Create Amortization & Accretion Rules

Owned by Nancy Cohn (Deactivated)
Last updated: Nov 22, 2023
1 min read

In the Create Amortization & Accretion Rules panel, you can add an amortization/accretion rule. After you create an accounting rule, you can create the amortization/accretion rules that use the accounting rule.

When you create amortization/accretion rules to support International Financial Reporting Standards (IFRS), keep in mind that IFRS requires the use of an effective yield when calculating amortization for fixed income securities. The effective yield functionality for average cost portfolios is accomplished by applying a position-level yield to lot-level data and subsequently aggregating lot-level amortization to obtain position-level amortization. When you set up an average cost portfolio, you can apply effective yield amortization methods of Constant Yield 1 (CY1), Constant Yield 2 (CY2 with smoothing), Level Yield 1 (LY1), and Level Yield 2 (LY2 with smoothing).

To create an amortization & accretion rule:

  1. Do one of the following:
    - In Portfolio Data Center, in the left navigation pane, click Portfolio Desk > Accounting Portfolio Rules > Amortization & Accretion > Create Amortization & Accretion Rules. 
    - In Accounting Center, in the left navigation pane, click Setup > Portfolio Rules > Amortization & Accretion > Create Amortization & Accretion Rules.
    You see the Create Amortization & Accretion Rules panel.

  2. Complete the options on the Create Amortization & Accretion Rules panel.

  3. Click Submit.