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Therefore, for securities such as these, Eagle Accounting calculates only an interest component out to the maturity date of the security, or to the effective maturity date if the effective date exists in the Prepayment Time Series table. Eagle Accounting calculates the principal repayment on the Maturity Date/Effective Maturity Date. Eagle Accounting then discounts that cash flow to create the yield to maturity. The effective maturity date can change over time, and when that value changes, Eagle Accounting prospectively calculates a new amortization yield for the coupon period using the new effective date of the change. For information about Prepayment Time Series information, see Understand Prepayment Time Series Information.
When you set up an amortization & accretion rule for credit card securities, by default, the panel defaults the Prepayment Assumption field to EMD (Effective Maturity Date) and sets the Effective Maturity Date Method to Soft Bullet Payment. You can use the effective maturity date (EMD) for both credit card and non-credit card ABS/MBS securities for the purpose of determining cash flows, deriving an amortization yield, and calculating an amortization/accretion amount in Eagle Accounting. For more information, see Amortization & Accretion Rules Panel Options and Understand the Prepayment Assumption Option.
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