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This page describes some of the coupon period fields that you can use when you set up fixed income securities for use with Eagle Accounting. Also see the pages for additional options, About the Coupon and Coupon Type Code Fields, About Day Count Basis, and About Payment Frequencies. 

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The system uses the Business Day Convention (tag 1536) in conjunction with Payment Frequency (tag 472), and it can also be used in conjunction with Day of the Month Override (tag 1533) (provided that field's value is set to Week Day of Coupon), to determine how Eagle Accounting should calculate a coupon period when the coupon end or begin date occurs on a non-business day (or when a coupon should pay if the scheduled coupon due date occurs on a non-business day). Whether or not a day is a business day is determined by the calendar for the security's Issue Country, and not the entity's calendar. The difference between adjusted and unadjusted elements of the business day payment conventions has to do with whether accruals are affected by rolling from one payment date to the next. Adjusted Business Day Conventions have their coupon periods and accruals adjusted for non-business days, and unadjusted Business Day Conventions have the actual Settlement Date of the coupon adjusted, based on business days. The valid Business Day Convention codes and the corresponding Business Day Conventions follow.

• Modified Business Day Following – Adjusted (ADJMBC). If a coupon is scheduled to pay on a nonbusiness day, with a Modified Business Day ConventionFollowing - Adjusted option, the coupon period end date is adjusted to include the next business day, unless the next business day falls in the next calendar month; in such a case, the coupon end date are adjusted back to the first business day preceding the non-business day. The owner of the bond is compensated for the extra days of interest accrued if the bond is paid on the next business day, or not compensated in the event that the bond is paid earlier.
• Modified Business Day Following – Unadjusted (MBC). If a coupon is scheduled to pay on a nonbusiness day, the coupon is paid on the next business day, unless the next business day falls in the next calendar month; in such a case, the payment date is the first business day preceding the non-business day. With the Modified Business Day ConventionFollowing - Unadjusted option, the actual Settlement Date of the coupon is changed, but the coupon period begin and end dates remain unchanged.
• Following Business Day – Adjusted (ADJFWD). If a coupon is scheduled to pay on a nonbusiness day, the coupon period end date is adjusted to include the next business day, and the owner of the security is compensated for the extra day of interest.
• Following Business Day – Unadjusted (FWD). If a coupon is scheduled to pay on a nonbusiness day, the coupon is paid on the next business day, and the owner of the security is not compensated for the extra day of interest. With Following Business Day Convention-Unadjusted, the actual Settlement Date of the coupon is changed, but the coupon period begin and end dates remain unchanged.
• Following Business Day - Adjusted Modified Payment Roll (ADJROLL). This option supports bonds with an adjusted forward payment roll convention. A forward roll payment roll convention occurs when the coupon period is adjusted forward due to a non-business day. In this case, the coupon schedule does not revert back to the previous scheduled coupon day but rolls forward based on the new coupon day.
  For example, a bond with a forward roll payment convention has a scheduled coupon date of the 17th of a month and the 17th occurs on a non-business day. Therefore, the coupon is paid on the next business day. In this example, the 18th of the month is the next business day and the owner of the bond is compensated one extra day of interest as a result of extending the coupon period. However, with the forward roll payment convention, the next coupon date does not revert back to the 17th of the month, but rather the next future scheduled coupon date to pay occurs on the 18th of the month, rolling forward, providing that day does occur on a business day.
• Preceding Business Day – Adjusted (ADJBACK). If a coupon is scheduled to pay on a nonbusiness day, the coupon is paid on the first business day preceding the non-business day.
• Preceding Business Day – Unadjusted (BACK). If a coupon is scheduled to pay on a nonbusiness day, the coupon is paid on the first business day preceding the non-business day.

Consider the example of a security paying on the fourth Thursday of every month. In the United States, the fourth Thursday in November is the Thanksgiving Day Holiday, and is therefore a nonbusiness day. If an issuer of this security pays the coupon on the next business day, and adjusts the coupon payment based on rolling the coupon end date forward, the SMF setup would be as follows. See the following figure that shows Issue Viewer's Long Term Debt panel with a Business Day Convention field set to Following Business Day - Adjusted. 

Coupon Day of Month

Coupon Day of Month (tag 10551). Specifies the day of the month in which the coupon is payable. If you select a value for Business Day Convention (tag 1536) other than None, you must specify the day of the month on which the coupon pays. You can enter a value from 1 to 31.

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If you want to set up a security that pays on the fourth Thursday of every month, you must set the Payment Frequency field to Monthly and the Day of Month Override field to WDC (Week Day of First Coupon). Eagle Accounting then determines which day of the month is the First Coupon Date, and generates the coupon schedule from that point forward. Again, note that the First Coupon Date and Last Coupon Date must be in sync, based on the Payment Frequency field and Day of Month Override values. An example of this setup follows. The following figure shows the Issue Viewer tool's Long Term Debt panel. 

Interest Payment Timing 

Interest Payment Timing (tag 1523). Determines the coupon dates, when more than one possible set of coupon dates can be calculated. If you leave the field value null, by default Eagle Accounting uses the last day of the month for calculating coupons. For example, if the First and Last Coupon Dates of a security are the fifteenth of a month, and you entered Last Day of the Month in the Interest Payment Timing field, the Eagle Accounting earnings process recognizes that the Interest Payment Timing frequency is an invalid entry. Options include:

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