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https://issues.apache.org/jira/browse/FINERACT-2148?page=com.atlassian.jira.plugin.system.issuetabpanels:all-tabpanel
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Mihaly Dallos resolved FINERACT-2148.
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Resolution: Fixed
> 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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