Set Up Securities
When you establish the SMF, the following options apply to sinking fund securities that use sinking fund schedules or custom sinking fund schedules. For general information on using Reference Data Center to set up securities, see Create and Delete Securities. Otherwise, if you use Issue Viewer to set up securities, see Set Up Securities in Issue Viewer.
You can use the following options when you set up sinking fund securities for use with Eagle Accounting.
Option | Tag | Description |
|---|---|---|
| Sink Flag | 1780 | Determines whether the security is eligible for sinking fund payments. Options include:
WRITERS NOTE: revised |
| Pro Rata Sink | 11304 | Indicates whether the security is a Pro Rata sinking fund. The system uses this option in conjunction with the Sinking Fund Payment Redemptions Gain/Loss Flag field in the accounting basis to determine if the entity/accounting basis and security combination should use the Capitalization method or record cost reduction for sinking fund payments as Gain/Loss or as Accelerated Amortization. Options include Yes and No. For more information, see Set Up Entities for Sinking Funds. |
Understand Custom Sinking Fund Schedules
WRITERS NOTE: new section
When you define a custom sinking fund schedule in the Schedule table, the 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. For a typical sinking fund schedule, the entire Sinking Fund schedule must have Schedule Amount values that add up to 1.00 (100%). For a custom sinking fund schedule, you can set up the schedule to avoid the requirement that Schedule Amount values total to 1.00.
For example, say you create a custom sink schedule for a security such as private placement where you do not know the full schedule at the time you create the schedule. While you initially expect four equal payments of 25% each, the actual payments may vary. For example, the first payment you actually receive is 26%, and the second payment you actually receive is 24%. While the four payments total to 1.0 (100%) by the final payment, you do not necessarily know all the actual payment amounts until the security is paid in full, and totals to 1.0 (100%). To accommodate this scenario, Eagle Accounting allows you to define a custom sink schedule that does not require all the payments to total to 1.0 (100%).
When you receive an actual payment that does not correspond to the expected payment, you can modify the custom sinking fund schedule to reflect the actual payment. In this example, while you expect a first payment of 25%, you actually receive a first payment of 26%. You can change the custom sinking fund schedule to change the first payment from 25% to 26%. The system allows you to make this change because the schedule does not require all the payments to total to 100%. It anticipates that the payments will total to 100% by the time you receive the actual final payment.
Add a Custom Sink Schedule
WRITERS NOTE: new section
In the Schedule tab of the Securities workspace, you can add a custom sink schedule for a sinking fund security. For more information about adding schedules in Reference Data Center, see Manage Schedules.
To add a custom sink schedule:
- In Reference Data Center's Reference Desk workspace, click Securities in the left navigation.
You see the Securities workspace with all the available securities. - Select a security, edit the security details, and then click the Schedule tab.
The security must have the Sinking Flag option set to Yes for you to add a sink schedule or a custom sink schedule. - Click Add Security Data.
You see the Add Schedule dialog box. - In the Schedule Type list, click CSTMSINK.
This allows you to add a custom sink schedule. By default the Source Type box defaults to Gold Copy, but you can create new vendor data by selecting Vendor, and then selecting the corresponding Source.
- Click OK.
You see the Add Schedule panel with specific fields corresponding to the type of schedule you selected. - In the Effective Date box, specify the effective date of the transaction.
- In the Schedule Amount box, specify the amount for the schedule.
For a custom sink schedule, the Schedule Amount values must add up to 1.0, or 100%. However, if you set the Bypass Sink Check option to Yes, the system does not require the Schedule Amount values or payments for the custom sink schedule to add up to 1.0, or 100%. - In the Bypass Sink Check box, indicate whether the system bypasses the sink check, and ignores the restriction that requires the custom sink schedule entries to have Schedule Amount values for payments that total to a value of 1.0, or 100%. Options include:
- Yes. The system bypasses the sink check. The system does not require the custom sink schedule entries to total to a value of 1.0, or 100%.
- Null. Default. The system does not bypass the sink check. The system requires the custom sink schedule entries to total to a value of 1.0, or 100%. - If you want to add one or more entries to the schedule, click Add Row, and complete the information for each additional row.
- Click Save.
The system saves the schedule to the database.
When you add a custom sink schedule, the system creates a custom sinking fund schedule in the Schedule table,The schedule has a Schedule Type of CSTMSINK. The system also creates a corresponding custom sinking fund schedule in the Corporate Action table. The sink schedule has a Transaction Type of PMT, a Reason of Custom Sink, and. Corporate Action Notes of CUSTOM_SINK.
Edit a Custom Sink Schedule
In the Schedule tab of the Securities workspace, you can edit a custom sink schedule for a sinking fund security. For more information about editing schedules in Reference Data Center, see Manage Schedules.
If you change a custom sink schedule entry because a schedule amount changes, you can click the Override Value button to change a payment amount or other value. When you add or change the schedule, you can set the Bypass Sink Check option to Yes to indicate that the Schedule Amount Values do not need to add up to 1.00. Otherwise, if you leave this value null, the panel does not save the edited schedule unless the schedule amounts total to 1.00, or 100%.
To edit a custom sink schedule:
- In Reference Data Center's Reference Desk workspace, click Securities in the left navigation.
You see the Securities workspace with all the available securities. - Select a security, edit the security details and then click the Schedule tab.
- Under Schedules, click the row for the schedule that you want to edit.
Select a row with a Schedule Sub Type of Custom Sink. - Under Schedule Details, click the row you want to edit, and then click Override Value.
You see the Override fields display. - The Edit Type drop-down field defaults to Override.
- You can select a Reason code from the drop-down list and add an Attachment or any Comments.
- Update the fields as needed, and then click Apply and Close and then click Save.
The revised record is saved to the database.
When you edit a custom sink schedule, the system updates the custom sinking fund schedule in the Schedule table, If you change a schedule amount, the system also updates the corresponding custom sinking fund schedule in the Corporate Action table.
WRITERS NOTE: start with this section; test in working environment. see button behavior. verify everything and refer back to the Understand Sink Schedules section for details on when you change values
Understand Custom Sink Corporate Action Announcements
WRITERS NOTE: verify if you can create announcement created manual in panel or they'd need a new panel? Verify if you can see the BYpass value onscreen.
After you use the Add Schedule panel or procedure to define a custom sink schedule in the Schedule table, Eagle Accounting automatically creates a corresponding custom sink schedule in the Corporate Action table The corporate action record has a a transaction type of PMT,, a Corporate Action Type (tag 1728) value of Custom Sink, and a Corporate Action Notes (tag 1740) value of CUSTOM_SINK. The Corporate Action table also stores the value set for the schedule's Bypass Sink Check option.
When the system populates the Corporate Action table with the Custom Sink payment schedule, it bases the schedule 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. If you did not select the Bypass Sink Check option for the custom sink schedule, the entire custom sinking fund schedule must add up to 1 (100%). However, if you selected the Bypass Sink Check option for the custom sink schedule, Eagle Accounting lifts the restriction that the payments must add up to 1.
The Create Sink Schedule panel allows you to manually add a sink schedule corporate action announcement associated with a sink schedule. You cannot use the corporate action announcement panels to manually add a custom sink schedule corporate action announcement associated with a custom sink schedule. Instead, when you add the custom sink schedule, the system automatically creates a corporate action record for the announcement in the Corporate Action table. You can modify the corporate action announcement as needed. When you need to update the payment amounts for the custom sink schedule, you can override the Schedule Amount values for the schedule. The system then automatically updates the corresponding values in the Corporate Action table .
Process Custom Sink Payments
In the Global Process workspace's Sink Schedule Processing panel, you can process sinking fund payments globally. Global processing only uses sinking fund values in the Corporate Action table that have a corporate action status of Released.
The Sink Schedule Processing panel allows you to process sinking fund payments associated with custom sink schedules as well as with sink schedules. For more information about using this panel, see Process Sinking Fund Payments.
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