11.5 Initiating a Future Value Dated Contract

A future dated loan is one that has a Value Date that is later than the date on which it is booked. The Automatic Contract Update function initiates the loan on the Value Date of the loan.

If there were holiday(s) preceding today, future dated loans that were dated for the holiday(s) are also to be initiated if you have specified that events falling on a holiday should be processed on the next working day.

All the initiation related entries specified for the product, that the loan involves, are passed automatically. If currency conversions are involved, the conversion rates as of today are picked up from the Currency Table.

If the loan is linked to a commitment, the commitment utilization is updated. In addition, the contingent entries passed when the commitment was initiated is reversed to the extent of the loan amount linked. If the available balance in the commitment is not enough to cover the entire loan amount linked, the loan is not initiated. This is reported in the Exception Report.

For future dated contracts that fall due today, if there is a rate change today, the interest amounts are recalculated for the schedules.