Balloon Payment Residual Value Calculation
Overview
Account Types now expose a new option, Use Residual Value calculation method for Balloon Payments?, on the Payments page. When enabled, the system uses the same calculation engine that drives Residual Values to compute the Balloon Payment, ensuring the scheduled balloon amount matches the configured value to the cent.
The legacy balloon calculation could produce small rounding differences. For example, a Balloon Payment of $25,950.00 might end up scheduled as $25,949.33 — a discrepancy of $0.67. While that may be acceptable for some products, certain finance contracts (and some downstream finance disclosures) require the balloon amount to land exactly on the contracted figure. The Residual Value Balloon Payment (RVBP) calculation removes that drift entirely.
This option is available in both finPOWER Connect Desktop and finPOWER Connect Cloud. The Account Type business layer carries the new OptionPaymentsUseResidualCalcForBalloon property, and the HtmlWidget_AccountTypeEdit widget exposes the same checkbox in Cloud from version 1.09 (J036474) onward.
Prerequisites
Setup & Configuration
The new option is set per Account Type. There is no global toggle — you choose, on each Account Type, whether the Balloon Payment should be calculated using the Residual Value method.
In Desktop, go to Administration, Account Types. In Cloud, navigate to Administration, Account Types — the list opens via the same Account Type Edit widget.
Open the Account Type you want to configure. This must be an Account Type that already uses Balloon Payments — the new option only applies when balloon scheduling is in effect.
Select the Payments page on the Account Type. This is where the existing balloon-related options live.
Enable this option to switch the Balloon Payment calculation to the Residual Value method. As soon as the option is ticked, two related options are disabled (see the table below).
Save and close. New Accounts created against this Account Type will calculate their Balloon Payment using the Residual Value method.
Options affected by enabling RVBP
| Option | Behaviour when RVBP is on |
|---|---|
| Use Residual Value calculation method for Balloon Payments? | The new switch. When ticked, the Balloon Payment is calculated using the Residual Value engine, ensuring the scheduled amount matches the configured Balloon Payment exactly. |
| Include Regular Payment with Balloon Payment? | Disabled (unavailable) when RVBP is on. The Residual Value calculation does not combine a regular payment with the balloon. |
| Adjust Final Payment before Balloon Payment? | Disabled (unavailable) when RVBP is on. The Residual Value calculation guarantees the balloon lands on the contracted figure without needing to adjust the prior payment. |
How to Use
Once an Account Type is configured to use the Residual Value calculation method for Balloon Payments, the change applies automatically to any new Account created against it.
Use the New Account wizard, selecting the Account Type that has RVBP enabled. Specify the Balloon Payment amount as you normally would.
Open the Account Schedule. The Balloon Payment in the schedule will match the configured Balloon Payment amount exactly — for example, a Balloon Payment of $25,950.00 will appear as $25,950.00 in the schedule, not $25,949.33.
Because RVBP forces the balloon to be exact, any rounding is absorbed across the regular payments instead of the final balloon. Confirm the regular payment amount is acceptable for your finance contract.
Platform Differences
The new option is exposed identically on both platforms — the calculation itself is in the business layer, so the result is the same regardless of where the Account Type is edited or where the Account is opened.
| Aspect | Desktop | Cloud |
|---|---|---|
| Where the option appears | Account Types form, Payments page | Account Type Edit widget (HtmlWidget_AccountTypeEdit) v1.09 or later, Payments page |
| Calculation engine | Business layer (shared) | Business layer (shared) |
| Disabling related options | The two affected options become read-only on tick. | The two affected options become read-only on tick. |
Tips & Best Practices
Enable RVBP on Account Types where balloon precision matters — for example, structured finance contracts where the disclosed balloon amount must appear exactly on the schedule. For products where small rounding is tolerable, the legacy calculation remains a valid choice.
Just like accounts with Residual Values, prepaid Accounts that use RVBP exclude the balloon payment from the schedule. Once an Account is prepaid, the original Balloon Payment date and amount are no longer accurate. Always review prepaid Accounts manually to confirm the balloon is handled appropriately.
An Account cannot combine a Balloon Payment with a Residual Value — they are alternative ways of expressing the same end-of-term amount. Only one option per Account is supported.
Knowledge Base References
Browse the live KB listings for v6.00.03 on the Intersoft support site:
The Knowledge Base articles consolidated into this release notes page: