About Calculating URGL for a PIK Receivable Balance

Owned by Nancy Cohn (Deactivated)
Last updated: Feb 19, 2024 by Kinga Huszno
1 min read

You can process unrealized gain/loss (URGL) for PIK Bond Interest Receivable that will be paid in shares. This calculation requires the following setup at the entity/accounting basis and at the security level for the PIK Bond:

  • PIK URGL Flag. You can mark to market PIK Interest Receivable when you set the entity's PIK URGL Flag (tag 3859) option to Yes and the PIK bond is scheduled to pay in shares. For setup information, see About Entity Setup for PIK Bonds.

  • PIK Receivable Mark to Market Schedule. You can add a PIK receivable mark to market schedule (PIKMTM) for a PIK bond security. If the entity's PIK URGL Flag is set to Yes, the system uses that schedule to post URGL on the PIK Bond’s accrued interest receivable balance for a given coupon period. For setup information, see About Security Reference Data for PIK Bonds.

The system can mark to market PIK Interest Receivable when the entity's PIK URGL Flag (tag 3859) is set to Yes and the PIK bond is scheduled to pay in shares.

Unrealized amount = Accrued interest receivable balance at par x ((100 par - current day market price) / 100 par)

Entries are posted to these accounts:

NET UNREALIZED DEPRECIATION OF PIK INTEREST RECEIVABLE

ACCUMULATED NET UNREALIZED DEPRECIATION OF PIK INTEREST RECEIVABLE