What is interest calculation capital in SAP FS-AM - Account Management?

SAP Term: interest calculation capital

• Component: FS-AM

• Component Name: Account Management

• Description: The total of all posted disbursements plus the posted capitalized interest, charges, and insurance minus the posted repayments. The system determines the posted repayments as follows: It includes the posted repayment clearing for loans where the payment plan principle applies. It includes the posted repayments for loans where the incoming payment principle applies. The system posts the repayments with the settlement after the installment payment has been received.

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• Key Concepts: 
  Interest calculation capital is a component of the SAP FS-AM Account Management module. It is used to calculate the interest rate on a loan or other financial instrument. The interest rate is calculated based on the amount of capital invested in the loan or instrument, as well as the duration of the loan or instrument. 
  
  How to use it: 
  In order to use interest calculation capital, users must first enter the amount of capital invested in the loan or instrument. This can be done by entering the amount in the “Capital” field in the FS-AM Account Management module. Once this is done, users can then enter the duration of the loan or instrument in the “Duration” field. The interest rate will then be calculated automatically based on these two inputs. 
  
  Tips & Tricks: 
  It is important to remember that interest calculation capital is only one component of the FS-AM Account Management module. Other components such as loan repayment schedules and credit risk analysis must also be taken into account when calculating an interest rate. 
  
  Related Information: 
  For more information about interest calculation capital and other components of the FS-AM Account Management module, please refer to SAP’s official documentation.