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IRR_Calculation

IRR_Calculation

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Last updated: Sept 05, 2024Version comment
1 min read

  • Codeunit 7026398, CalculateInterestAmounts using CalcXIRR

  • This is a financial indicator – the calculation of the internal rate of return. The calculation of this indicator is not a legislative obligation.

  • The resulting value differs from the Calculation Interest Rate p.a.% if the contract contains a calculation input that only enters the interest and not the principal.

  • The IRR is always calculated independently of the type of financing, the person of the contract or other parameters if the flag Calculate IRR = Yes is filled in on the contract header.

IRR Calculation Methodology % (IRR%), IRR (microsoft.com)) in the OC standard is as follows:

The system compiles cash flow contracts from the following into the pace table:

  • Input Price) as of the day of handover of the object (negatively) taking into account calculation inputs such as cost/revenue commission and fees, which are marked with the APR Calculation flag = Yes

  • Payments according to the payment schedule (principal + interest) on the due date

  • Residual Price as Last Cash Flow Line (Residual Value Calculated) at Expected Termination Date

  • It uses the XIRR function to calculate the "internal rate of return" of this cash flow

  • The calculation model is shown here: