Example - Edit an Amortization Rule

The Amortization Rule, NKCTEST, has an amortization rule established for processing security type DBFLTP (inflation linked debt security), such that the Constant Yield 1 amortization method is used.

You want to change that specific amortization rule such that on January 1, 2017 the new rule processes with the Level Yield 2 amortization method. Also, you want the rule to apply prospectively from that date (applying the new amortization based upon the amortization cost rule date minus 1).

The first step in this process is to select the Edit Amortization & Accretion Rules panel.

In this scenario, you select the rule name, NKCTEST, and click Submit.

You see the Show All tab. See the following figure.

The Show All tab displays the entire individual amortization rule, and allows you to select which amortization rule to change if you selected multiple rules. In this scenario, you select the amortization rule set up for processing security type DBFLTP by clicking the corresponding check box in the Select column. Click the Change Selected Amortization/Accretion Rules option.

You see the Action Entry Panel tab.

The Action Entry Panel tab allows you to set the Rule End Date of the amortization rule. After you enter the Rule End Date, submit the record. In this scenario, you enter 12/31/2016.

All other fields are locked, and you cannot make changes. The reason for this is that Eagle Accounting only recalculates a yield based on reference data changes, and/or amortization rule instance changes in combination with certain rule option changes and additional criteria, or on the coupon date of the security. By forcing you to edit or delete an amortization rule if the rule was set up incorrectly, Eagle Accounting always recalculates the yield when changes are made.

Lastly, you open the Create Amortization & Accretion Rules panel, and create a new rule with a Rule Begin Date of 01/01/2017.