Capitalization settings

Capitalization settings

To be able to capitalize accrued interest at the right time an account type has to be associated with a capitalization type. This determines when an account will be capitalized.

There are different types of capitalization, described below: 

To add a new capitalization setting select account in the drop-down menu, only account types that has no setting will be visible in the drop-down menu. Once the selection of an account type is made a new drop-down is visible where we can select capitalization type.
Click the button Add setting to add a new setting. 

You will receive two popup tickets, select yes and ok to create the new setting. 

The new setting is now added in the list. 

We can always change or remove a setting. Click the pencil icon  to change capitalization type or click the  to remove the setting. 

Tax withholding 

When interest is capitalized in some cases the government tax should be withheld by the house.

Mark the checkbox if you want to enable the setting to automatically withhold tax on capitalization.

Select the tax rate in the input box.  

At last select which house account should be used for the tax withholding transactions. The tax withheld will be transferred into a house account from the customer account so that the house can pass this on to the local tax agency. The account selected below will be the receiver of the tax.