Change Accrual [U0215]

The Change Accrual update [U0215] is used for interest bearing loans (IBLs) to change accrual method, base rate and/or loan rate at a midpoint of the term. For example, the accrual method could be changed from a fixed to a floating method or vice versa. Permitted accrual method changes are:

where x is 0, 5, 6, or E. If the method is changed from fixed to floating, the user must enter the new method, base rate, and add-on percentage. If the method is changed from floating to fixed, the user must enter the new method and a fixed rate. The base rate information is cleared.

After any accrual-related change, interest from the effective date to the current accrued to date is recalculated and adjustments are made, as necessary.

The base rate on which the IBL floats may also be changed through this update. Interest rate (fixed loans) or add-on rate (floating loans) may also be changed.

The effective date of any accrual change is assigned by LeasePak to be the most recent payment effective due date. For example, if the current date is 10/15/95 and payments are due monthly on the first, the effective date of any accrual change will be 10/01/95. The earliest that accrual may be changed for 10/01/95 is on 10/01/95.

Change accrual process cannot be applied to IBLs in non-accrual status.

For subsequent functions after a Change Accrual has taken place, the latest information will be assumed to be original information. In the above example, if an accrual reversal is performed to a date prior to 10/01/95, the changed information will be used in the accrual reversal calculations. To avoid that, accruals may be reversed to 10/01/95, the accrual information changed back to the loan’s original values, and then accruals reversed to the desired date.

Change Accrual

This screen is used to indicate the lease whose accrual method is to be changed. The lease must be an interest bearing loan.

This screen is used to change the accrual method and related information. The current accrual method (code and expanded name), base rate (code, expanded name, value), rate, and effective date of any change are displayed.

• EFFECTIVE DATE
  The most recent payment due date is displayed in a MM/DD/YY or DD/MM/ YY format, depending on the Date Format Preference field in Security [U0706] and may not be changed.
  
  
• ACCRUAL METHOD
  The loan’s accrual method codes displayed and may be changed. The changed code must match the advance/arrears setting of the current accrual method. That is, if the current method is advance, the new method must also be advance. The new accrual method must also match the type of the current accrual method. For example, if the current type is P+I, the new type must also be P+I. Therefore, changes that may be made are fixed to floating or floating to fixed, and the days in year assumption. Use Help for a list of valid accrual methods.
  
  
• BASE RATE CODE
  The financial institution code and name are displayed. This field may be changed if the ACCRUAL METHOD is a floating method (IF or AF). Use Help for a list of valid base rate codes.
  
  
• FIXED/ADD-ON RATE
  If the accrual method is a fixed rate, the RATE entered is the fixed rate. If the accrual method is a floating rate, the RATE entered is an add-on rate (i.e., this RATE plus the base rate is the interest rate). A negative rate may be entered for floating rate loans.

Change Accrual Audit

The Change Accrual Audit report [U0215A] reports at the lease level and provides the following information for each IBL whose accrual method was changed.

• LEASE
  
  
• EFFECTIVE DATE - OLD
  The most recent payment due date is displayed a MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706].
  
  
• ACCRUAL METHOD - OLD
  The original accrual method code and its description are displayed.
  
  
• BASE RATE CODE - OLD
  The original financial institution code and name are displayed.
  
  
• FIXED/ADD-ON RATE - OLD
  The original fixed/add-on rate is displayed.
  
  
• EFFECTIVE DATE - NEW
  The most recent payment due date is displayed in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706].
  
  
• ACCRUAL METHOD - NEW
  The new accrual method code and its description are displayed.
  
  
• BASE RATE CODE - NEW
  The new financial institution code and name are displayed.
  
  
• FIXED/ADD-ON RATE - NEW
  The new fixed/add-on rate is displayed.

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