira/browse/FINERACT-2232
Project: Apache Fineract
Issue Type: New Feature
Affects Versions: 1.11.0
Reporter: Bharath Gowda
Capitalized Income is a Feature required to support loan products like Merchant
Term Loan (MTL) and Working Capital (WC).
This feature would allow for posting a defined Income debit to a loan account,
and amortizing a portion of that amount daily to income based on a defined
effective interest rate (EIR) calculation.
h3. Requirement Details
# Capitalized income to be Introduced and configurable at the loan product
level
# Capitalized income can be FLAT (default)
## % of Disbursement amount (PP needs only FLAT -( we can discuss and remove %
if not required) → Separate story
# Amortization strategy
## DEFAULT: Equal amortization
# It is added to the loan account at Disbursement level and on disbursement
date only through API
## New API to add Capitalized income
## Validation match with disbursement date
# Once Disbursed, New Transaction Type to added separately for Capitalized
income amount
## New transaction type
### Normal, monetary transactions
## Accounting for this transaction type
# Capitalized income amount is considered as a principal portion,hence
-Schedule calculation will be based on (disbursement amount+Capitalized income)
-Interest calculation will be based on (disbursement amount+Capitalized income)
-No changes in allocation or working for other monetary transactions
# No changes in any other monetary transactions and its accounting entries
# Validation of Disbursement amount <= approved amount should be changed to
(Disbursement amount+Capitalized income) <= approved amount
# Add Amortization on Daily basic to recognize the portion of Deferred Income
to income
## Amortization to be done on daily basis for origination fees at COB
## *System should maintain the fees balance during Amortization*
*balance-§ Capitalized income - fee credits/adjustments - fee income recognized*
## Charge-off will also charge-off the Capitalized income and no amortization
will be done after charge-off date
## Final Amortization will be done for balance amount if the loan gets
Preclosed on the same day
# We need an API where Capitalized income amortization information can be
fetched
## Basic balance information
## Transaction list?
# New type of Capitalized income adjustment/credit - to be introduced
## Capitalized income Adjustment works as a Credit Transaction that reduces
the Capitalized income balance
## Works similar like any other Credit Transaction In Fineract and reduces the
loan balances as per the allocation set
## Capitalized income Adjustment Transaction can have its own Allocation
Strategy set
## Capitalized income Adjustment Accounting entries works like a Mirror of
Capitalized income entries
TO DO
Add usecases
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