Page Comparison

Disbursal

1

Loan Portfolio (A)

Cash (A)

Automated System Accrual Event

2

7-11-2013

A Repayment is Accrued/Recognized on the day it becomes due (both Interest and Fees/Penalties associated with the Repayment shall now be accrued).

The system event shall only kick in when it finds a repayment which is due for that particular day. In this scenario, it would only recognize the first repayment for this loan which is due on the 7th of November 2013.

The Accrual event does not kick in if

• The interest, fees and penalty for the installment has already been paid ( We are now unlinking accruals and repayments)
• The interest/fees and Penalty for the installment has been waived
• The loan is not in an active state (pending transfer etc) ?

Receivable Interest (A)

Income from interest (I)

Receivable Fees (A)

Income from fees (I)

Receivable Penalties (A)

Income from penalties (I)

1st Installments repayment

3

Pays Principal, interest, fees and Penalties associated with this repayment 

Cash (A)

Receivable Interest (A)

Receivable Fees (A)

None of remaining Repayments are due yet, so the Interest/Fees/Penalties associated with them have not yet been recognized.

However, we use the same posting rules for repayments (and let accruals happen independently as per schedule)

Receivable Fees (A)

In case of deletion of a transaction, all accounting entries made for that transaction needs to be reversed.

For deleting (or even editing) an existing transaction, accounting books for that day should not be closed

One of the USP's of MifosX which Organizations have found very convenient had been its Flexibility like the ability to make a repayment as on any date provided, edit any repayment at any point in time, undo a disbursal etc ( of course we can also disable such behavior by closing accounting as on a particular day).

Handling out of turn payments becomes easy with the approach for "delinking" accruals and repayments.

So an "Out of turn" repayment here would do the following

1) Not affect any accruals

2) Cause the platform to inspect all repayments made after the effective date of this out of turn repayment. If this repayment causes the allocation (allotment of the paid amount in a repayment towards principal, interest and fees) of any of the following repayments to change, the repayments are automatically reversed at the portfolio side ( accounting reversals are also made for the reversed transactions). New repayments having the same repayment date and amount (but different allocation) are then created for the reversed repayments. The new repayments are also accounted appropriately

Unlike Cash based accounting which is affected only by Principal Write-off. Accrual Based accounts should respond to the following

• Principal Write-off
• Interest Write-off/Waiver (However, accounting entries are to be made only for that portion of the interest that has been recognized before the waiver)
• Fee write off (However, accounting entries are to be made only for those fees which have been recognized)

We should not allow a write-off before the last payment. Also, after the writeoff, we stop accruing interest/fees and Penalties

Undoing the disbursal does the following

1) Reverses all payments for this loan (and creates subsequent accounting reversals)

2) Reverses all accruals which have happened on this loan (and creates subsequent accounting reversals)