A sinking fund is a security with a defined principal repayment schedule. Sinking funds can be any form of corporate or government fixed income or preferred security. Eagle Accounting recognizes a security as a sinking fund bond when the security's Sink Flag (tag 1780) option is set to Yes. Also, when the security master record has Sink Flag set to Yes, the system expects you to populate a sinking fund schedule, both in the Schedule table and in the Corporate Action table.
When you populate the Schedule table, the sinking fund schedule is based on the percentage sunk. For example, if the Original Issue Amount was $1,000,000, and the Sinking Fund Percentage is .1%, the amount posted is $1,000. The entire Sinking Fund schedule must add up to 1 (100%).
When you populate the Corporate Action table with the Sinking Fund schedule, it is based on the percentage sunk. For example, if the Original Issue Amount is $1,000,000 and the Sinking Fund Percentage is .1%, the amount posted is $1,000. The entire sinking fund schedule must add up to 1 (100%). The sinking fund payment is processed with a Transaction Type of Sink.
Note: |
When Eagle Accounting creates a Sink schedule in the Schedule table, Eagle Accounting automatically creates a Sinking Payment schedule in the Corporate Action table. For more information about managing schedules, see the Reference Data section of this guide. |
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