Set Up Entities for MBS and ABS

Specifies how the system handles the gain/loss on paydowns (repayment of part of an outstanding loan balance) for the entity/accounting basis. This field is used with factor based debt instruments such as mortgage backed securities. Options include:

• Gain/Loss. The system generates a gain/loss on a paydown. You can post the gain/loss to either a capital or general ledger account. The system displays the Paydown Gain Loss Account field.
• Amortization. Default. The system records a gain/loss generated by a paydown as accelerated amortization.

Determines whether the paydown on a gain/loss is posted to the capital or income ledger account for the entity/accounting basis. This field appears when you select Gain/Loss from the Gain/Loss on Paydowns field. Options include:

• Capital. If the position is under 365 days of ownership, the system posts the gain/loss on a paydown to the Realized Gain on Investments Short Term (3006000111) and Realized Loss on Investments Short Term (3006000112) general ledger accounts. If the position is over 365 days of ownership, the system posts it to the Realized Gain on Investments (3006000101) and Realized Loss on Investments (3006000102) general ledger accounts.
• Income. The system posts the gain/loss on a paydown to the Realized Loss on Investments (4004000102) and Realized Gain on Investments (4004000101) general ledger accounts.

Allows you to select the method in which to process the principal loss on a paydown. The system uses the Principal Loss Factor field (tag 2926) value specified for the final factor to process the principal loss. This field is specific to Asset-Backed Securities. Options include:

• Accelerated Amortization. The system reduces the cost of the position by the total reduction of shares. The offset to cost is accelerated amortization. This field is only allowed if the Gain/Loss on Paydowns field is set to Amortization.
• Realized Gain/Loss. Default. The system treats the portion of a paydown that is the result of a loss (write down) at a price of zero.
• Share Adjustment. The system treats the portion of paydown that is a result of a loss (write down) as a share adjustment (increase or decrease) and does not adjust cost for the loss portion.

Determines how the system recognizes amortization and accretion on the General Ledger for securities with a processing security type (PST) of Interest Only Factor Based Debt Instrument (DBFBIO). Options include:

• Separate Income and Amort on Ledger. Bifurcates the income streams with amortization going to an amortization account and the interest going to investment interest income. Eagle Accounting posts amortization and accretion to the following general ledger account after a split: Amortization of Premium (4001000401), Investment Interest Income (4001000100).
• Combine Income and Amort on Ledger. Default. Nets together amortization and accretion in the Investment Interest Income (4001000100) account on the general ledger.