About Funding Options

Funding Options enables you to pay off debt accounts with cash from surplus accounts. You specify which surplus accounts go to which debt accounts, and the order they should be repaid. You can specify fund sources the company should borrow from in paying deficits. You can identify affordable dividends, handling of common and preferred stocks, and issuance or repurchase of shares.

Account Types

Account type refers to the revolver or term settings of Notes Payable and Long-Term Debt: Scheduled, and equity accounts such as preferred, common, contra-equity, and dividends. It is listed in the Type column for each account on every tab of the Funding Options dialog.

You cannot change account types of asset accounts (Marketable Securities, Excess Marketable Securities, and Long-Term Funding Asset) or Long-Term Debt: Excess. The remaining debt accounts can be specified as revolving or term accounts. To change account type, click the Type cell next to the account. These accounts may be defined as revolving or term accounts:

• Notes Payable (Short-Term Debt) (v2520.00) or its subaccounts

• Long-Term Debt: Scheduled (v2660.00) or its subaccounts

Surplus and Deficit Settings

Use the Surplus or Deficit columns to specify whether accounts are used for cash surpluses or deficits. Select the Surplus column to use cash surpluses to repay a revolving debt facility, prepay a term debt facility, or to accumulate in asset accounts. Select the Deficit column to use a debt instrument or funding asset account to fund a cash deficit.

Note:

You cannot change the two cash balancing accounts (Excess Marketable Securities and Long-Term Debt: Excess) surplus/deficit settings—both function as sources or uses in the case of a cash surplus or deficit in your model.

Order of Repayment and Funding

In the Funding Options dialog, use "Apply Cash Surplus to" and "Fund Cash Deficit with" to specify the order of account use, in the event of cash surpluses or deficits. To reorder, click and drag accounts to different positions in the list.

Order	Apply Cash Surplus to...	Order	Fund Cash Deficits with...
First	L-T Debt: Excess	First	Excess Marketable Securities
Next	Other Selected Surplus Accounts	Next	Other Selected Deficit Accounts
Last	Excess Marketable Securities	Last	L-T Debt: Excess

With a cash surplus, by default, Long-Term Debt: Excess is reduced first if a balance exists. Funds remaining, after reducing other surplus accounts selected, accumulate in Excess Marketable Securities. With a cash deficit, by default, Excess Marketable Securities is used as funding first. If there is still cash deficit after other selected funding accounts are used up to their forecasted limits. Long-Term Debt: Excess funds the remaining cash deficit in its entirety.

Note:

Excess Marketable Securities is last in the Apply Cash Surplus to... order and by default is first in the Fund Cash Deficit with... order. Long-Term Debt: Excess is by default first in the Apply Cash Surplus to... order and last in the Fund Cash Deficits with ... order.

When do Funding Options Balance?

Funding Options never attempt to balance funding during historical or actual periods, so you may see non-zero values in Net Funds Flow Source (Use) (v3040) in historical or actual periods.

Funding Options balance all input periods that are neither historical nor actual periods. These are typically called input forecast periods, but actual periods may occur in what are typically forecast periods.

When there is a forecast leaf period (a non-aggregate period) that is not an input period because its values are interpolated using inputs from a period-to-date or trailing period, Funding Options balance that period unless it is the last period before the input period-to-date or trailing period that is driving it’s values.