Eagle Accounting allows you to use custom sink schedules rather than sink schedules with sinking fund securities in cases where you need the ability cancel and correct sink payments for securities for which the payment differs from what is expected. Custom sink schedules allow you to address a scenario which can occur for private placements where the actual sinking fund payments often differ from the expected sinking fund payments based on predefined schedule data, and you need to process the revised sink payments easily.
Using custom sink schedules allows you to process revised sink payments by modifying the data in the TRADESDBO.CORP_ACT_HIST table without needing to modify the RULESDBO.SCHEDULE data for the purpose of accounting for unexpected differences in cash that are received. The expectation is that you will eventually modify the sink schedule data in both tables to reflect the impact of the unexpected cash difference (surplus or deficit) on future payments. If you do not maintain the schedule data appropriately, you can encounter unexpected gains/losses on sink payments due to amortization differences that occur as a result of incorrect yields being used going forward.
When you use custom sink schedules to process sinking fund payments, you specify the Custom Sinking Fund Schedule in the Schedule table and you specify the corresponding Sinking Fund Schedule in the Corporate Action table. The Add Schedule procedure automatically updates the corporate action record. You add the sink payments as sink percentages. For example, you enter a 10% Sinking Fund Payment as .10. The entire Sinking Fund Schedule must add up to 1.00 in each of the tables when you define a typical sinking fund schedule. However, you can set up a custom sink schedule to bypass the requirement to add up to 1.00 in each of the tables.
When you use custom sink schedules, there is an underlying assumption that, temporarily, there will be a difference between schedule data and the corresponding corporate action data. This workflow accommodates the need to match cash activity produced by revised sink payment actions versus the actual payments received, with the expectation that the schedule data will be ultimately be adjusted to reflect the actual cash payments received.
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