Special Accounting Considerations
The transaction codes and interest accruals in the Nortridge Loan System are set, by default, for accrual based accounting. Most loans post a credit to interest income for the amount of the interest which has accrued. However, for certain types of pre-computed interest loans, the interest for the purpose of determining the payment amount may be determined by the rule of 78s while the interest for the purpose of posting income to the ledger is determined by the actuarial method. This requires a more complex configuration of the general ledger setup.
This chapter will detail the specific default configurations, and what changes need to be made in the transaction code and loan group setups in order to configure for any interest mode other than standard (non-rule of 78s actuarial) accrual basis accounting.
For information on specific topics, see: