Money Market Loan at Spot Rate – Alt

PURPOSE

To show illustration of money market loan at spot rate where there are two rates on month end date. This is identical to Money Market Loan at Spot Rate except for the use of Alternate Rate for month end revaluation of capital if this is provided.

OVERVIEW

i. Loan revalued at month end using alternate rate.

ii.  Expense are reported at spot rate. No revaluation on interest.

iii. Gain and loss arising from foreign exchange movement are analyzed into capital component.a

TRANSACTION DETAILS

Accounting Base Ccy
Trade ID
Trade Date
Value Date
Maturity Date
Currency
Amount
Rate
Accrual Method
Total Interest
Maturity Amount
USD
MMK1001
28-Feb-03
28-Feb-03
3-Apr-03
SGD
1,000,000.00
5.1232%
Act/365
4,772.30
1,004,772.30

SUMMARY OF JOURNALS

IDDateDescription
J128-Feb-03Money Market Loan Start.
J228-Feb-03Money Market Month End Accruals.
J31-Mar-03Reversal Money Market Month End Accruals.
J431-Mar-03Money Market Month End Accruals.
J51-Apr-03Reversal Money Market Month End Accruals.
J63-Apr-03Money Market Loan Maturity.

J1                    Money Market Loan Start.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100128-Feb-03BCash at BankSGD1,000,000.000.568919USD568,918.83J1a
MMK100128-Feb-03BMMK-LoanSGD-1,000,000.000.568919USD-568,918.83J1b

Note J1a :          The booking rate on 28-Feb 2003 is 1.75772 (multiplier 0.568919).The rate is rounded to 6dp for display. Full precision is used in calculation.

J2                     Money Market Month End Accruals.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100128-Feb-03PMMK- Loan Interest ExpenseSGD140.360.568919USD79.85J2a
MMK100128-Feb-03BMMK- Loan Interest PayablesSGD-140.360.568919USD-79.85J2b
MMK100128-Feb-03BMMK - LoanSGD0.00USD3,227.98J2c
MMK100128-Feb-03PFX - Unrealised Gains - CapitalSGD0.00USD-3,227.98J2d

Note J2a :          The spot rate on 28-Feb is 0.568919. See Exchange Rates below. The rate is rounded to 6dp for display. Full precision is used in calculation.

Note J2b :          Calculation of Accrual in SGD

Start date28-Feb-03
Month End Date28-Feb-03
Days (include 28-Feb)1=A
Start date28-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)34=B
Total Interest4,772.30=C
Period Interest140.36=C*A/B

Note J2d :          The unrealised gain on the revaluation of the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate*1,000,000.000.565691
565,690.85
At Start Date1,000,000.000.568919
568,918.83
Gain in exchange
3,227.98

* In order for system to revalue the loan using Alternate Rate on the month end date, both SGD and USD month end rates must be maintained on the month end date. See Exchange Rates below. If no Alternate Rate available for both currencies on the month end date, system will revalue the loan using the accounting rate maintained for the month end date or last available rate.

+ Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.

J3                       Reversal Money Market Month End Accruals.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10011-Mar-03PMMK - Loan Interest ExpenseSGD-140.360.568919USD-79.85J3a
MMK10011-Mar-03BMMK - Loan Interest PayablesSGD140.360.568919USD79.85J3b
MMK10011-Mar-03BMMK - LoanSGD0.00USD-3,227.98J3c
MMK10011-Mar-03PFX - Unrealised Gains-CapitalSGD0.00USD3,227.98J3d

J4                       Money Market Month End Accruals.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100131-Mar-03PMMK - Loan Interest ExpenseSGD4,491.580.577434USD2,593.59J4a
MMK100131-Mar-03BMMK - Loan Interest PayablesSGD-4,491.580.577434USD-2,593.59J4b
MMK100131-Mar-03BMMK - LoanSGD0.00USD-4,837.56J4c
MMK100131-Mar-03PFX - Unrealised Losses-CapitalSGD0.00USD4,837.56J4d

Note J4a :          The spot rate on 31-Mar is 0.577434. See Exchange Rates below. The rate is rounded to 6dp for display. Full precision is used in calculation.

Note J4b :          Calculation of Accrual in SGD

Start date28-Feb-03
Month End Date31-Mar-03
Days (include 31-Mar)32=A
Start date28-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)34=B
Total Interest4,772.30=C
Period Interest4,491.58=C*A/B

Note J4d :          The unrealised loss on the revaluation of the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate*1,000,000.000.573756
573,756.38
At Start Date1,000,000.000.568919
568,918.83
Loss in exchange
-4,837.56

* In order for system to revalue the loan using Alternate Rate on the month end date, both SGD and USD month end rates must be maintained on the month end date. See Exchange Rates below. If no Alternate Rate available for both currencies on the month end date, system will revalue the loan using the accounting rate maintained for the month end date or last available rate.

+ Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.

J5                      Reversal Money Market Month End Accruals

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10011-Apr-03PMMK - Loan Interest ExpenseSGD-4,491.580.577434USD-2,593.59J5a
MMK10011-Apr-03BMMK - Loan Interest PayablesSGD4,491.580.577434USD2,593.59J5b
MMK10011-Apr-03BMMK - LoanSGD0.00USD4,837.56J5c
MMK10011-Apr-03PFX - Unrealised Losses - CapitalSGD0.00USD-4,837.56J5d

J6                      Money Market Loan Maturity. 

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10013-Apr-03PMMK - Loan Interest ExpenseSGD4,772.300.581416USD2,774.69J6a
MMK10013-Apr-03BMMK - LoanSGD1,000,000.000.568919USD568,918.83J6b
MMK10013-Apr-03BCash at BankSGD-1,004,772.300.581416USD-584,190.32J6c
MMK10013-Apr-03PFX - Realised Losses - CapitalSGD0.00USD12,496.80J6d

Note J6a :          The spot rate on 3-Apr is 0.581416. See Exchange Rates below. The rate is rounded to 6dp for display. Full precision is used in calculation.

Note J6d :          The realised loss on the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate1,000,000.000.581416
581,415.63
At Start Date1,000,000.000.568919
568,918.83
Loss in exchange
-12,496.80

+ Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.

EXCHANGE RATES

Our illustration assumes the company uses different daily exchange rates for accounting.

The following rates were used for this illustration.

Spot Rate

                             Accounting Rate

DateUSD/SGDSGD/USD*
28-Feb-031.7577200.568919
31-Mar-031.7318000.577434
3-Apr-031.7199400.581416

                            Alternate Rate

DateUSD/SGDSGD/USD*
28-Feb-031.7677500.565691
31-Mar-031.7429000.573756
DateSGD/SGD
28-Feb-031.000000
31-Mar-031.000000

*Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.

FREQUENTLY ASKED QUESTIONS

RELATED INFORMATION

CHANGE HISTORY

DateByChanges
12-May-2020TSCreation.
12-May-2020LTRe-formatting.
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