Accrual Interest (TPM44) with Calculation Date

[former_member279275]

Hi Expert,

We have bond with next nominal interest calculation from 17-Apr to 16-Oct. Bond purchase with Position Value Date 30-Apr, Calculation Date 04-May and Payment Date 04-May. In the purchase transaction, accrued interest (DBT_H001) captured with calculation base from 17-Apr to 04-May.

In month end accrual (TPM44) of 30-Apr, why there are still accrual interest calculated ? As the calculation date is on 4-May (next month), isn't the 30-Apr tpm44 will not have any calculation until 31-May ?

Hope to hear your opinion. Thank you.

[former_member279275]

Hi All,

Thanks for your input. Below screen is my cash flow condition.

Accrual on 30-Apr take 14/180 days (from 17-Apr to 30-Apr)

Seems like calculation date is not take effective in TPM44. In regardless of any date entered as Calculation date, the accrual still behave the same. Do you think it's correct behavior. I can exclude it in tpm44 run but transaction always get posted before we aware it.

Thanks.

[Former Member]

HI Oscar,

Can you also post the screen shot of your Purchase transaction ? From the cash flow, it looks like your Pos Value Date is 17 April/ But mentioned it earlier 30th Aprl. Please provide the screenshot.

Regards,

Nikhil

[former_member279275]

Hi Nikhil,

The earlier screen shot on cash flow is belong to FWZZ - cash flow on the security. The security issue start date is 17-Apr, so this date show as Purchase update type in cash flow. The actual purchase transaction is 30-Apr and Calc & Payment date both 04-May.

[Gustavo_Vazquez]

May be the conditions on the transaction makes you see the Purchase date as 4/17/2015 instead of 5/04/2015 . (Coupons ? ). I'm sending my TS01 and TPM40 and the Posting date in TS01 matches what TPM40 shows.

Regards
.

[Former Member]

Hi Oscar,

The system behaviour is correct. If you notice on your TPM44 screenshot, the no of days used for Update type AD1000 is -14. in your posting log a negative amount would have been posted.

Here is the logic:

Your Purchase has a Position Value Date of 30 April and payment date of 4th May. So the accrued Interest to pay is paid to the seller actually till 4th May. So Period Between 30th April and 4th May, the system will try to post a Negative amount in order to balance the interest paid till 4th May.

If you do the accrual for next period and compare, the net amount accrued will be correct.

Regards,

Nikhil

[former_member279275]

Hi Nikhil,

TPM44 calculation on 30-Apr is not post negative amount. It's posted to normal accrual posting entries and not the opposite amount. As accrual is reset entry, in next period accrual (31-May), system calculate again normal period from 17-Apr to 31-May with 44 days. There are no net amount with different from previous month. Do you think is this correct ?

[Former Member]

Hi Oscar,

THats Correct. When you have the reset method setup, the accrual is calculated based on Cumulative basis. If you want the difference procedure, you can do so by changing the Accrual/Defferal method.

In your case, now overtime you run TPM44, it will be calculated from 17th Apr till the key date. For TPM44 on 30th Apr, its always based on the Position Value date.

In case your Position Value date for the Purchase was also 4th May , then TPM44 would not have given any output.

Regards,

Nikhil

[Former Member]

Hi,

TPM 44 calculates the interest amount accumulated on the key date and its resetted on the next day.

So it wont affect your calculation of 04th may.

If you dont want the accrual to happen on 30th april, the dont execute TPM44 on 30th april for that bond.

You run the TPM44 on 31st may directly.

Regards

[Gustavo_Vazquez]

TPM40 to see Bond Cashflow .

Check in TPM44 how many days does it accrued ?

Kind Regards

[Former Member]

Hi Oscar,

Can you please send the screenshot for FWZZ (Conditions).

Regards,

Manish