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In some cases a change to an amortization rule results in the system recalculating the yield during processing. In other cases the system does not need to recalculate the yield after an amortization change, and no recalculation occurs. This section describes the conditions under which Eagle Accounting does and does not recalculate the yield during processing after an amortization rule change. 

An amortization rule change, for purposes of this discussion, refers to a scenario where an existing amortization rule requires a change as of a certain point in time. The old rule ends, and the new rule begins to take its place. For example, the amortization rule currently processes using the Constant Yield 1 amortization method, and as of a certain date, you plan to change the amortization method to Level Yield 2. In this case, you edit the existing amortization rule with the old amortization method and enter the Rule End Date. Then you create a new amortization rule with the new amortization method and with a Rule Begin Date that indicates when the new rule begins. For example, the End Date of a previous amortization rule is December 31st, and the Begin Date of the new amortization rule is January 1st.

During Earnings processing, the system checks the amortization rule Instance (tag 4256) to determine whether the amortization rule changed. If the amortization rule did change, the system identifies which values changed between the old amortization rule and the new amortization rule. It uses this information, along with additional criteria, to determine whether it is necessary for the system to recalculate the yield. The system only recalculates the yield when the change to the amortization rule meets the criteria that indicates that the change has an impact on the yield result and the yield recalculation is necessary.

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For example, in the following table, the first row indicates that the system needs to recalculate the yield in cases when you change the Amortization Accretion Method (tag 113) field value, but only in some cases. It recalculates the yield if you change the Amortization Accretion Method value and if the value changed from the previous day. It does not recalculate the yield if you change the Amortization Accretion Method value but the value did not change from the previous day. For a description of each field, see Amortization & Accretion Rules Panel Options.

Option Type 

If Option Value Changes

Tag

And If You Meet This Criteria, Recalculate the Yield

Core amortization 

Amortization/Accretion Method

113

Amortization/Accretion Method value changed from the previous day.

Core amortization 

Amortization/Accretion Election

3933

Amortization/Accretion Election value changed from the previous day.

OR

Amortization/Accretion Election value changes from None to another value. Or Amortization/Accretion Election value changes from another value to None. 

Core amortization 

Amortization Methodology

16007

Amortization Methodology value changed from the previous day.

Core amortization 

Yield Type

17468

Yield Type value changed from the previous day.

Call / Put / Prerefunded

Recognize Pre-refunding

3860

Security has a prerefunded schedule defined.

Call / Put / Prerefunded

Recognize Put Date & Prices

3937

Security has a put schedule defined.

Call / Put / Prerefunded

Recognize Call Date & Prices

3939

Security has a call schedule defined.

OID

DeMinimis Test Application

3935

The lot, security, and position are all OID eligible. For example, the OID Indicator (tag 218) value is Yes. 

OID

Recognize OID

9197

The lot, security, and position are all OID eligible. For example, the OID Indicator (tag 218) value is Yes. 

OID

Amortization/Accretion Method 2
(hidden field in panel)

11581

The lot, security, and position are all OID eligible. For example, the OID Indicator (tag 218) value is Yes. 

MBS

Prepayment Speed Override
(field hidden in panel)

9689

Security is factor based. That is, the security's processing security type begins with DBFB or the security's processing security type is TBA (DBTATA). 

MBS

Estimate Vs. Actual
(hidden field in panel)

9690

Security is factor based. That is, the security's processing security type begins with DBFB or the security's processing security type is TBA (DBTATA). 

MBS

Override Prepayment Model
(hidden field in panel)

9691

Security is factor based. That is, the security's processing security type begins with DBFB or the security's processing security type is TBA (DBTATA). 

MBS

Override Prepayment Speed
(hidden field in panel)

9692

Security is factor based. That is, the security's processing security type begins with DBFB or the security's processing security type is TBA (DBTATA). 

MBS

Prepayment Assumption

4518

Security is factor based. That is, the security's processing security type begins with DBFB or the security's processing security type is TBA (DBTATA). 

MBS

Prepayment Time Series Source

16110

Security is factor based. That is, the security's processing security type begins with DBFB or the security's processing security type is TBA (DBTATA). 

MBS

Effective Maturity Date Method

16650

Security is factor based. That is, the security's processing security type begins with DBFB or the security's processing security type is TBA (DBTATA). 

Cash Flow

Use Third Party Cash Flows

11768

Security has cash flows.

Cash Flow

Source Number
(hidden field in panel)

1168

Security has cash flows.

Cash Flow

Cash Flow Type

11760

Security has cash flows.

Cash Flow

Requested Speed

11761

Security has cash flows.

Step Bond

Step Bond Utilize Bifurcation Method

3934

Security is a step bond. Eagle Accounting recognizes a security as a step bond when you set the Coupon Type Code (tag 97) option to Step Rate (S).

Amort on Shorts

Allow Amortization on Short Positions

11484

Position is held short and the position is flagged for short amortization. That is, you set the tax lot's Allow Short Amort (tag 11484) field to Yes in the trade panel.

User Defined Amortization Schedule

Use User Defined Amortization Schedule

9156

Lot has a user-defined amortization schedule.

Convertible Bond

Convertible Option Price Method

3858

Security is a convertible bond. That is, the security's Convertible Indicator (tag 1531) has a value of Yes. 

Straight-line Override

Straight Line Override

3938

Position is amortizing within the straight-line override period. That is, the field applies the straight line actual (SLA) method within 60, 180, or 365 days from maturity, and the earn thru date is within that period nearing maturity.