[jira] [Assigned] (FINERACT-2148) New charge-off behavior with interest bearing loans

["Mihaly Dallos (Jira)" <ji...@apache.org>]

     [ https://issues.apache.org/jira/browse/FINERACT-2148?page=com.atlassian.jira.plugin.system.issuetabpanels:all-tabpanel ]

Mihaly Dallos reassigned FINERACT-2148:
---------------------------------------

    Assignee: Mihaly Dallos

> New charge-off behavior with interest bearing loans
> ---------------------------------------------------
>
>                 Key: FINERACT-2148
>                 URL: https://issues.apache.org/jira/browse/FINERACT-2148
>             Project: Apache Fineract
>          Issue Type: Improvement
>            Reporter: Mihaly Dallos
>            Assignee: Mihaly Dallos
>            Priority: Major
>             Fix For: 1.11.0, 1.12
>
>
> {panel}
> *As a* loan manager 
> *I want to* suspend interest accrual or accelerate maturity
> *in order to* account only income which will be actually realized
> {panel}
> h3. *Background and details:*
> At the time of charge off there can be different options how to handle future interest income. Either calculating with 0 interest or make all future principal due immediately.  
> _Setting_ for interest bearing products to be introduced:
>  * Accelerated maturity 
>  * zero interest
> h4. Zero interest
>  * Once a loan charges off, interest accruals must stop
>  * The schedule should be adjusted to remove interest projections on future periods (after charge off)
>  * The schedule should be adjusted to proportionally decrease interest on current period (where charge off occurred)
>  * Once accounting entries have posted for charge off, no further interest accruals can occur on the loan
>  * Any further debit / credit adjustments (chargeback) post charge off will also be immediately go through the charged off accounting treatment
>  * Any repayment reversal before charge off will reverse/replay the charge off and would in effect increase the charged off principal and interest amounts
> h5. Main elements:
>  * Change schedule: future interest → $0
>  * No accrual (job)
>  * Transaction and validation of journal entries
> h4. Accelerated maturity
> When accelerate maturity to charge off date is set in a loan product and the loan is charged off:
>  * New and final installment is created with due date of the charge-off date containing all future balance
>  * Installments after charge off date will be removed.
>  * interest pending till charge off date is added to the new and final installment
>  * interest isn’t calculated for the new last and final installment
>  * Accounting will adopt charge off
>  * Relevant events sent. (account changed)



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