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From "Santosh Math (JIRA)" <j...@apache.org>
Subject [jira] [Created] (FINERACT-282) Backdate before Interest Waiver corrupts loan balances
Date Thu, 08 Dec 2016 05:28:58 GMT
Santosh Math created FINERACT-282:
-------------------------------------

             Summary: Backdate before Interest Waiver corrupts loan balances
                 Key: FINERACT-282
                 URL: https://issues.apache.org/jira/browse/FINERACT-282
             Project: Apache Fineract
          Issue Type: Bug
          Components: Loan
            Reporter: Santosh Math
            Assignee: Markus Geiss


Reported by Sander at https://mifosforge.jira.com/browse/MIFOSX-1498
Original Description:
When waiving interest on a loan the outstanding interest and balance is reduced by clearing
outstanding interest on past instalments and if applicable future instalments (as expected).
However when a payment is now backdated to a date before the interest waiver, interest is
that was waived on those instalments is 'activated' again and the payment is allocated to
it.
In the attached screenshot #1 is the 'clean' schedule of the loan with 4.11 in interest due.
The total due on the loan is 254.11. In the screenshot #2 the interest has been waived per
the 1st of June, leaving a loan balance of 235.32 (screenshot #3).
Now when a new transaction is entered, for the 15th of May (so before waiver), of 15$ , the
expected loan balance would be 220.32, however the payment 'reopens' the interest for the
instalments it is covering (see screenshot #4) and repays them. As a result the total outstanding
is 220.48 (one instalment interest has been paid, but was not part of the balance before).
And also when the sum of all transactions is made manually it no longer adds up (screenshot
#5) to the system generated balances.
Because of the way MifosX handles the loanschedules and transactions, the waiver has automatically
been reversed when processing the backdated payment (which is chronologically before the later
payment) and then applies the waiver again later, at which point the interest due is fewer
than the waiver is for. This results in an adjustment of the overall loan, and also brings
up a situation whereby the loan summary data is no longer aligned with the transactions. And
the accounting data is also out of sync, as the accrued interest no longer adds up to the
waived + paid interest on the loan.
As the waiving of interest normally is a process that can work both backwards (open installments
from before) and forwards (future installments), we would expect that the interest for the
prior installments would remain waived.



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