EDM: Incorrect Discount Amount Calculation on Deal using Constant Yield Method with Paydown
(Doc ID 2604145.1)
Last updated on MAY 03, 2021
Applies to:PeopleSoft Enterprise FIN Deal Management - Version 9.2 to 9.2 [Release 9]
Information in this document applies to any platform.
A Deal is created with Classification = Debt, Rate Type = Fixed, Price % of Par = Greater than 100, Discount/Premium = Constant Yield Method. If a Paydown is added, on the Estimated Interest Accruals page, towards the end of the life of the Deal, the Discount Amounts become a negative amount when all the prior Discount Amounts are a positive amount. The Discount Amount is over-amortizing, causing the system to calculate a “reversal” of the over-amortized amounts towards the end of the life of the Deal.
1. Create a Deal
a. Classification = Debt
b. Rate Type = Fixed
c. Price % of Par = Greater than 100
d. Discount/Premium = Constant Yield Method
2. Save the Deal
3. Click the Cashflows button
4. Go back to the Deal
5. Click the Interest Dates hyperlink
6. Navigate to Deal Management > Capture Deals > Estimated Interest Accruals
7. Display the Deal
8. Discount Amounts are all positive
9. Re-display the Deal
10. Click the Interest Dates hyperlink
11. Add a Paydown near the end of the life of the Deal
12. Display the Deal on the Estimated Interest Accruals page
13. Near the end of the life of the Deal, Discount Amounts are now negative
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