Santosh Math created FINERACT-307:
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Summary: Accruals accounting does not accrue income on loans
closed prematurely
Key: FINERACT-307
URL: https://issues.apache.org/jira/browse/FINERACT-307
Project: Apache Fineract
Issue Type: Bug
Components: Loan
Reporter: Santosh Math
Assignee: Markus Geiss
Reported by Sander at https://mifosforge.jira.com/browse/MIFOSX-2093
Original Description:
If a customer makes the final payment before the end of the loan schedule the
loan status changes to closed, and the balance reports 0, which is correct.
These loans are non-recalculating and accrue interest in line with their
schedules (periodic). As such all interest portions are booked into the
Interest Receivable account.
However because of the closed status the accruals batch job no longer generates
the periodic accruals for this loan (query excludes any status which is not
active). As a result a part of this income will remain in the Interest
receivable account indefinitely, which is not the expected behaviour. We would
either expect the accruals to continue in line with the schedule, or for the
accrual to be generated alongside the final (closing) transaction of the loan.
The quick-fix for this is to adjust the batch job to look not just look at loan
status but also at any loan where the interest accrual date is smaller than the
expected maturity date.
As a permanent fix we should investigate whether new accounting types/rules
need to be defined for this scenario to also book this prepaid income as a
liability instead of an asset account, such as Prepaid Interest received.
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