Set Up Securities for Custom Sink Schedules

Eagle Accounting recognizes a security as a sinking fund bond when you set the security's Sinkable or Sink Flag (tag 1780) option to Yes. When the security master record has the Sinkable field set to Yes, the system expects you to populate a sinking fund schedule, both in the Schedule table and in the Corporate Action table.

However, if you expect actual sinking fund payments to change from expected payments, and plan to use custom sinking fund schedules rather than sinking fund schedules, you must also set the security's Sinkable (tag 1780) option to Yes. The system then allows you to define a custom sinking fund schedule in the Schedule table and the system, in turn, defines a corresponding sinking fund schedule in the Corporate Action table.

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

Option

Tag

Description

Sinkable (formerly Sink Flag)

1780

Determines whether the security is eligible for sinking fund payments. Options include:

Yes. The security is eligible for sinking fund payments. You need to add sink information for the security so that the system can calculate the yield for the security during the earnings process. You must set this field to Yes to add a sink schedule corporate action or a custom sink corporate action.
No. The security is not eligible for sinking fund payments.

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.