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
| ID | Date | Description |
|---|---|---|
| J1 | 3-Feb-03 | Money Market Loan Start. |
| J2 | 28-Feb-03 | Money Market Month End Accruals. |
| J3 | 1-Mar-03 | Reversal Money Market Month End Accruals. |
| J4 | 31-Mar-03 | Money Market Month End Accruals. |
| J5 | 1-Apr-03 | Reversal Money Market Month End Accruals. |
| J6 | 3-Apr-03 | Money Market Loan Maturity. |
J1 Money Market Loan Start.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 3-Feb-03 | B | Cash at Bank | SGD | 1,000,000.00 | 0.567456 | USD | 567,456.38 | J1a |
| MMK1001 | 3-Feb-03 | B | MMK-Loan | SGD | -1,000,000.00 | 0.567456 | USD | -567,456.38 | J1b |
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.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 28-Feb-03 | P | MMK- Loan Interest Expense | SGD | 3,649.40 | 0.571584 | USD | 2,085.94 | J2a |
| MMK1001 | 28-Feb-03 | B | MMK- Loan Interest Payables | SGD | -3,649.40 | 0.568919 | USD | -2,076.21 | J2b |
| MMK1001 | 28-Feb-03 | P | FX - Unrealised Gains - Revenue | SGD | 0.00 | USD | -9.73 | J2c | |
| MMK1001 | 28-Feb-03 | B | MMK - Loan | SGD | 0.00 | USD | -1,462.45 | J2d | |
| MMK1001 | 28-Feb-03 | P | FX - Unrealised Losses - Capital | SGD | 0.00 | USD | 1,462.45 | J2e |
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 date | 3-Feb-03 | |
| Month End Date | 28-Feb-03 | |
| Days (include 28-Feb) | 26 | =A |
| Start date | 3-Feb-03 | |
| Maturity Date | 3-Apr-03 | |
| Days (exclude 3-Apr) | 59 | =B |
| Total Interest | 8,281.34 | =C |
| Period Interest | 3,649.40 | =C*A/B |
Note J2c : The unrealised foreign exchange gain on interest expense is analyzed as follows:
| SGD | Rate+ | USD |
|
| At Closing Rate | 3,649.40 | 0.568919 | 2,076.21 |
| At Average Rate | 3,649.40 | 0.571584 | 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:
| SGD | Rate+ | USD |
|
| At Closing Rate | 1,000,000.00 | 0.568919 | 568,918.83 |
| At Start Date | 1,000,000.00 | 0.567456 | 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.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 1-Mar-03 | P | MMK - Loan Interest Expense | SGD | -3,649.40 | 0.571584 | USD | -2,085.94 | J3a |
| MMK1001 | 1-Mar-03 | B | MMK - Loan Interest Payables | SGD | 3,649.40 | 0.568919 | USD | 2,076.21 | J3b |
| MMK1001 | 1-Mar-03 | P | FX - Unrealised Gain-Revenue | SGD | 0.00 | USD | 9.73 | J3c | |
| MMK1001 | 1-Mar-03 | B | MMK - Loan | SGD | 0.00 | USD | 1,462.45 | J3d | |
| MMK1001 | 1-Mar-03 | P | FX - Unrealised Losses-Capital | SGD | 0.00 | USD | -1,462.45 | J3e |
J4 Money Market Month End Accruals.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 31-Mar-03 | P | MMK - Loan Interest Expense | SGD | 8,000.62 | 0.571775 | USD | 4,574.56 | J4a |
| MMK1001 | 31-Mar-03 | B | MMK - Loan Interest Payables | SGD | -8,000.62 | 0.577434 | USD | -4,619.83 | J4b |
| MMK1001 | 31-Mar-03 | P | FX - Unrealised Losses-Revenue | SGD | 0.00 | USD | 45.27 | J4c | |
| MMK1001 | 31-Mar-03 | B | MMK - Loan | SGD | 0.00 | USD | -9,977.50 | J4d | |
| MMK1001 | 31-Mar-03 | P | FX - Unrealised Losses-Capital | SGD | 0.00 | USD | 9,977.50 | J4e |
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 date | 3-Feb-03 | |
| Month End Date | 31-Mar-03 | |
| Days (include 31-Mar) | 57 | =A |
| Start date | 3-Feb-03 | |
| Maturity Date | 3-Apr-03 | |
| Days (exclude 3-Apr) | 59 | =B |
| Total Interest | 8,281.34 | =C |
| Period Interest | 8,000.62 | =C*A/B |
Note J4c : The unrealised foreign exchange loss on interest expense is analyzed as follows:
| SGD | Rate+ | USD |
|
| At Closing Rate | 8,000.62 | 0.577434 | 4,619.83 |
| At Average Rate | 8,000.62 | 0.571775 | 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:
| SGD | Rate+ | USD |
|
| At Closing Rate | 1,000,000.00 | 0.577434 | 577,433.88 |
| At Start Date | 1,000,000.00 | 0.567456 | 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
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 1-Apr-03 | P | MMK - Loan Interest Expense | SGD | -8,000.62 | 0.571775 | USD | -4,574.56 | J5a |
| MMK1001 | 1-Apr-03 | B | MMK - Loan Interest Payables | SGD | 8,000.62 | 0.577434 | USD | 4,619.83 | J5b |
| MMK1001 | 1-Apr-03 | P | FX - Unrealised Losses-Revenue | SGD | 0.00 | USD | -45.27 | J5c | |
| MMK1001 | 1-Apr-03 | B | MMK - Loan | SGD | 0.00 | USD | 9,977.50 | J5d | |
| MMK1001 | 1-Apr-03 | P | FX - Unrealised Losses - Capital | SGD | 0.00 | USD | -9,977.50 | J5e |
J6 Money Market Loan Maturity.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 3-Apr-03 | P | MMK - Loan Interest Expense | SGD | 8,281.34 | 0.571524 | USD | 4,732.99 | J6a |
| MMK1001 | 3-Apr-03 | B | MMK - Loan | SGD | 1,000,000.00 | 0.567456 | USD | 567,456.38 | J6b |
| MMK1001 | 3-Apr-03 | B | Cash at Bank | SGD | -1,008,281.34 | 0.581416 | USD | -586,230.53 | J6c |
| MMK1001 | 3-Apr-03 | P | FX - Realised Losses - Revenue | SGD | 0.00 | USD | 81.91 | J6d | |
| MMK1001 | 3-Apr-03 | P | FX - Realised Losses - Capital | SGD | 0.00 | USD | 13,959.25 | J6e |
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:
| SGD | Rate+ | USD |
|
| At Closing Rate | 8,281.34 | 0.581416 | 4,814.90 |
| At Average Rate | 8,281.34 | 0.571524 | 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:
| SGD | Rate+ | USD |
|
| At Closing Rate | 1,000,000.00 | 0.581416 | 581,415.63 |
| At Start Date | 1,000,000.00 | 0.567456 | 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
| Date | USD/SGD | SGD/USD* |
|---|---|---|
| 3-Feb-03 | 1.762250 | 0.567456 |
| 28-Feb-03 | 1.757720 | 0.568919 |
| 31-Mar-03 | 1.731800 | 0.577434 |
| 3-Apr-03 | 1.719940 | 0.581416 |
Average
| From Date | To Date | SGD/USD* |
|---|---|---|
| 3-Feb-03 | 28-Feb-03 | 0.571584 |
| 3-Feb-03 | 31-Mar-03 | 0.571775 |
| 3-Feb-03 | 2-Apr-03 | 0.571524 |
*Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.
FREQUENTLY ASKED QUESTIONS
RELATED INFORMATION
CHANGE HISTORY
| Date | By | Changes |
|---|---|---|
| 08-Apr-2004 | CS | Creation. |
| 09-Jun-2016 | RJ | Reformatted. |
| 23-Apr-2020 | LT | Re-formatting. |
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