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.

Field Name

Value

Field Name

Value

Issue Name

FI Issue Tax Type Change

Description

FI Issue Tax Type Demo

Ticker

FIITTD

Primary Asset ID

555555555

Processing Security Type

DBIBFD

Issue Date

20091015

Dated Date

20091015

First Coupon Date

20100415

Last Coupon Date

20180415

Maturity Date

20181015

Coupon Type Code

Variable

Coupon Rate

5.00

Day Count Basis

30/360

United States

United States

Payment Frequency

Monthly

Issue Tax Type

Standard

Primary Exchange

Boston

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.

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