Example A - Rollback and Replay

This example illustrates Rollback/Replay and Retro Amortization, the second Eagle Accounting processing principle.

Variable Rate Change Should Have Occurred in a Prior Coupon Period

In this example you purchase a security into entity TaxDemo2, with a Trade Date and Settle Date on 20140401; Par is 1,000,000, and interest accrued for 16 days. On 20140417, you enter a backdated variable rate of 6%, with an Effective Date of 20140405.

The following table describes the security used for this example.

Results

You roll back earnings to 20140405, and then replay earnings back to 20140417. The effect of this transaction is that Eagle Accounting cancels the previously created income rows and values in the sub ledger, and their corresponding general ledger entries, from 20140405 to 20140417. Eagle Accounting creates new income rows in the sub ledger and general ledger when earnings are replayed. When the earnings transaction is replayed, Eagle Accounting recognizes the 6% Coupon Rate on 20140405 as part of the earnings calculation. Because there is a reference change, Eagle Accounting calculates a new Amortization Yield on 20140405, and Eagle Accounting uses the 6% Accruals from 20140405 going forward, until there is a new rate change.