DM: Estimated Interest Accrual Not Calculated Correctly For Debt Deals (Doc ID 2295386.1)

Last updated on AUGUST 09, 2017

Applies to:

PeopleSoft Enterprise FIN Deal Management - Version 9.2 and later
Information in this document applies to any platform.

Symptoms

 
ISSUE:
 
 Estimated Interest Accrual not calculated correctly for Debt Deals

 

STEPS:
 
1. Create a new INSTRUMENT TYPE of Debt
  Day count basis - 30/360
  Discount/Premium- Straightline Method
  Interest Frequency - Semi-Annual
  Business Day Convention - Following
  Interest Calculation - Interest Bearing

2. Create a Deal with the above Instrument Type
  Enter Transaction Date as -5/16/2017
  Enter Settlement Date as -5/16/2017
  Enter Maturity Date as -04/01/2026
  Change Coupon Start Date to 4/1/2017
  Enter Rate as -3.50
  Enter PAR Amount -$220,000,000
  Enter Settlement Amount -$225,820,100.00 & Price % of PAR 102.2080
  Purchased Interest of -962,500.00 automatically populated.
  Enter Counterparty-USBNK
  Click SAVE.

3. Clicked Cash Flows. Amount is correct.

4. Navigate to Estimated Interest Accruals.
  Accrued interest by day is not correct. See calculation below:

  PAR Amount of $220,000,000 multiplied by Rate of 3.5% multiplied by 1 day divided by Day Count Basis of 360 = $21,388.89

Cause

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