5.4 Processing Amendment on Derivatives Contract Details Screen

This topic describes the amendment processing using the Derivatives Contract Details screen.

You can amend derivative deals from Contract input screen, system allows amendment of In leg and Out Leg Principal amounts upon pressing the unlock button. The Principal amount can be either increased or decreased during the life cycle of the contract even after initiation and authorization.

On such financial amendment operation system accepts it as a plain amendment with version change triggering Derivatives amendment (DAMN) event posting principal increase or decrease entries. An amendment confirmation gets generated on amendment event.

On Amendment, the notional amount is updated in the principal schedule as well as on principal explode.

When in leg principal is amended, out leg principal is also recalculated based on the exchange rate.

Accrual after amendment should be posted with New notional amount.

Cash flow should show a separate row for amendment. Only the amended amount is shown with pay or receive based on increase or decrease of the notional leg. Interest cash flow is updated based on the latest outstanding amount.

On notional amendment for a amortized schedule contract, system adjusts the amended amount for future schedule.

On the notional amendment, system automatically inserts a record in principal schedule with next payment schedule having split of amended notional amount. Past principal schedule should be disabled.

If user explodes the schedule after amendment, the system rebuilds the schedule. If user saves amendment without exploding the schedules, system rebuilds schedule on save.