Money Market Loan at Average Rate

PURPOSE

To show illustration of money market loan at average rates.

OVERVIEW

i. Loan revalued to period end closing rate.

ii.  Expense are reported at average booking rate over the life of the loan.

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

TRANSACTION DETAILS

Accounting Base Ccy
Trade ID
Trade Date
Value Date
Maturity Date
Currency
Amount
Rate
Accrual Method
Total Interest
Maturity Amount
USD
MMK1001
3-Feb-03
3-Feb-03
3-Apr-03
SGD
1,000,000.00
5.1232%
Act/365
8,281.34
1,008,281.34

SUMMARY OF JOURNALS

IDDateDescription
J13-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
MMK10013-Feb-03BCash at BankSGD1,000,000.000.567456USD567,456.38J1a
MMK10013-Feb-03BMMK-LoanSGD-1,000,000.000.567456USD-567,456.38J1b

Note J1a :          The booking rate on 3-Feb 2003 is 1.76225 (multiplier 0.567456).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 ExpenseSGD3,649.400.571584USD2,085.94J2a
MMK100128-Feb-03BMMK- Loan Interest PayablesSGD-3,649.400.568919USD-2,076.21J2b
MMK100128-Feb-03PFX - Unrealised Gains - RevenueSGD0.00USD-9.73J2c
MMK100128-Feb-03BMMK - LoanSGD0.00USD-1,462.45J2d
MMK100128-Feb-03PFX - Unrealised Losses - CapitalSGD0.00USD1,462.45J2e

Note J2a :          The average multiplier rate between 3-Feb and 28-Feb is 0.571584. 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 date3-Feb-03
Month End Date28-Feb-03
Days (include 28-Feb)26=A
Start date3-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)59=B
Total Interest8,281.34=C
Period Interest3,649.40=C*A/B

Note J2c :          The unrealised foreign exchange gain on interest expense is analyzed as follows:

SGDRate+
USD
At Closing Rate3,649.400.568919
2,076.21
At Average Rate3,649.400.571584
2,085.94
Gain in exchange
9.73

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

Note J2e :          The unrealised loss on the revaluation of the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate1,000,000.000.568919
568,918.83
At Start Date1,000,000.000.567456
567,456.38
Loss in exchange
-1,462.45

+ 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-3,649.400.571584USD-2,085.94J3a
MMK10011-Mar-03BMMK - Loan Interest PayablesSGD3,649.400.568919USD2,076.21J3b
MMK10011-Mar-03PFX - Unrealised Gain-RevenueSGD0.00USD9.73J3c
MMK10011-Mar-03BMMK - LoanSGD0.00USD1,462.45J3d
MMK10011-Mar-03PFX - Unrealised Losses-CapitalSGD0.00USD-1,462.45J3e

J4                       Money Market Month End Accruals.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100131-Mar-03PMMK - Loan Interest ExpenseSGD8,000.620.571775USD4,574.56J4a
MMK100131-Mar-03BMMK - Loan Interest PayablesSGD-8,000.620.577434USD-4,619.83J4b
MMK100131-Mar-03PFX - Unrealised Losses-RevenueSGD0.00USD45.27J4c
MMK100131-Mar-03BMMK - LoanSGD0.00USD-9,977.50J4d
MMK100131-Mar-03PFX - Unrealised Losses-CapitalSGD0.00USD9,977.50J4e

Note J4a :          The average multiplier rate between 3-Feb and 31-Mar is 0.571775. 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 date3-Feb-03
Month End Date31-Mar-03
Days (include 31-Mar)57=A
Start date3-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)59=B
Total Interest8,281.34=C
Period Interest8,000.62=C*A/B

Note J4c :          The unrealised foreign exchange loss on interest expense is analyzed as follows:

SGDRate+
USD
At Closing Rate8,000.620.577434
4,619.83
At Average Rate8,000.620.571775
4,574.56
Loss in exchange
-45.27

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

Note J4e :          The unrealised loss on the revaluation of the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate1,000,000.000.577434
577,433.88
At Start Date1,000,000.000.567456
567,456.38
Loss in exchange
-9,977.50

+ 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-8,000.620.571775USD-4,574.56J5a
MMK10011-Apr-03BMMK - Loan Interest PayablesSGD8,000.620.577434USD4,619.83J5b
MMK10011-Apr-03PFX - Unrealised Losses-RevenueSGD0.00USD-45.27J5c
MMK10011-Apr-03BMMK - LoanSGD0.00USD9,977.50J5d
MMK10011-Apr-03PFX - Unrealised Losses - CapitalSGD0.00USD-9,977.50J5e

J6                      Money Market Loan Maturity. 

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10013-Apr-03PMMK - Loan Interest ExpenseSGD8,281.340.571524USD4,732.99J6a
MMK10013-Apr-03BMMK - LoanSGD1,000,000.000.567456USD567,456.38J6b
MMK10013-Apr-03BCash at BankSGD-1,008,281.340.581416USD-586,230.53J6c
MMK10013-Apr-03PFX - Realised Losses - RevenueSGD0.00USD81.91J6d
MMK10013-Apr-03PFX - Realised Losses - CapitalSGD0.00USD13,959.25J6e

Note J6a :          The average multiplier rate between 3-Feb to 2-Apr is 0.571524. See Exchange Rates below. Note that the last day of the loan is not included. The rate is rounded to 6dp for display. Full precision is used in calculation.

Note J6d :          The realised foreign exchange loss on interest expense is analyzed as follows:

SGDRate+
USD
At Closing Rate8,281.340.581416
4,814.90
At Average Rate8,281.340.571524
4,732.99
Loss in exchange
-81.91

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

Note J6e :          The realised loss on the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate1,000,000.000.581416
581,415.63
At Start Date1,000,000.000.567456
567,456.38
Loss in exchange
-13,959.25

+ 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.

Average rates are computed by using the multiplier rate from trade/transaction currency to the base currency each day and averaging this over the relevant period.

The following rates were used for this illustration.

Spot Rate

DateUSD/SGDSGD/USD*
3-Feb-031.7622500.567456
28-Feb-031.7577200.568919
31-Mar-031.7318000.577434
3-Apr-031.7199400.581416

Average

From DateTo DateSGD/USD*
3-Feb-0328-Feb-030.571584
3-Feb-0331-Mar-030.571775
3-Feb-032-Apr-030.571524

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

FREQUENTLY ASKED QUESTIONS

RELATED INFORMATION

CHANGE HISTORY

DateByChanges
08-Apr-2004CSCreation.
09-Jun-2016RJReformatted.
23-Apr-2020LTRe-formatting.
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