6/1/2019 Bug 26696067

Bug 26696067 : ER-FA LEASE RATE CALCULATION BY PAYMENT PERIOD

Bug Attributes

Fixed in Product
Type E - Enhancement
Version
3 - Somewhat
Severity Product Version 12.2.3
desirable feature
289 -
15 - Enhancement
GENERIC
Status Req. Internal Platform
(All
(Oracle) Review
Platforms)
Created 25-Aug-2017 Platform Version NO DATA
Updated 30-Apr-2019 Base Bug N/A

Database
11.2.0.4 Affects Platforms Generic
Version
Knowledge, Patches
Product
Oracle and Bugs related to
Source
this bug

Related Products

Line Oracle E-Business Suite Family Financial Management

Area Assets & Real Estate Product 503 - Oracle Assets

Hdr: 26696067 11.2.0.4 LEASE 12.2.3 PRODID-503 PORTID-289

Abstract: ER-FA LEASE RATE CALCULATION BY PAYMENT PERIOD

*** 08/25/17 06:07 am *** (ADD: Impact/Symptom->FUNCTIONAL )

*** 08/25/17 06:07 am DISCUSSION ***

BUG TYPE CHOSEN

===============
ENH

== Product: Oracle Assets (503) ==

==================================
ENHANCEMENT REQUEST DESCRIPTION
===============================
Per User Guide, Annual Interest is divided evenly by payment periods:

Section: Lease Evaluation

Example 1: Set Up Lease
12% annual, with 12 payment periods per year:
(a) The interest rate per period (in this example, 12%/12=1%) multiplied by
the prior period lease obligation, except for the 3/1/93 payment; since no
time has elapsed, no interest has accrued.

Example 2: Set Up Payment Schedule

10% annual, with 2 payment period per year (Jan & Jul)
(a) The interest rate per period (in this example, 10%/2=5%) multiplied by
the prior period lease obligation, except for the 3/1/93 payment; since no
time has elapsed, no interest has accrued.

Customer expects:
We would say that the formula used by Oracle to calculate a monthly or
quarterly rate from an annual rate, is wrong.

Please check this link below :

http://www.experiglot.com/2006/06/07/how-to-convert-from-an-annual-rate-to-an-

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6/1/2019 Bug 26696067
effective-periodic-rate-javascript-calculator/

Effective rate for period = (1 + annual rate)(1 / # of periods) ¿ 1

So, when we set an interest rate of 12%, we should have a monthly rate of
~0,95% :
((1 + 0,12)^(1/12) -1) = 0,009488793 = ~0,95%

For a quarterly rate : ((1 + 0,12)^(1/4) -1) = 0,028737345 = ~2,87%

Due to this error, all the Interest and Reduction of Principal calculated by
Oracle are wrong.

I think that a ticket should be open to Oracle dev team.

BUSINESS NEED
=============
Needs monthly or quarterly rate calculation modified to meet business need.

*** 08/25/17 06:07 am ***

*** 08/29/17 01:29 pm REQUEST TEXT ***
*** 08/16/18 12:21 pm ***
*** 04/30/19 02:13 am ***

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