Term Loan Fee Amortisation

PURPOSE

To show illustration of term loan fee amortisation.

OVERVIEW

i. Accounting for amortisation for debt issuance cost to generate a constant effective cost of funding.

TRANSACTION DETAILS

Accounting Base Ccy
Trade ID
Pay/Rec
Category
Trade Date
Value Date
Currency
Amount
Accrual Method
USD
MAP1001
Payables
Fees
03-Feb-03
03-Feb-03
SGD
45,000.00
Act/365

TL Repayment Schedule

From DateTo DateOpening Loan BalancePrincipalInterest RateInterest RepaymentFeeNet Cash Flow
03-Feb-0303-Feb-03
0.00
1,000,000.00
3.000000%
0.00-45,000.00
955,000.00
03-Feb-0303-Aug-03
1,000,000.00
0.00
3.000000%
-15,083.330.00
-15,083.33
03-Aug-0303-Feb-04
1,000,000.00
0.00
3.000000%
-15,333.330.00
-15,333.33
03-Feb-0403-Aug-04
1,000,000.00
0.00
3.000000%
-15,166.670.00
-15,166.67
03-Aug-0403-Feb-05
1,000,000.00
0.00
3.000000%
-15,333.330.00
-15,333.33
03-Feb-0503-Aug-05
1,000,000.00
0.00
3.000000%
-15,083.330.00
-15,083.33
03-Aug-0503-Feb-06
1,000,000.00
-1,000,000.00
3.000000%
-15,333.330.00
-1,015,333.33

Fee Amortisation Schedule

From DateTo DateLoan BalanceFee BalanceNetInterestAmortisationTotalYield
03-Feb-0303-Aug-03
1,000,000.00
45,000.00
955,000.00
15,083.337,009.49
22,092.82
4.6651121%
03-Aug-0303-Feb-04
1,000,000.00
37,990.51
962,009.49
15,333.337,290.51
22,623.84
4.6651121%
03-Feb-0403-Aug-04
1,000,000.00
30,700.00
969,300.00
15,166.677,380.85
22,547.52
4.6651121%
03-Aug-0403-Feb-05
1,000,000.00
23,319.14
976,680.86
15,333.337,635.54
22,968.87
4.6651121%
03-Feb-0503-Aug-05
1,000,000.00
15,683.60
984,316.40
15,083.337,687.69
22,771.02
4.6651121%
03-Aug-0503-Feb-06
1,000,000.00
7,995.91
992,004.09
15,333.337,995.91
23,329.24
4.6651121%
03-Feb-0603-Feb-06
0.00
0.00
0.00
0.000.00
0.00
4.6651121%

SUMMARY OF JOURNALS

IDDateDescription
J13-Feb-03Settlement of Fee
J228-Feb-03Month End Fee Amortisation
J31-Mar-03Reversal Month End Fee Amortisation
J431-Mar-03Month End Fee Amortisation
J51-Apr-03Reversal Month End Fee Amortisation

J1                  Settlement of Fee

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
MAP10013-Feb-03PMAP: Pay Fees/ChargesSGD45,000.000.567456USD25,535.54J1a
MAP10013-Feb-03BCash At BankSGD-45,000.000.567456USD-25,535.54J1b

Note J1a:       The multiplier rate on 3-Feb-2003 is 0.567456. See Exchange Rates below.

J2                  Month End Fee Amortisation

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
MAP100128-Feb-03BMIS: Fee PrepaidSGD44,041.190.568919USD25,055.86J2a
MAP100128-Feb-03PMIS: Fee ExpenseSGD-44,041.190.567456USD-24,991.45J2b
MAP100128-Feb-03PFX - Monetary Asset - GainSGD0.000.000000USD-64.41J2c

Note J2a:       The multiplier rate on 28-Feb-2003 is 0.568919. See Exchange Rates below.

                             Calculation of Unamortised Fee

                              Unamortised fee is interpolated using cubic spline. No computation is available.
                              The following calculation is using linear intra interest payment date as approximation for illustration.

Fee Amount45,000.00A
Unamortised Amount (Feb)44,041.19B
Period Charge (Feb)958.81C = A - B

Note J2c:       The unrealised gain/loss on the revaluation of the fee is analysed as follows:

SGDRate+
USD
At Closing Rate44,041.190.568919
25,055.86
At Start Date44,041.190.567456
24,991.45
Gain in exchange
64.41

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

J3                  Reversal Month End Fee Amortisation

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
MAP10011-Mar-03BMIS: Fee PrepaidSGD-44,041.190.568919USD-25,055.86J3a
MAP10011-Mar-03PMIS: Fee ExpenseSGD44,041.190.567456USD24,991.45J3b
MAP10011-Mar-03PFX - Monetary Asset - GainSGD0.000.000000USD64.41J3c

J4                  Month End Fee Amortisation

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
MAP100131-Mar-03BMIS: Fee PrepaidSGD42,848.140.577434USD24,741.97J4a
MAP100131-Mar-03PMIS: Fee ExpenseSGD-42,848.140.567456USD-24,314.45J4b
MAP100131-Mar-03PFX - Monetary Asset - GainSGD0.000.000000USD-427.52J4c

Note J4a:       The multiplier rate on 31-Mar-2003 is 0.577434. See Exchange Rates below.

                             Calculation of Unamortised Fee

                              Unamortised fee is interpolated using cubic spline. No computation is available.
                              The following calculation is using linear intra interest payment date as approximation for illustration.

Unamortised Amount (Feb)44,041.19A
Unamortised Amount (Mar)42,848.14B
Period Charge (Mar)1,193.05C = A - B

Note J4c:       The unrealised gain/loss on the revaluation of the fee is analysed as follows:

SGDRate+
USD
At Closing Rate42,848.140.577434
24,741.97
At Start Date42,848.140.567456
24,314.45
Gain in exchange
427.52

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

J5                  Reversal Month End Fee Amortisation

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
MAP10011-Apr-03BMIS: Fee PrepaidSGD-42,848.140.577434USD-24,741.97J5a
MAP10011-Apr-03PMIS: Fee ExpenseSGD42,848.140.567456USD24,314.45J5b
MAP10011-Apr-03PFX - Monetary Asset - GainSGD0.000.000000USD427.52J5c

EXCHANGE RATES

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

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

FREQUENTLY ASKED QUESTIONS

RELATED INFORMATION

CHANGE HISTORY

DateByChanges
1-Nov-2016CSCreation.
15-Nov-2016TSRewritten. Reformatted.
07-May-2020LTRe-formatting.
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