Creating Amortizing or Accreting Transactions Manually

To create amortizing or accreting transactions manually:

Note:

An administrator can control whether users are able to enter amortizing or accreting transactions manually. This is controlled by an Enable Amortization/Accretion checkbox in Formats.

  1. Follow the procedure Adding Transactions Manually.
  2. Optional: To designate whether a transaction is amortizing or accreting, select Amortizing, Accreting.
  3. Enter the following fields in the Transaction Detail panel:
    • Original Amount: The amount used to calculate the amortization or accretion value.

    • This Period: Calculated by the system based on the Method selected by the user (see "Method" below). The value reflects the amount of amortization that applies to the period to which the reconciliation pertains.

    • Ending Amount:

      • For amortizing amounts, Ending Amount is calculated as the Original amount minus the Cumulative Amortization amounts for all periods up to and including the period to which the reconciliation pertains. The Ending Amount for amortizing transactions must result in a 0.00 balance; otherwise, an error is displayed. You must manually correct the transaction to render a zero ending balance.

      • For accreting amounts, Ending Amount starts at 0.00 and increases each period by the Monthly Accretion amount to the full amount.

    • Method:

      Select one:

      • Straight line—Causes the transaction value to decrease by an equal amount each period.

      • Actual—Causes the transaction value to decrease (for amortizing) or increase (for accreting) by an amount that reflects the actual number of days in each period.

      • Custom—Causes the transaction value to decrease (for amortizing) or increase (for accreting) by an equal amount each period.

        Allows you to customize the monthly amortizing and accreting amounts. By default, the system starts with a straight-line amortization configuration. Therefore, when the custom method is chosen, the dialog appears exactly as it does for the straight line use case, with two exceptions:

        • The Amortization column in the Amortization Schedule table is editable for the base currency bucket. You edit the monthly amortization amounts, or import the full Amortization schedule.

        • No half-month convention check box is displayed.

        How the value is calculated from one period to the next depends on the amortization method. The Ending Amount for amortizing transactions must result in a 0.00 balance; otherwise, an error is displayed. You must manually correct the transaction to render a zero ending balance.

        Accreting transactions work similarly to amortizing transactions. However, the Ending Amount for accreting transactions starts at 0.00 and increases each period by the Monthly Amortization amount to the full amount.

    • Half-month convention: If selected, the first and last period reflect a half month of amortization. For example, if a full month of amortization is $100, then the first and last month reflects only $50 of amortization. All other months reflect the full $100 of amortization

    • Start Period: For Straight Line or Custom—Determines the first month that amortization occurs.

    • Number of Periods: Determines the number of amortized periods.

    • Remaining Periods: A value calculated by the system based on the period pertaining to the Reconciliation Period, such as, Start Period, and Number of Periods.

      Start Date and End Date: For Actual—Determines the amortization or accretion range.

  4. For Straight Line or Custom: On the Amortization Schedule tab, select the Currency Bucket and then view the beginning, ending, and amortization amounts.
  5. Click Save.