9.7 Procedures for Implementation

All of the methods described earlier employ one of two techniques: Average Day of Runoff and Mid-Bucket. The implementation of these techniques is described per method as follows:

Table 9-1 Implementation of Average Day of Runoff and Mid-Bucket Techniques

Forecast Balance Method	Previous Approach	New Approach
Target End	New instrument added at end of bucket equal to target balance minus the current position ending balance.	The average day of runoff with 100% roll-over plus mid-bucket on new add balance.
Target Average	A new instrument added at beginning of bucket so that the current position average balance plus the average balance of the new instrument equals the target average balance.	The average day of runoff with 100% roll-over plus mid-bucket on new add balance.
New Add End	A new instrument is added at the end of the bucket equal to the new add balance.	Mid-bucket on new add balance.
Roll-over	On non-amortizing accounts, the new business produced from maturing balances is booked on the day of run-off. All other run-offs from non-amortizing instruments (prepayments, payments, total) are booked at the end of the bucket. New business generated from all run-off on amortizing accounts is booked at the end of the bucket.	The average day of runoff with roll-over percentages specified by the user.
Roll-into	New business is generated at the end of the bucket	The average day of runoff with roll-over specified.
Target Growth	It did not exist.	The average day of runoff with 100% roll-over plus mid-bucket on new add balance.

In each case where mid-bucket logic is used, the new add balance will be calculated differently. Following are the different methods for new add balance calculation:

Target End - Target End Balance - Beginning Balance of bucket

Target Average - 2*(Target Average Balance - Bucket Beginning Balance) + Total Runoff - Transaction Strategies Originations - Current Position Originations

Here, Bucket Beginning Balance and Total Runoff include both current and dynamic output (rsult_type_cd of 0 and 1).

Note:

Average formula is a general use statement that helps users to understand how Target Average Balance calculations are made and to validate output. Given the complexities of formula inputs, external detail calculation results may vary.

When you are using Target Average, it is recommended that only Target Average Balance is reported as other financial elements may fluctuate widely to achieve average targets from period to period.

New Add - New Add Balance

Target Growth - Beginning Balance of bucket * growth percent