Liquidating Back Valued Schedules

7.8.4 Liquidating Back Valued Schedules

If you specified, while defining the product, that for a back-dated loan with repayment schedules prior to today’s date, the schedules have to be liquidated when the loan is initiated, the same applies to the loan you are entering.

However, through this screen, you can choose not to liquidate back valued schedules.

Example

Loans can be initiated:

As of today
A date in the future
As of a date in the past

Suppose today is 15 October 1997 and you book a loan of 15,000 USD with the value date (date on which the loan comes into effect) as 15 September 1997. Accounting entries are passed with the Initiation Date on 15 September.

But if there had been an interest payment schedule for 30 September 1997 for 500 USD, then if you specify that back valued schedules should be liquidated, the liquidation entries for this schedule is also passed.

If you specify that back dated schedules are not to be liquidated, only accrual entries are passed till today.

Note:

The entries associated with each event (initiation and liquidation in this case) is passed only if they have been defined for the product. Further, the accounts used are the ones defined for each entry.

Parent topic: Specifying the Preferences of the Contract