LAC amortization - Number of days for first period is incorrect

[former_member195434]

Hi,

I am creating a zero coupon bond with LAC amortization (1000) assigned to PMP. Below are the details:

Payment Amount: 988,660

Nominal Amount: 1,000,000

Total positive Amortization: 11,340

Issue date: 15.08.2019

End date: 14.08.2020

Interest calculation method in bond class: Act/365.

Calculation/Position/Payment date: 26.11.2019. ('Inclusive' is ticked)

As per the above, LAC amortization as on 30.11.2019 should be 11,340 * (5/262) = 216.41 - (5 days in November 26th to 30th and 26.11.2019 to 14.08.2020 is 262 days)

However, system is calculating 11,340 * (4/262) = 173.13.

So instead of taking 5 days, it is taking 4 days for November amortization.

Can you someone explain what is going wrong here? Any help would be appreciated

Regards

Abhinav

[former_member195434]

gustavo.vazquez Can you or anyone else help me out here.

[Gustavo_Vazquez]

Hi,

Sorry, I'm out of town for the moment :-s(. Open an OSS message.

Check if "Month-End End Date:" in Amortization procedure LAC solves it. This is described in note 933716 and was thought for February but could help you adding that extra day.

Kind Regards

[former_member195434]

Below two notes helped resolve the issue

1478980 - LAC: Exclude end-of-term from amortization period’ in conjunction with note 443763 (already implemented)