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ANNUI-T Plus 8.0 8 - ANNUI-T, Financial calculator software

1. 23 ANNUI T Plus 8 0 File Function Report Worksheet Tool Help me E 4 Future val Setup Accounts GU entries Description ex Mr X expenses for June 2007 J Brown expense account for March 2012 Reference ex employee s number C Date Description Sales taxes code Number of krn if Ka if allo pS 03 03 2012 Hockey tickets with QC 5 00 R 9 50 A1 50 00 0 00 0 00 03 06 2012 Bauart with QC 5 00 R_9 50 R1 50 00 0 00 0 00 03 10 2012 QC 5 00 A_9 50 R1 50 00 000 000 Figure 12 07 When you enter an amount including sales taxes ANNUI T calculates the sales taxes included and the refundable sales taxes also known as sales taxes credits or ITC or ITR You can modify the amount before sales taxes and the GST amount Then you must indicate in which column you want to register the amount for example office supplies To register the total amount before sales taxes credits in a single column you must position the cursor on the desired cell and press F3 or double click on it When you want to register an amount as an entertainment expense you have to select this column which is a predefined column Then the program automatically calculates 50 of the refundable sales taxes However you can modify the admissible portion of sales taxes that is refundable on entertainment expenses 118 ANNUI T Plus 8 0 Of course you are allowed to use more than one column for a disbursement since it is
2. Adjusted payment Note that a schedule can be produced and consulted only after the Calculate function has been activated since it is only then that the program verifies if all the necessary data has been entered MODIFY DATA When the Calculate function has been activated and the program has validated the data the fields are highlighted in gray indicating that they are no longer accessible Therefore a modification of one or several fields can only be done by selecting the Modify data function For example if the calculated nominal interest rate is 11 999999 it is likely that the real interest rate is 12 Note that the calculated rate could be slightly different from the rate stated in the contract because the payment amount is always rounded This reduces the degree of precision in determining the interest rate In this kind of situation the Modify data function lets you enter the real interest rate Once the change is done you have to activate the Calculate function again in order to validate the new data It is important to note that for an annuity calculation once the schedule has been changed skipped payment modification of interest rate new funds advance etc any change of the data will be denied in the data entry window ANNUI T Plus 8 0 PRINT This function lets you print the data entry window If you wish to print a schedule such as a loan amortization schedule
3. _ Debtor Banque ABCDE Truck1 72 500 00 7 250 PMT 1 444 15 03 18 2016 7 250000 _ Debtor Ford 04 01 2016 9 750000 Truck 3 64 000 00 9 500 PMT 1 344 12 11 15 2015 9 500000 _ Debtor Toyota Total long term debt 213 675 To restore an overwritten field select this field map F8 Figure 11 08 The next six columns provide a summary of events that have occurred during the financial year about each loan balance at the beginning amount of new loan repayments interest paid balance and accrued interest at year end 106 ANNUI T Plus 8 0 23 ANNUI T Plus 8 0 LONG TERM DEBT SUMMARY AS OF 12 31 2012 Debtor Banque XYZ Securities Machinerie et cautionnement des __ Mortgage 100 000 00 7 000 PMT 700 42 Debtor Banque ABCDE Securities Hyoth que de 1er rang fi 1 664 21 6 740 83 Figure 11 09 Repayments of each of the next 5 financial years appear in the 5 following columns In the last column the total amount of repayments over these next 5 financial years is displayed 23 ANNUI T Plus 8 0 File Function LONG TERM DEBT SUMMARY AS OF 12 31 2012 EIEII Mortgage 100 000 00 7 000 PMT 700 42 96 782 22 287 22 1 783 00 Debtor Banque ABCDE Securities Hyoth que de 1er rang al Figure 11 10 2 ANNUI T Plus 8 0 File Function LONG TERM DEBT SUMMARY AS OF 12 31 2012 Mortgage 100 000 00 7 000 PMT 700 42 2 191 00 2 348 00 10 278 00
4. Dear customer Utilimax thanks you and congratulates you on your purchase of the ANNUI T program Of course there is a multitude of programs available for loan amortization and investment annuity tables At first glance you might think that this software is just like the others but you will soon realize that ANNUI T is unique Briefly the major ANNUI T features are a vast choice of calculation methods an exceptional flexibility especially with regard to all the modification options a user friendly approach and the multi report generation capabilities Moreover ANNUI T Plus even includes a cash disbursements journal module ideal to compile expense accounts credit card statements etc We recommend that you take the time to read this manual You are not expected to understand all the financial theories and concepts We do refer to the theory only as a matter of communication clarity We want to emphasize throughout this manual on the power and the options that this software provides and encourage you to explore all of them to get your money s worth SYSTEM REQUIREMENTS IBM PC or compatible Pentium 2 processor or higher Windows 10 8 7 Vista or XP 50 MB of free hard disk space Video display with at least 800 x 600 resolution An internet connexion is also required for the ANNUI T installation and for the upgrades ANNUI T Plus 8 0 INSTALLING THE ANNUI T PROGRAM You must have your ANNUI T serial number
5. WHAT IF This applies for annuities loans leases and investments but also for future values The What if tool is very useful to obtain a quick evaluation of impacts when any given basic information is changed initial amount number of periods interest rate etc First you have to enter the basic information of the initial scenario the one to be compared to except the unknown value In the case of a mortgage loan if you wish you can also enter a duration for the term Next in the column Variation you have to click on the element to vary Unless you choose the payment frequency or the compounding frequency you must indicate the variation Finally to calculate the unknown value and to generate the data you have to select Calculate The following illustrates an example 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Tool Help SLI Sa a Initial data Function Initial amount 100 000 00 Casute Number of periods 300 Term periods ionth Modify ay Data Compounding frequency emi annual Nominal annual interest rate 0 500000 1st pmt date Beginning of period payment Nominal annual interest rate 6 000000 6 500000 7 000000 Payment 9 81 669 821 700 42 731 55 Frequency of payments Payments for total duration 191 940 85 200 948 90 210 122 72 219 469 52 Interest for total duration 91 940 85 100 948 90 110 122 72 119 469 52 Interest diff
6. for total duration 0 00 9 008 05 18 181 87 27 528 67 Payments for term 38 388 60 40 189 20 42 025 20 43 893 00 Interest for term 28 225 07 30 644 98 33 069 50 35 497 82 Payment diff for term 0 00 1 800 60 3 636 60 5 504 40 Interest diff for term 0 00 2 419 91 4 844 43 4 272 75 4 gt L vanem MON O Norma J 3 Figure 9 01 Example of the data entry window for the What if function 88 ANNUI T Plus 8 0 In this example a 100 000 mortgage loan is amortized over 25 years at 6 and is repayable by monthly payments The term is 5 years In this case we want to know the impacts of a 5 rate variation ANNUI T then displays the initial scenario and 10 others one for each rate variation up to 11 in this example The program gives you the results and the differences compared to the initial scenario These results are given for the term and the complete duration of the mortgage loan Note that there is also an icon to display these results with all kinds of graphs The following is an example 3 ANNUI T Plus 8 0 Graph s configuration Print Data input 6 000000 6 500000 7 000000 7 500000 6 000000 6 500000 9 000000 9 500000 M interest BB Principal 10 000000 10 500000 11 000000 Figure 9 02 Graph example Many options are available to generate your graph You simply have to select from the menu Graph s configuration 89 ANNUI T
7. the interest is also calculated according to the real number of days elapsed but capitalized at every period In other words interest is calculated on the preceding balance which includes the accumulated interest The formula used to calculate the interest at a given date is expressed as follows Preceding balance x Interest rate x Number of elapsed days 365 This interest calculation method is sometimes used for loans negotiated between individuals 70 ANNUI T Plus 8 0 PROCEDURE TO CALCULATE A FUTURE VALUE 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Batch cessing Preference Tool Help Quit Nominal annual interest rate Interest calculation frequency Issue date Number of periods Maturity date Other date for interest and balance calculation 12 31 2011 Financial year end 12 31 As of calculation As of date maturity date 12 31 2011 01 15 2014 Accumulated interest Accrued interest Balance future value 11 002 12 Future value compounded interest exact day EE Scenario Example of future value g Baa Figure 5 01 Example of a data entry window for a future value with compounded interest on daily basis As for annuities in the future value data entry window the program allowed you to calculate an unknown value initial amount interest rate number of periods or future value There has to be no more than 1 unknown value If all values are entered ANNUI T th
8. 2011 1 344 12 54 414 57 9 500000 11 15 2011 1 344 12 53 501 23 9 500000 _ 15 52 580 66 _ 9 500000 y DO 1 One WN Figure 4 05 Example of a loan amortization schedule MOVING THROUGH THE SCHEDULE To move through this kind of screen with the mouse you can click on the scroll arrows slide the scroll bar or click over or under the scroll bar You can also use the arrow keys PAGE UP PAGE DOWN HOME and END SCHEDULE This tab lets you return to the schedule when the annual results are displayed 27 ANNUI T Plus 8 0 ANNUAL RESULTS This tab is used to generate the report of annual results For example in the case of a loan this report displays for each related year the total payments the total interests the total principal repayments and the balance These results do not include accrued interest but this can be calculated with another procedure that is explained later When printing the schedule the annual results are also printed Nevertheless the tab Annual results has the advantage to isolate these results in a summary report By default the annual results are calculated and presented on the basis of the financial year end However you can choose any other basis by clicking on Change date Note that when you print a schedule the annual results are always calculated according to the selected date used to generate the annual results report 3 ANNUI T Plu
9. 21 1 500 00 46 500 00 12 000000 01 02 2011 E 1 973 92 1 500 00 45 000 00 12 000000 01 03 2011 1 914 25 1 500 00 43 500 00 12 000000 01 04 2011 E 1 943 34 1 500 00 42 000 00 12 000000 1 914 25 1 500 00 40 500 00 12000 Issue date Funds advance Adjust Close Modify Extend See Delete modifications Sum Print Data y Fixed principal payment loan eee Others BOEN Example of modifications Normal Figure 4 20 Modifications before the conflicts A 51 ANNUI T Plus 8 0 2 ANNUI T Plus 8 0 Activity Function Report Worksheet Tool Help Modifications in conflict E Es MIC t least one modification is in conflict with the one in progress Each modification in conflict will be either deleted or shortened according to the case of conflict in order to give priority to the modification in creation Adjusted interest ho 07 01 2010 08 01 2010 New fixed principal remittance 09 01 2010 10 01 2010 New fixed principal remittance Fixed principal payment loan Directory Scenario Example of modifications Normal Figure 4 21 List of conflicts 3 different cases On next page figure 4 22 shows the amortization schedule after the adjustments and or the deletions of the modifications in conflict 52 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Tool Help INIT AMOUNT PER PMT YR COMP YR NOMINAL REMITTANCE 1 _2000000 1 5
10. 3 191 80 3 206 98 167 803 54 164 813 50 161 809 70 158 792 04 155 760 42 152 714 75 149 654 92 146 580 84 143 492 41 140 389 51 137 272 06 134 139 96 130 993 09 127 831 35 124 654 63 121 462 83 118 255 85 Figure 4 16 Example of the Combine summary report As shown in figure 4 16 the Combine summary report is similar to the normal schedule except that the results are consolidated on the chosen frequency for example on a monthly basis Indeed you can use the Sum function to add up the results and calculate implicit rates within a desired interval You can also obtain the annual results based on the financial year end or on any other desired date 46 ANNUI T Plus 8 0 The second form of the report is the detailed version Combine detailed 3 ANNUI T Plus 8 0 BEA Function Combine detailed report Truck 1 72 500 00 7 250 PMT 1 444 15 _JInterest 381 97 375 55 369 10 1 444 15 1 444 15 1 444 15 1 062 18 1 068 60 1 075 05 0 00 0 00 0 00 62 160 70 61 092 10 60 017 05 Truck 2 60 000 00 9 750 FPR 1 000 00 interest 430 60 421 17 386 27 1 430 60 1 421 17 1 386 27 1 000 00 1 000 00 1 000 00 0 00 0 00 0 00 51 000 00 50 000 00 49 000 00 416 26 408 92 401 51 1 344 12 1 344 12 1 344 12 __ Principal 927 86 935 20 942 61 Adyance 0 00 0 00 0 00 __ Balance 51 652 80 50 717 60 49 774 99 Grand totals b Total interest A 1 2
11. INFORMATION Continue cars De Directory description List of Directories List ofloans IL Selection fa CA Equipment UD Fies y ANNUET_Plus_8 A tek QL M Others Create list Figure 4 15 Reports selection window PROCEDURE FOR REPORTS First you have to indicate the type of scenario loan lease investment or future value and the desired report by clicking on the corresponding tabs Secondly you must indicate the disk drive and the directory containing the scenarios to be used for the report Thirdly you have to select the scenarios If you want to see the description of a scenario click on Details To make the selection keep and hold the CTRL key and click on each of the desired scenarios Remember that if the scenarios are consecutive in the list you can save time proceeding by range You simply have to click on the first scenario to be considered hold down the SHIFT key and click on the last scenario of the group 44 ANNUI T Plus 8 0 If you want to select files from different directories once the selection is done for the first directory you must click on Create list Then for each of the desired directories you have to select the scenarios and click on Add To look at the list of selected scenarios simply click on View list Note that it is always possible to remove scenarios from this list In addition the user may also select all scenarios in a directory by click
12. January 10 through December 10 2011 the borrower had to pay only the interest For the remaining term the monthly payment was 2 000 00 plus interest To create this scenario with ANNUI T you have to register 2 modifications The first one to enter the 12 interest only payments and the second one to modify the amount of the fixed principal remittance for the remaining term Now let us suppose that since March 10 2011 the interest rate is 11 You then have to register this interest rate modification Note that it is better to choose Modification to the end of the scenario when you do not know how long this interest rate change will be effective Anyhow at the next interest rate modification this modification will be shortened by the new one since 2 modifications of the same type can not overlap each other In fact there will be a case 3 conflict 56 ANNUI T Plus 8 0 Figure 4 25 represents the screen displayed when creating the interest rate modification As you can see the program offers to combine the 2 modifications since they are not of the same type interest rate versus payment 2 ANNUI T Plus 8 0 AUDE Fille Activity Function Report Worksheet Tool Help Modifications in conflict List of modifications in conflict One or more fixed principal remittance modification has been found in this interval Each of them is identified by an Xx to indicate hat the modification will be combined with the one in progress If
13. Plus 8 0 Note that since you can compare up to 11 scenarios initial scenario plus 10 variations it happens sometimes that for certain types of graphs the results are not very clear In these circumstances it is preferable to reduce the number of scenarios selected Graph s configuration Selected scenarios Selection for X axis Periods monthly results Periods annual results Scenario 6 000000 ane 6 500000 7 000000 7 500000 8 000000 8 500000 3 000000 3 500000 10 000000 10 500000 11 000000 Selection of variables X Interest X Principal Payment TF Missing value Perspective 2D C 3D Type of graph Stack 7 Bar Pictograph Line C Area Step Combination Pie C XY Scalter x xt xl x xt x Xt xt xt x xt ariations cenario otal value Figure 9 03 Graph s configuration 90 ANNUI T Plus 8 0 10 U S CALCULATION METHODS ANNUI T also offers the possibility to calculate interest using US methods There are 3 different methods Normal US Rule and Rule of 78 Normal This method is known as the actuarial method Interest is compounded which means that any amount of unpaid interest is added to the balance In these circumstances interest is sometimes calculated on interest This method is based on the assumption that every period has the same importance and assumes that a year is composed of equal periods for examp
14. Rule of 78 you are allowed to choose Exact days in the compounding frequency box This is used to compute interest based upon the exact number of days since the last interest calculation date With this option interest is calculated as follows Previous balance x NR x DE DY Where NR nominal interest rate DE Number of days elapsed since last calculation date DY Days in year basis 360 or 364 or 365 93 ANNUI T Plus 8 0 11 WORKSHEETS These worksheets are mainly for public accountants that have to prepare financial statements for which they have to sign a Notice to Reader Report or a Review Engagement Report or an Auditors Report Depending on the mandate they usually must fill out many worksheets in order to support their financial statements Some of these documents can require quite some time to prepare Once again ANNUI T Plus worksheets give accountants a way to save time but also to reduce the risk of errors and omissions Furthermore these tools can also contribute to improve the standardization of the work process With ANNUI T Plus if an accountant has saved his customer s files it will be possible for him to generate very quickly the worksheets related to the long term debt and the classification of leases Some fields contain calculated amounts that can be overwritten This provides more flexibility to the user To restore the calculated amount to an overwritten field simpl
15. SES RAA Disbursements Accounts Date for GL entries mm dd yyyy GL account GL account name abbreviation Debit Credit number GST or HST credit QST credit Per km allowance Entertainment expenses Communications Office supplies Shipping charges Repair and maintenance Other travel expenses Computer equipment Advances director 1 968 13 J Brown expense account for March 2012 1 968 13 Cash disbursements journal Directory Examples mY J Brown expense account 03 2012 SSS Figure 12 09 GL Entries tab of the Cash Disbursements Journal 121 ANNUI T Plus 8 0 When printing a compilation of disbursements instead of printing all lines you can choose to print a zone or even selected lines by clicking on the lines of the column preceding the one for dates using CTLR or SHIFT In this case printed totals are recalculated to reflect the amounts of selected lines You can also choose to print only the column headings and totals In addition there is an option to print or not the columns used to reclassify the amounts of the Miscellaneous column as long as you have selected GL accounts to indicate the nature of the expenses For example if in the Miscellaneous column there are equipment purchases on the printout there will be a column ex Equipment to list all these transactions In_ this module you can even combine consolidate compilations of disbursements To do so you must fir
16. Setup tab you must enter the amount paid per kilometer Then in the grid you must position the cursor on the per km allowance column and press F3 or double click on it A screen is displayed to enter the total kilometers When you leave this window the program calculates the allowance amount and the sales taxes credits As it should be sales taxes credits are calculated in the following way GST credit allowance x GST rate 100 GST rate QST credit allowance x QST rate 100 QST rate The Disbursements grid is very flexible You can add insert or delete lines When you quit this grid the program sorts lines based on the dates Furthermore you are always allowed to modify the taxes code province and sales taxes calculation rules of any disbursement To do so you simply have to position the cursor on the desired line and click on Modify sales taxes button or double click on the sales taxes code in the column that displays this information The sales taxes code structure is like the following Province abbreviation GST rate R if refundable if not N provincial sale tax rate R if refundable if not N 1 if the provincial tax is calculated on the GST if not 0 portion of deductible entertainment expenses For example by default in 2012 for a disbursement in Quebec the code is QC 5 R 9 5 R1 50 Finally there is also a tab to display the GL entries It is even possible to create a file containing th
17. This number is printed on your invoice During the installation the software will try to communicate with the ANNUI T web site to verify the serial number and register your information Be sure that your firewall allows the installation always not just once Installation instructions 1 First you must download the software from the web site www annui t com To do so in the menu select Download the complete version 2 Click on the link that corresponds to the type of license you have purchased single user 2 user network 5 user network etc 3 Once the download is complete click on Run 4 If the message The publisher could not be verified Are you sure you want to run this software is displayed click on Run 5 If the message An unidentified program wants access to your computer is displayed click Allow 6 Follow the instructions and answer the questions After the installation if the message This program might not have installed correctly is displayed click on This program installed correctly UNINSTALLING THE ANNUI T PROGRAM 1 Double click on ANNUI T uninstall 2 Follow the instructions and answer the questions The uninstall procedure is done by internet in order to permit a future installation STARTING ANNUI T 1 Start Windows 2 Double click on the ANNUI T icon ANNUI T Plus 8 0 3 DATA ENTRY WINDOW 3 ANNUI T Plus 8 0 AE File Activit
18. a future amount is determined Even if this method is based on the assumption that the inflation rate never varies from one period to another it gives a better comparison basis of values For this reason the actualization method remains a useful tool in investment project analysis In fact one of the most popular methods to evaluate and select investment projects is the net present value generally known as the N P V in financial circles In the N P V calculation the present value of each cash inflow is added up and the present value of each cash outflow is subtracted According to the N P V criterion if the result is positive the project should be retained but if the result is negative it should be rejected Note that the N P V is based on the hypothesis that each cash flow is reinvested at the same interest rate as the one used to actualize the cash flow also known as the discount rate The discount rate utilized in the N P V calculation depends on the investor s policies and can vary upon many factors and probabilities In general this rate is established according to the risk related to the project For example many enterprises use their average rate of return when the risk of the project is similar to the risk of their normal activities However if the risk of the project is considered higher they will normally demand a higher rate of return on their investment which means that the discount rate will be increased No
19. a payment modification at this date it will be possible for you to combine the 2 modifications Most of the time when there is a payment modification in effect at the starting date of the new interest rate change the 2 modifications have to be combined since the payment at this date is still valid You have to understand that the new interest rate affects only the interest calculation of the following periods Finally let us recall that if you want to change the interest rate for several periods starting at an irregular date you must enter 2 interest rate modifications since a modification at an irregular date can not have a duration of more than one period For more details refer to the section Interest rate modification at an irregular date 61 ANNUI T Plus 8 0 REPETITIVE MODIFICATION This kind of modification is also called a sequential modification Often this occurs when the lender accepts to take into account the fluctuating seasonal activities of the borrowing enterprise permitting the reduction of the payment amount during the off season Let us take the case of a fixed principal payment loan of 160 000 00 with an interest rate of 10 amortized over 20 years repayable by monthly payments starting on January 15 2012 and based on the following schedule For each year from January through April interest only payment For the other months 1 000 00 plus interest To register this scenario with ANN
20. addition with the Caisses Desjardins the insurance premiums are included in the interest rate written on the contract In some cases this calculation is rather complicated Note that the interest rate written on their loan contracts never has more than 3 decimals which is insufficient to establish an accurate amortization schedule Consequently for a better degree of accuracy in the interest calculation it is recommended to ask the Caisse Desjardins the one that issued the loan the following information TAU nominal interest rate excluding the insurance premiums PVS Life insurance premiums factor PIS Disability insurance premiums factor Once you have this information you must enter these values in the data entry window and ANNUI T will calculate with accuracy the nominal interest rate including insurance premiums Normally this will allow you to establish an amortization schedule which will correspond exactly to the Caisse Desjardins statement In the case where you do not need a high degree of accuracy in the amortization schedule ANNUI T can estimate the nominal interest rate including the insurance premiums To do so you must enter all the data except the interest rate Next you simply have to select Calculate Of course the degree of accuracy is not the same especially since they often round up the payment amount 67 ANNUI T Plus 8 0 Finally even if the Caisses Desjardins
21. can also indicate what you wish to copy amount and or the interest rate and or the description When modifications have been made to the schedule you must then select Calculate to upgrade the schedule ANNUI T offers 4 choices of calculation Calculation of the new regular contribution and the new regular withdrawal in order to preserve the same retirement capital and the same duration of withdrawals Calculation of the new retirement capital and the new regular withdrawal Calculation of the new regular contribution only In this case the retirement capital remains the same However if modifications were made in the withdrawals section the duration of the withdrawals may be shortened or ended with a balloon payment Calculation of the schedule without modifying the regular contribution amount nor the regular withdrawal amount Notice that in the schedule the Undo calculate icon allows you to cancel the calculation and return to the previous situation the one before selecting the Calculate function which is useful in case of an error Finally in this schedule you also have the Sum and Print functions You can also obtain the annual results by selecting Contributions annual results and Withdrawals annual results By default these annual results are established on the civil year basis but it is always possible to choose any other desired date 87 ANNUI T Plus 8 0 9
22. criteria defined in the CICA Handbook section 3065 capital lease or operating lease For more information please refer to the Worksheets section CLOSE This is used to return to the main Window 3 ANNUI T Plus 8 0 File Activity Report Worksheet GLentries Tool Batchprocessing Preference Help ANNUI T Plus Version 8 Copyright Utilimax Inc www annui t com ci A O PS IIS Figure 3 04 Main window 12 ANNUI T Plus 8 0 4 ANNUITY LOAN When you select Loan a second window is displayed to let you select the type of loan There are 3 different choices offered by ANNUI T First there is the Fixed payment loan where the payment is equal from period to period This is by far the most popular kind of loan The second choice is the Fixed principal payment loan where payments vary from one period to another For example a 72 000 00 loan amortized on 36 months has a monthly payment of 2 000 00 plus interest Since the interest will constantly fluctuate the payment amount varies periodically Finally you can select a Loan with residual value where payments are fixed and equal from period to period but with a balance at maturity the residual value This is popular in automobile financing contracts At maturity the borrower may pay the remaining balance of the loan often by returning the goods or refinance it This kind of loan is similar to a lease with a buy back option O
23. end of the term Remember that the Close function allows you to register a closure and to adjust the balance if needed Once the refinancing is entered you simply have to create a new scenario based on the new loan contract Of course to generate reports such as the accrued interest the 5 year principal repayments and the combined results remember that you have to select each of the scenarios related to the loan each of the terms In the past for a fixed payment loan a change of the interest rate only occurred in the case of a refinancing Now it happens more and more often that even for this type of loan the interest rate is floating This phenomenon is mainly due to the competition between financial institutions For example some financial institutions now offer loans with a floating interest rate that varies without exceeding a guaranteed maximum interest rate ceiling Thus in order to consider this new reality ANNUI T allows you to modify the interest rate of a fixed payment scenario In this kind of situation an interest rate change normally implies that the payment has to be modified from the next regular date until the end of the scenario For example when the interest rate of a fixed payment loan rises the payment has to be increased for the rest of the amortization period in order to be able to reimburse the loan without having a balloon payment at the end For this reason by default ANNUI T automatically sets
24. informations Client informations Activity Fixed payment loan Directory Others Scenario Example2 ajusted payment Q Normal Figure 4 03 Example of a mortgage with monthly payments 24 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet GL entries Roe E P E Initial amount Adjusted amount Number of periods Frequency of payments Compounding frequency Nominal annual interest rate Effective interest rate Periodic interest rate Days in year schedule Ist pmt date en End 08 02 2022 Calendar Payment Beginning of period payment yes no Adjusted payment Other informations Client informations Fixed payment loan Directory Others Gpanand Example3 ajusted payment Noma Figure 4 04 Example of a modified weekly payment 25 ANNUI T Plus 8 0 FIXED PRINCIPAL REMITTANCE F P R This is the periodical amount to reimburse with a fixed principal payment loan For example with this kind of loan 36 000 00 amortized over 12 months means that the fixed repayment of principal is 3 000 00 per month In other words the monthly payment is 3 000 00 plus interest Note that for a fixed principal payment loan the payment varies because even if the repayment of principal is fixed the interest usually decreases from one period to another ADJUSTED F P R This option allows you to adjust the calculated amount of the fixed principal
25. payment amount varying of X at every series Percent step payment series payment amount varying of X at every series Interest only payment series Fixed amount series For example in the case of a loan with monthly payment the lender and the debtor could decide that every year the payment amount for the first three months would be 200 and for every other month the payment would be the regular amount calculated by ANNUI T based on the interest rate and the number of periods to amortized the loan Freestyle payment series With this option a window is displayed to let you enter for any chosen period a special payment amount You can also indicate non payments Even for this kind of scenario ANNUI T is able to calculate a regular payment applicable to periods with no special payment registered The following illustrates an example A 27 094 04 loan is amortized over 2 years at 9 and is payable by quarterly payments every 3 months In this case we want to calculate the regular payment if at every second and third quarter of the year the payment amount increases by 1 000 00 over the one made in the previous year Answer 3 000 00 20 ANNUI T Plus 8 0 Note that once the unknown value is calculated ANNUI T automatically registers the modifications in the schedule For the user the procedure is quite simple You only have to indicate in the data entry window the kind of special series payment and fill out
26. remittance Normally this is used to round off a calculated amount RESIDUAL VALUE This represents the balance at maturity of a loan with residual value As opposed to a typical loan this kind of debt is not totally paid off at maturity Normally after the last payment the borrower has the choice between the payment of the remaining balance and a refinancing of this amount BUY BACK OPTION This is the final payment predetermined in a lease contract For example it can be stated that this amount would be 10 of the original value of the leased goods FUTURE VALUE The future value represents the amount to be received by the investor at maturity as the total of principal and interest accumulated on his investment 26 ANNUI T Plus 8 0 SCHEDULE WINDOW 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help INIT AMOUNT PER PMT YR COMP YR NOMINAL PAYMENT Li ssooo00 134412 Basis of 360 Days year Istpayment _1215 2010 Maturity date odia O Interest Payment Principal alance Interest rate EE a 9 500000 12 15 2010 1 344 12 63 162 55 9 500000 01 15 2011 1 344 12 62 318 47 9 500000 02 15 2011 1 344 12 61 467 70 9 500000 03 15 2011 1 344 12 60 610 20 9 500000 04 15 2011 1 344 12 59 745 91 9 500000 05 15 2011 1 344 12 58 874 78 9 500000 06 15 2011 1 344 12 57 996 75 9 500000 07 15 2011 1 344 12 57 111 77 9 500000 08 15 2011 1 344 12 56 219 78 9 500000 09 15 2011 1 344 12 55 320 73 9 500000 10 15
27. semester 01 15 2014 19 000 00 10 0000 Savings for this semester 07 15 2014 16 000 00 10 0000 Savings for this semester 01 15 2015 11 000 00 10 0000 Savings for this semester 07 15 2015 6 000 00 10 0000 Savings for this semester 01 15 2016 12 000 00 10 0000 Savings sale of this equipment ODAWHewWwnNao Copy Paste Insert cash flow Delete cash flow Extend Calculate Print Data 7 TO Net present value and intemal rate of retum IN Others ET Project 1 E EEE Figure 7 02 Example of the cash flows window Notice that the dates are displayed in order to provide better references and to reduce the risk of error when you enter the cash flows Note that a cash outflow disbursement must be entered as a negative number since a cash inflow has to be represented by a positive number For each cash flow you can modify the discount rate to take into account probabilities or other factors You can also enter a brief description in order to document your analysis 82 ANNUI T Plus 8 0 Since it frequently happens that the cash flow amount remains the same during a certain period of time ANNUI T allows you to copy a line of cash flow To proceed first you have to position the cursor on the line to be copied and select Copy Then you have to move the cursor on the first line where you want to copy the line and select Paste A screen is then displayed to enter the number of lines to paste In this window
28. software sorts all elements by column Consider the following case We have two files in which the disbursements were registered into 5 columns in both cases However the columns are completely different in the two files Using this report to combine the two files there would be 10 different columns If a column were present in both files the program would automatically combine these elements into a single column Finally in this report by clicking on the funnel image located at the top of a column only the disbursements that were classified in this column are displayed This way you get the detail of all assignments related to this GL account To return to normal simply click again on the funnel image 122 ANNUI T Plus 8 0 13 JOURNAL ENTRIES First this function allows you to import into many accounting programs Accpac Acomba Avantage MYOB QuickBooks Simply Accounting etc GL entries made from the Cash Disbursements Journal of ANNUI T Plus In the GL entries tab of the Cash Disbursements Journal you simply have to click on Export Then in the next window displayed you must indicate your accounting software the name of the export file and the folder you wish to save the file in Note that it is possible to click more than once on the Export button If this file name already exists in the folder the number following the name is increased the most recent file having the highest number For example this situ
29. the following information Number of regular payments preceding the first series 1 in the example Number of periods in a single series 2 in the example Number of regular payments between 2 series 2 in the example Total number of series 2 in the example Payment variation amount 1 000 00 in the example 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Tool Help INIT AMOUNT PER PMT YR COMP YR NOMINAL PAYMENT 27 095 04 3 000000 3 000 00 4 A Basis of 360 Days year Ist payment 10 15 2011 Maturity date 07 15 2013 Fin year end December 31 Interest Payment Principal Interest rate 2 9 000000 10 15 2011 3 000 00 2 390 36 704 9 000000 01 15 2012 4 000 00 3 444 14 21 260 54 9 000000 04 15 2012 4 000 00 3 521 64 17 738 90 9 000000 07 15 2012 3 000 00 2 600 87 15 138 03 9 000000 10 15 2012 3 000 00 2 659 39 12 478 64 9 000000 01 15 2013 5 000 00 4 719 23 7 759 41 9 000000 04 15 2013 5 000 00 4 825 41 2 934 00 9 000000 07 15 2013 3 000 02 2 934 00 0 00 9 000000 Issuedate Funds advance Adjust Close Modify Extend See Delete modifications Sum Print Data Activity Fixed payment loan Directory Othes scenario Example of special series g Noma Figure 4 01 Example of loan with dollar step payment series Finally for leases and fixed payment loans there is an option to force the last payment to be equal to the regular payment In th
30. to enter the real date When the function Issue date is selected the program displays the calendar You then have to double click on the desired date or to position the cursor on this date and press ENTER Note that the selected date can not be more than 2 complete periods minus 1 day prior to the default date 29 ANNUI T Plus 8 0 FUNDS ADVANCE This function allows you to increase the balance of a loan or a lease at any given date This is mostly used for loans with funds advanced by stages For example a lender could accept to lend 200 000 00 of which 150 000 00 would be advanced at the contract s signature and 50 000 00 one year later With ANNUI T to register this kind of event you always have to position the cursor on the line of the date of this supplementary funds advance before selecting Funds advance Then you simply enter the amount If this event occurs at an irregular date not a normal date of payment you first need to create this date using the Modify function to register an irregular payment of 0 If you want to enter a funds advance and a balance adjustment at the same date you must always register the funds advance first Note that in the schedule funds advances are listed at the right end which is after the balance column They are also listed when you select See Delete Modifications Finally a similar function exists for investment annuities and it is used for fun
31. y 94 229 29 8 500000 43 07 15 2014 i 94 097 78 8 500000 _ 441 08 15 2014 93 965 35 8 500000 ez2z22 2222 Print Quit Fixed payment loan Directory Examples E nario Mortgage g Caisses Desjardins Figure 4 14 Example of the Sum function 42 ANNUI T Plus 8 0 PRINT This function allows you to print the schedule for example a loan amortization schedule You always have to position the cursor on the first line to be printed before selecting Print For example if you wish to print from the beginning of the schedule you must position the cursor on the line of the period 0 In this case the fastest way is to press HOME When you select Print you have to indicate which line will be the last to be printed You can click on this line or move the cursor with the arrow keys PAGE UP PAGE DOWN or END The range to be printed is highlighted Once the print range is defined you have to click on Confirm print range at the bottom of your screen The program will then display the printing window For more details on this window refer to the Print function explanation in the section Data entry window DATA This option is used to return to the data entry window which gives you access to other functions such as Open Save Delete etc 43 ANNUI T Plus 8 0 REPORTS MIE Lease Investment Future value Disbursement Combine detailed
32. you can also indicate what you wish to copy cash flow and or rate and or the description It is also possible to insert a line Insert cash flow and to delete a line Delete cash flow In both cases you have to position the cursor on the line before selecting the function Finally the program allows you to add new lines of cash flows To do so you simply have to select Extend and enter the number of new lines desired Once all the cash flows are entered to determine the N P V and the I R R you must select Calculate Concerning the R R the program displays 3 different rates the nominal rate the effective rate the real interest rate based on the compounding frequency and the periodic rate the periodic interest factor Of course if the cash flow frequency and the compounding frequency are both annual the nominal I R R the effective R R and the periodic R R are all equal In fact it is the case for most examples that are found in the financial manuals because the authors try to facilitate the reader s understanding However in reality the cash flows can occur in all kinds of frequencies Therefore for better accuracy it is always preferable to proceed with the highest cash flow frequency For example if certain cash flows are annual while others are monthly you must select a monthly frequency This way you can register all of the cash flows according to their real frequency It is im
33. you wish to avoid the combination of a modification you have to double click on this modification Modification in progress Description of the modification in progress New interest rate Starting date 03 10 2011 Rate 11 000000 11 10 2015 Beginning of the modification arine New rate Adjusted interest modification X 01 10 2012 11 10 2015 New fixed principal remittance EIA Fixed principal payment loan Directo ae Example combinations of modif Noma Figure 4 25 Screen displayed for combinations of modifications If you continue you will obtain the 3 following modifications 1 From January 10 to February 10 2011 interest only payment 2 From March 10 through December 10 2011 interest only payment AND interest rate change 11 3 From January 10 2012 until the end of the scenario modification of the fixed principal remittance to 2 000 00 AND interest rate change 11 97 ANNUI T Plus 8 0 Of course you could make these 3 modifications one by one but the automatic combination is still much faster and reduces the risk of errors Note that the present example was rather simple but sometimes the new modification overlaps several other modifications lt 2 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help List of modifications hen the list of modifications is displayed it is possible to delete one or more modifications To select a modification to
34. 0 84 10 516 44 304 87 Figure 11 13 3 ANNUI T Plus 8 0 LEASE OBLIGATIONS SUMMARY AS OF 12 31 2011 Machine 2 10 800 00 11 000 PMT 120 55 OPT 1 447 00 1 447 00 1 447 00 1 447 00 Lessor escription al Figure 11 14 3 ANNUI T Plus 8 0 ER File Function LEASE OBLIGATIONS SUMMARY AS OF 12 31 2011 achine 2 10 800 00 11 000 PMT 120 55 OPT 1 447 00 1 447 00 8 682 00 6 2 Figure 11 15 110 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 ER File Function LEASE OBLIGATIONS SUMMARY AS OF 12 31 2011 2 447 00 Total Shortterm obligations Total long term obligations 20 641 84 Directory CVAANNUI T_Plus_8 Examples Update Schedule Sort Add Remove Print Close Edit description To restore an overwritten field selectthis field and p Figure 11 16 111 ANNUI T Plus 8 0 12 TOOLS Sales taxes calculation tool 3 Federal and provincial sales taxes calculation in Canada Function Help SS eyes eee ly ose Sales taxes on an amount Function Province of purchase Quebec E Print GST Refundable Provincial sales tax QST Refundable Erase data QST calculated on GST Purchase including sales taxes Close Tip included or other non taxable amount RESULTS To restore an overwritten field Purchase before sales taxes 1 000 0 select this field and F8 GST 50 0 ae QST 99 7 1 149 7 Tip included or other non taxable amount Total amount paid 1 149 7 If enterta
35. 00 0 15 20 1 344 12 _iswedae Eunds advance Adjust Close Modify Extend See Delete ae Print Da a Fixed payment loan acm Exampes RY Trucks Figure 4 08 Closing procedure window This procedure allows you to close the scenario before the maturity date You have to position the cursor on the line of the closure date before selecting Close Another way is to double click on the date for this modification in the schedule Note that if the date does not exist in the schedule you then have to use the Modify function selecting Irregular payment and entering 0 as the amount Of course the purpose of this modification is only to create the irregular date The modification will not be effective with the closure of the scenario As you can see in figure 4 08 for a loan or a lease you have the choice between a prepayment of the balance and a refinancing In the case of a prepayment of the balance you can always enter the amount of the final payment In other words if there is a difference between the final payment charged by the financial institution and the one calculated by ANNUI T you can modify this amount Note that sometimes lenders charge closing fees 33 ANNUI T Plus 8 0 In the case of a refinancing the scenario ends at the closing date but the final payment of the balance is ignored since this affectation of cash flow is not real The program allows you to modify the closing balanc
36. 00 00 Basis of 366 Days year Istpayment __05 01 2010 Maturity date ue sus Payment Principal 04 01 2010 60 000 00 12 000000 05 01 2010 1 091 78 500 00 59 500 00 12 000000 06 01 2010 GEM 60 106 41 07 01 2010 0 00 592 83 60 699 24 12 000000 08 01 2010 0 00 618 63 61 317 87 12 000000 09 01 2010 0 00 624 94 61 942 81 12 000000 10 01 2010 3 610 94 3 000 00 58 942 81 12 000000 11 01 2010 2 100 73 1 500 00 57 442 81 12 000000 12 01 2010 2 066 56 1 500 00 55 942 81 12 000000 01 01 2011 2 070 16 1 500 00 54 442 81 12 000000 02 01 2011 2 054 87 1 500 00 52 942 81 12 000000 03 01 2011 1 987 36 1 500 00 51 442 81 12 000000 04 01 2011 2 024 29 1 500 00 49 942 81 12 000000 1 992 59 1 500 00 48 442 81 12 000000 gt Issue date Funds advance Adjust Close Modify Extend See Delete modifications Sum Print Data Activity Fixed principal payment loan eect Others EEN Example of modifications g Normal Figure 4 22 Amortization schedule after registering the skipped payments O 0 Y 0 MA CG ON o In order to compensate the parties have agreed to an increase of 500 00 on the monthly fixed principal remittance for 11 months Then from January 1 through November 1 2011 the amount was modified to 2 000 00 per month Figure 4 23 represents the amortization schedule after entering this new modification 53 ANNUI T Plus 8 0 g ANNUI T Plus 8 0 File Activity Function Report Wo
37. 05 64 1 156 88 Total payment 4 218 87 4 209 44 4 174 54 Total principal 2 990 04 3 003 80 3 017 66 Ba Total advance 0 00 0 00 0 00 _ Total balance 164 813 50 161 809 70 15879204 Figure 4 17 Example of the Combine detailed report In the first column you have titles and the name of every selected scenario Each of the following columns represents a period on the basis of the chosen frequency a month a semester etc In these columns for each of the scenarios you have the periodical results interests payments and principal or principal variations At the bottom of each column the periodical total is displayed Note that the periodical totals correspond to the amounts displayed in the Combine summary report There is also a column for yearly results For example if the chosen frequency is monthly after 12 columns the annual results are displayed Finally at the right end you have the grand total 47 ANNUI T Plus 8 0 PARTICULARITIES OF MODIFICATIONS MODIFICATION CONFLICTS When you modify the schedule sometimes a window appears to warn you of a conflict of modifications Most of the time this occurs when the new modification overlaps an existing modification of the same type For example if at a certain date you have entered a change of payment and you now want to enter a skipped payment you will be warned of a conflict and asked to make a choice which i
38. 12 1 344 12 927 86 51 652 79 9 500000 02 15 2012 52 061 71 51 652 79 0 00 Figure 4 09 Prepayment of the balance 34 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Tool Help INIT AMOUNT PER PMT YR COMP YR NOMINAL PAYMENT CM 5500000860 34417 Basis of 360 Days year tstpayment 12152010 Maturity date den N Principal alance Interest rate 02 15 2011 i 1 344 12 b 61 467 70 9 500000 03 15 2011 1 344 12 60 610 20 9 500000 04 15 2011 E 1 344 12 59 745 91 9 500000 05 15 2011 1 344 12 58 874 78 9 500000 06 15 2011 l 1 344 12 i 57 996 75 9 500000 07 15 2011 E 1 344 12 57 111 77 9 500000 08 15 2011 E 1 344 12 56 219 78 9 500000 09 15 2011 1 344 12 i 55 320 72 9 500000 10 15 2011 3 1 344 12 54 414 56 9 500000 11 15 2011 l 1 344 12 53 501 22 9 500000 12 15 2011 1 344 12 52 580 65 9 500000 4 01 15 201 2 1 344 12 E 51 652 79 2 500000 20 50717 59 Figure 4 10 Refinancing 35 ANNUI T Plus 8 0 MODIFY This option enables you to change the payment or the interest rate for one or more periods When you select the Modify function a screen is displayed so that you can enter the starting date of the modification By default this date is the one identified by the cursor when the Modify function was activated but you can always enter another date Thereafter the program displays the modification windo
39. 6 01 Example of a penalty calculation To do so you simply have to fill in the data entry window Note that the Number of periods remaining in the term is the number of periods remaining in the current contract not the number of periods remaining for amortization As for the Date of the last regular payment made it is the date of the actual balance of the loan 76 ANNUI T Plus 8 0 In the field New nominal interest rate you must enter the current rate for a term equivalent to the remaining duration of the contract In the example the initial term was 5 years but the remaining duration is now 3 years Consequently you must enter the interest rate for a term of 3 years which is 9 5 Of course it has to be the rate applicable to the same type of loan mortgage personal commercial etc Finally for interest calculation ANNUI T offers 2 methods Theoretical and Real With the Theoretical option the interest and the balance are simply estimated by formulas With the Real option the interest and the balance are established by generating a real schedule Nevertheless most of the financial institutions use the theoretical interest calculation method to establish the amount of the penalty Once the data is entered and you have selected Calculate the results are displayed Concerning the Normal balance at the end of the term it is the balance that would exist at the end of
40. ANNUI T Plus 8 0 b 7 gt ANNUI T Plus 8 0 software User manual In this manual the term ANNUI T refers to the ANNUI T Plus 8 0 software Note that in order to improve the viewing of the illustrations you can always zoom in for example at 125 If you have installed the program or the trial version you already have this manual on your computer This file was saved in the Doc folder of the installation directory by default C ANNUI T_Plus_ 8 a A IT ILL AAA o Utilimax Inc Copyright c 2012 All rights reserved www annui t com ANNUI T Plus 8 0 TABLE OF CONTENTS 1 Terms and conditions iii 1 2 Generalities INTOdUCION cita nr ss dr re di re TARA 2 System requirements SN tl ed 2 Installing the ANNUI T program occccccccnccccncnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnonnnnnnnnnnnnnnnnnnnns 3 Uninstalling the ANNUI T program sessesesesenesenesenesenenensee 3 Starting AUS UO sl erene eneee Pern er inte ver sn su en variant irer ieee n ver meer ys 3 3 Data entry window O CDE MEE PRT gun a aa TS 4 COCA in nn lin lon nie oasis ni ni ne ln t sos n 6 Modify data se Sete o eee ea 6 AAA A A 7 SOS SS RN A AS e 8 Calendar lat A Ad rta 8 A A II el sae elas el cath SOS 8 Open ES Re ue tt Wai statate Ne Nu statin it Nata st en 9 SA IA A EP EEPE TEE 10 DO 51 2 AN Vere ION SORE PCR Ver NCR D OA 11 OIM INTOMMGAUOM SE taco hi oie A biG Neh aot da 12 Sales taxes information cacao S
41. ATIONS This function displays the list of the funds advances or funds withdrawals in the case of an investment annuity and the modifications affecting the schedule skipped payment change of interest rate etc It is also from this window that you can erase these kinds of schedule modifications To do so double click on the line to delete An X then appears at the beginning of this line Note that there is also an icon to erase all the changes made previously in the schedule The deletion is done when you exit the window by clicking on Quit To cancel a deletion double click on the same line again 3 ANNUI T Plus 8 0 Ses File Activity Function Report Wwe et Tool Help List of modifications When the list of modifications is displayed it is possible to delete one or more modifications To select a modification to be deleted simply double click on it End of a Begining ot Modification description New payment New interest rate Adjusted interest modification modification 10 01 2011 New regular payment es fp Delete all modifications c Fixed payment loan Figure 4 13 Example of the See Delete modifications window 41 ANNUI T Plus 8 0 SUM When a schedule is displayed this function allows you to calculate the sum of interests the sum of payments and the sum of principal or principal variations for any given interval Furthermore for annuities
42. Figure 11 11 107 ANNUI T Plus 8 0 Finally let us recall that it is possible to add lines for example to include advances from shareholders To do so simply click on Add and enter a brief description of the loan the debtor and the securities related to the loan Then fill out the fields in the columns Remember that you can also delete an added line by positioning the cursor on this line and by selecting Remove 108 ANNUI T Plus 8 0 LEASE OBLIGATIONS SUMMARY Again this function provides more information to support the financial statements and the note concerning the lease contracts Remember that there is an option to choose whether or not to round the data to the nearest dollar For each of the selected scenarios we obtain among other things interest paid during the financial year balances at the beginning and at the end of the financial year lease payments for the next 5 financial years total interest etc In the following illustrations by reading the column headings you can see all available information 3 ANNUI T Plus 8 0 File Function LEASE OBLIGATIONS SUMMARY AS OF 12 31 2011 04 12 2021 11 000000 10 800 00 0 00 22 800 008 To restore an overwritten field select this field and press F8 Figure 11 12 109 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 LEASE OBLIGATIONS SUMMARY AS OF 12 31 2011 Machine 2 10 800 00 11 000 PMT 120 55 OPT 283 56 68
43. R ee ER en nn EE oe PEE CE ERE er ERE Ee eee 31 COS diese EEEE 33 MOV plot nl me tran ee P De sh trad Lesh ne nn acerlo 36 Extend LR A At A A IS 39 See Delete modifications AA AAA 41 A ei oer R i R Pee Pee Oo A Pee Perot 42 MPMI MERE id zat adel sats lets CE DEEE MER SES M CE EN DE CES DER CE DER CE DER EE 43 OAI O le eus lues anda aed sk 43 Reports Procedure for reports ni A A AAA AE nnmnnn 44 Combine summary and Combine detailed 46 ANNUI T Plus 8 0 4 Annuity con t Particularities of modifications Modification comics ani men e a nn Re node 48 Combinations OF modifications LE tes 56 Interest rate modification at an irregular date 59 Interest rate modification for a fixed payment scenario 60 Repetitive modification to it Da 62 Maximal number of modifications 63 Miscellaneous Change of the financial year end date 64 Caisses Desjardins Oasis css ne sr es sr a sr 65 5 Future value Simple interest on a periodical basis 69 Compounded interest on a periodical basis 69 Simple interest on a daily basis 70 Compounded interest on a daily basis 70 Procedure to calcul
44. TE FUTURE VALUE C 100000 Issue date Maturity date Fin year end December 31 Deposit Vithdrawal Interest Balance Nominal rate 01 15 2011 10 000000 02 15 2011 e 10 084 93 10 000000 03 15 2011 N P 10 162 29 10 000000 04 15 2011 i 10 248 60 10 000000 05 15 2011 10 332 84 10 000000 06 15 2011 10 420 60 10 000000 07 15 2011 y 10 506 25 10 000000 08 15 2011 j 10 595 48 10 000000 09 15 2011 A E 10 685 47 10 000000 10 15 2011 i 10 773 30 10 000000 11 15 2011 y 10 864 80 10 000000 12 15 2011 A 10 954 10 10 000000 01 15 2012 E 11 047 13 10 000000 02 16 2012 A 11 140 95 10 000000 03 15 2012 i 11 229 47 10 000000 04 15 2012 y 11 324 84 10 000000 05 15 2012 A i 11 417 92 10 000000 06 15 2012 E 11 514 89 10 000000 Deposit Withdrawal Close adjust Extend Modify See Delete modifications Sum Print Data ET uture value compounded interest exact day ESC Others EE Example of future value g De Figure 5 02 Example of a schedule for a future value scenario As you can see in the schedule you can register additional deposits advances for loans and withdrawals reimbursements for loans You can also select Close if the scenario ends before the maturity date As usual in these circumstances you are allowed to adjust the final balance Moreover the Adjust function enables you to adjust the interest or the balance at any give date If the
45. UI T first you have to let the program calculate the theoretical fixed principal remittance based on a duration of 240 months 666 67 Then you must enter the real amount 1 000 00 in the F P R adjusted field Next you could enter the 20 modifications interest only payment for 4 periods but fortunately ANNUI T is able to execute this kind of task automatically To do so you simply have to click on the Repetitive modification check box in the modification window Next you must enter the number of periods that the modification is effective which means the duration of one sequence 4 periods January through April You also have to indicate the number of periods that the modification will not be effective which represents the number of periods preceding the next sequence of the modification 8 periods May through December Finally you must enter the number of repetitions 20 series of modifications If the repetition is effective until the end of the scenario you can check the box Modification to the end of the scenario and ANNUI T will calculate the number of repetitions Note that a repetitive modification always has priority over any other modification In other words no conflict is listed Moreover if there is a possibility to combine this repetitive modification with another one modification of the payment and the interest rate the program will proceed automatically Normally this does not cause an
46. ao the bt ie et he atone eh eats et tt ee ks es he 12 Lease contract classification issues 12 Close data entry window rene 12 4 Annuity Loane ARR ARR RE na 13 E Yo boy E o E A E TAE EAA EA AE 13 INM ed ae e a ea e eae aa edad da el 14 Glossary of the data entry window A O OS 15 Adjusted initial amount sisi 15 ANNUI T Plus 8 0 4 Annuity con t Number Of periods ss 15 VE NN LS 16 Frequency of Pay Tienes cacaos ne ne A A eee 16 Compounding frequency 2 A A fo i fol nt 16 Nominal annual interest rate 17 Effective interest rate cmri Ailes nt ne etre ee entre retener 17 Periodic interest rate necie i ei iene eeii ieira iea ieie 17 Equivalent interest rate 18 DAYS WNYC scot e ois er tro tito feed tre ne fi od tid od ti og ti i 18 Payment A dd de 20 Beginning f peri d payment ste teen tentent tentent cent tn te tnt eiii 22 RAJUsted payment a aee tae A OP Sc Meh RE 22 Fixed principal remittance F P R s 26 Adjusted A Ps RSS Re cube deed ode cad ee ae suk td tal cubed eiea 26 Residual val urea 26 BUY back OPIO Un oe te teen 26 Future val e nd enr oh i a IG a oh a eG aaa et aaah eS asset aioe 26 Schedule window Moving through the schedule ss 27 ae O A eke eaten peeks ek ees a 27 PANDO SS re eile lol eres Git ed fein ead Gta es oe ee tt 28 ASUNTO tc dels dedos ed ds oa dos e dd ds dad des dd dd Pee ce Pe eee 29 EUROS ADVANCE RO REO 30 AUS ER Pe ce E
47. ate a future value 71 6 Penalty calculation based on the interest rate differential AA A A 75 7 Net present value N P V and internal rate of return I R R 79 8 Retirement retirement planning 84 De WN AT Te dr AAA AAA 88 10 U S calculation methods ooooooooocccocccoococonocooooooooonc cnn nn nn nn nnnnn nono nonononnnnnns 91 Tla Worksheets siii A r 94 Procedure to select the scenarios ooooccocccccocccococonoonnnnnonnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnns 95 ne nl te D GTS ET TT EE EESE EEEE E EE eE eE EE EEE AEE 96 9 VOAP TODAY A Ea E E E T R 98 ESA A nr 99 ANNUI T Plus 8 0 11 Worksheets con t Lease contract classification 2 0 0 cece eee eccecceccecaeceeceeceeeeeeecueceeseeaeeueceeseeaeenteneaees 99 Long term debt presentation EIC 122 cnn ono nn nnnnnnnnnnnns 104 Long term debt summary 20d tdo 106 Lease obligations summary ss 109 12 Tools Sales taxes calculation too iii iiieicecercereeeerceeseee 112 Cash Disbursements Journal iii iiiiiieieecereereeeeeceeseee 114 13 Journal entries ere 123 ANNUI T Plus 8 0 1 TERMS AND CONDITIONS At the beginning of the installation it is essential to carefully read the terms and conditions because the installation will indicate your acceptance of the foll
48. ation happens when the user clicks on Export and then realizes that he made a mistake or forgot a disbursement Once the export is done the journal entries are ready to be imported into the accounting software This procedure differs from accounting programs You can refer to your user manual or call your software support if you do not know how to import GL entries This is usually not too complex This module is also used by those who must regularly make many journal entries for loans leases or investment annuities lenders enterprises offering financing of their products or capital lease contracts etc However the procedure is slightly different In the case of capital leases it is important to note that the program does not make the initial journal entry the one to register the sale of the asset from the lessor point of view or the acquisition of the leased asset from the lessee point of view Furthermore for lease contracts the software does not generate journal entries for an additional amount new advance or if the contract ends before the maturity date closure case You must understand that these kind of events affect other accounts ex gains or losses on asset disposals or represent irregular situations that make it necessary to record manually journal entries 123 ANNUI T Plus 8 0 Of course in order to be able to make journal entries for a scenario the software needs to know which general ledger GL acco
49. ator will correspond to the future value that precedes the last period in the ANNUI T computation 14 ANNUI T Plus 8 0 GLOSSARY OF THE DATA ENTRY WINDOW INITIAL AMOUNT The initial amount is the amount borrowed or the initial balance of a lease contract or an investment annuity ADJUSTED INITIAL AMOUNT This option can be used when the initial amount is the value to be calculated by the program Once ANNUI T has determined this value you can modify the result for example to round off the amount NUMBER OF PERIODS This is the number of amortization periods for a loan or a lease or the number of deposits for an investment annuity For example let us take the case of a mortgage with a 5 year term amortized over 25 years with monthly payments The number of periods to be entered in the data entry window is 300 periods 25 years x 12 payments per year Notice that the term of the contract 5 years in the example is not relevant here For a lease contract the buy back option is considered to be the last payment Consequently this has to be countered in the number of periods to be entered Note that there is a maximum limit of duration allowed depending on the payment frequency and the kind of scenario For example for a loan or a lease with fixed payments on a monthly multiple basis annual semi annual every 4 months quarterly every 2 months and monthly the maximum duration of amortization is 50 years In all other ca
50. ault this date is used to establish the annual results Normally to modify this date you must select Modify data and enter the desired date However as explained previously once the schedule has been changed skipped payment interest rate modification etc the Modify data function is no longer available Nevertheless it is always possible to change this date in the data entry window by selecting Modify the financial year end in the menu 64 ANNUI T Plus 8 0 CAISSES DESJARDINS LOANS To calculate loan interest the Caisses Desjardins actually use 2 different days in year basis Generally to calculate loan interest the Caisses Desjardins use the 365 25 days in year basis for ALL their loans EXCEPT when the compounding frequency is semi annual and when the payment frequency is on a monthly multiple basis annual semi annual every 4 months quarterly every 2 months and monthly In these circumstances they apply the 360 days in year basis Actually the only loans of this kind offered by the Caisses Desjardins are mortgage loans repayable monthly In other words it is presently the only case where they use the 360 days in year basis Thus with the Caisses Desjardins option offered by ANNUI T for all the loans which the payment frequency is weekly or every 2 weeks the days in year basis is always 365 25 and you are not allowed to change this value For the other payment frequencies which a
51. be deleted simply double click on it y interest rate Adjusted interest Beginning of End of 01 10 20 1 1 finte t Ey Sa Ss 03 10 2011 12 10 201 Interest only payment new rate Variable 11 000000 01 10 2012 11 10 2015 New fixed principal and int rate 2 000 00 11 000000 HS Delete all modifications Figure 4 26 List of modifications after the interest rate change 58 ANNUI T Plus 8 0 INTEREST RATE MODIFICATION AT AN IRREGULAR DATE As we know the interest rate can sometimes change at an irregular date a date different from the normal payment date according to the chosen frequency In these circumstances with ANNUI T if the new interest rate is applicable for several periods you need to enter 2 modifications since a modification at an irregular date is only valid for the specified date The first interest rate modification has to be made on the irregular date The second one must start at the next regular date and therefore can have a duration of several periods For example let us take the case of a fixed principal payment loan repayable on the 1 day of each month If the interest rate changes on March 15 2012 you have to register at this date a first interest rate modification Since this date is irregular the duration is automatically set for one period only Then you must enter a second interest rate modification starting at the next regular date April 1 2012 If the duratio
52. be used stays the same for every period However when an irregularity occurs for example a late payment with a 360 days basis interests are not calculated the same way and depend on the lender s policies For example Canadian chartered banks often use a pro rata for this purpose where the Caisses Desjardins use a method based on the concept of daily equivalence within a period The second method uses a 365 or more days in year basis with the assumption that every day has the same importance With this method the periodic interest rate must be determined every time that the interest has to be calculated This rate is based on the real number of days elapsed since the last interest calculation This is why even if the payment frequency is not respected the calculation method remains the same This last method is mainly used when the payment frequency is more than 24 times per year In Canada most of the financial institutions use this method for mortgage contracts when the payment frequency is weekly or every 2 weeks In Canada if the payment frequency is less than 26 times per year for example with a monthly payment frequency the 360 days in year basis is by far the most popular However the general method of the Caisses Desjardins is based on a 365 25 days in year basis but for mortgages with monthly multiple basis payment annual semi annual every 4 months quarterly every 2 months and monthly they use a 360 days
53. c benefits of the asset based on the estimated economic life In fact it is considered to be the case when the lease term equals 75 or more of the leased asset economic life In this window for this criterion the user must enter the duration of the economic life in years Then the program calculates this duration in periods ANNUI T also calculates the lease duration in periods but the user is allowed to modify this cell for example to consider a bargain lease renewal option that is reasonably assured Worksheet for lease contract classification Criteria 1 and 2 Criterion 3 Criterion 4 4 Conclusion Required information for criterion 3 Estimated economic life of the leased asset 8 000 years or months supposing normal repairs and maintenance Duration of the lease based on the definition given for criterion 3 months Including a renewal option ifthe renewal is reasonably assured for example ifthe lease agreement contains a bargain lease renewal option However this duration can not extend beyond the date of the bargain purchase option Criterion 3 Is the lease term equal 75 or more ofthe leased asset economic life Lease duration duration of the leased asset economic life To restore an overwritten field select this field and press F amp 318 Close Figure 11 03 Example of criterion 3 in the lease contract analysis worksheet 100 ANNUI T Plus 8 0 The main advantage of ANNUI T so
54. cation is entered the program displays the list of modifications in conflict As illustrated in figure 4 21 there are 3 conflicts The new modification overlaps the end of the modification beginning May 1 2010 case 3 conflict completely overlaps the one starting July 1 2010 case 2 conflict and also overlaps the beginning of the modification starting September 1 2010 case 1 conflict If you confirm the new modification you will end up with the following modifications 1 May 1 2010 modification of the fixed principal remittance to 500 00 2 From June 1 through September 1 2010 skipped payment with interest updated 3 October 1 2010 modification of the fixed principal remittance to 3 000 00 50 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help INIT AMOUNT PER PMT YR COMP YR NOMINAL REMITTANCE 12 2000000 1 500 00 Basis of 366 Days year Istpayment 05 01 2010 Maturity date a yearend oe 31 Principal Ba 60000 00 12 000000 1 091 78 500 00 59 500 00 12 000000 01 06 2010 E 1 106 41 500 00 59 000 00 12 000000 01 07 2010 A 1 581 92 1 000 00 58 000 00 12 000000 01 08 2010 1 591 12 1 000 00 57 000 00 12 000000 01 09 2010 A 3 580 93 3 000 00 54 000 00 12 000000 01 10 2010 E 3 532 60 3 000 00 51 000 00 12 000000 01 11 2010 2 019 78 1 500 00 49 500 00 12 000000 01 12 2010 1 988 22 1 500 00 48 000 00 12 000000 01 01 2011 1 989
55. compilation In the Setup tab first you must indicate the default province for any new disbursement When you select the province the program displays the GST rate and if applicable the provincial sale tax PST usually in effect in this province However you are allowed to modify these rates and to specify if a tax is refundable or not for the enterprise It is also in this screen that you can enter the name and the GL account number of each of the columns you wish to use 114 ANNUI T Plus 8 0 gt ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help Disbursements Accounts GLentries Default for a new purchase Province of purchase GST Refundable Provincial sales tax QST Refundable QST calculated on GST Column name and GL account admissible GL account km fortaxes Name abbreviation max 30 car optional Per km allowance Entertainment expenses restaurants etc 50 00 Entertainmentemwenses Jl 5555 Other expensel Other expense2 Other expense3 Other expensed Other expenses Miscellaneous Account for total disbursement bank advances etc GST or HST credit QST credit Cash disbursements journal ee Examples PET J Brown expense account 03 2012 Es Figure 12 02 Example of the Setup tab of the Cash Disbursements Journal 115 ANNUI T Plus 8 0 The Disbursements section of ANNUI T Plus looks like a spreadsheet There is many separate columns
56. date there is indeed a case 2 conflict This means that the existing modification will be deleted Notice that this situation happens only when the chronological order based on the starting date of each modification is not respected 49 ANNUI T Plus 8 0 For these reasons if you want to make a modification at a regular date and a modification at an irregular date in the same interval you must always start with the regular date modification otherwise the irregular date will be erased Moreover when proceeding with several modifications it is always preferable to enter them chronologically since it is simpler and faster To illustrate different cases of conflicts let us take the following example An enterprise has contracted a loan of 60 000 00 repayable by 40 monthly payments of 1 500 00 plus interest fixed principal payment loan at 12 starting on May 1 2010 As shown in figure 4 20 the lender has accepted to modify the 1 500 00 monthly principal remittance of the first 6 months as follows For May 1 and June 1 2010 500 00 for July 1 and August 1 2010 1 000 00 and for September 1 and October 1 2010 3 000 00 Due to financial problems the enterprise has been unable to make the payments for the months of June through September 2010 With ANNUI T to reflect this situation you have to register a skipped payment modification for a duration of 4 periods beginning June 1 2010 As soon as this modifi
57. djust the results with those of a financial institution One main reason that differences occur is because not all the financial programs use the same number of decimals 31 ANNUI T Plus 8 0 Furthermore in the schedule ANNUI T rounds off the numbers at 2 decimals This is not the case of all financial programs In fact many calculators make amortization schedules without rounded payments which is impossible in reality For these reasons the possibility to adjust the interest or the balance is useful Note that for accounting purposes you do not have to adjust the results at every period The important thing is to register all the transactions and to be sure that the beginning balance and the year end balance are the same as those of the lender This way the total interest and the total principal repayments will be right The only difference will be in the allocation of interest but this is less important on an annual basis It is also important to adjust the results before generating the reports Accrued interest 5 year repayments etc in order to obtain a greater degree of accuracy The adjustment of the balance is not allowed for a loan with fixed principal payment because for this kind of loan balance differences are not normal Nevertheless you can affect the balance with the Modify function by changing the amount of the fixed principal remittance Also balance adjustment is not allowed on the date of a
58. ds withdrawals 30 ANNUI T Plus 8 0 ADJUST ox File Activity Function Report Worksheet Tool Help Type of adjustment INIT AMOUNT PER PMT Interest adjustment 64 000 00 is C Balance adjustment Istpayment 12 15 2010 Ma Actual situation at this date PER DATE INTEREST PAYMENT PRINCIPAL BALANCE 11 15 2010 __10p9 15 2011 45 07 1 344 12 899 05 5532073 12 15 2010 01 15 2011 Modification to be made 02 15 2011 03 15 2011 q PER DATE INTEREST PAYMENT PRINCIPAL BALANCE 04 15 2011 10 09 15 2011 1 344 12 899 05 05 15 2011 06 15 2011 i 344 12 89905 55 320 73 9 500000 906 16 54 414 57 9 500000 1 344 12 913 34 53 501 23 9 500000 _ 1 344 12 920 57 52 580 66 _ 9 500000 _iswedae Funds advance Adjust Close Modify Extend See Delete modifications Sum Print Data Figure 4 07 Screen for interest or balance adjustment 0 40M 4 CN 57 a eat This function enables you to adjust the interest or the balance at any given date Very few programs allow these kinds of adjustments To proceed you must position the cursor on the line of the amount you intend to modify before selecting the Adjust function Then you have to indicate the type of adjustment interest or balance Another way is to double click on the amount to modify in the schedule Finally you simply have to enter the desired amount Most of the time this type of modification is made to a
59. e GL entries that can be imported into many accounting software such as Accpac Acomba Avantage MYOB QuickBooks Simply Accounting etc To create the export file you have to click on Export Then in the next window displayed you must indicate your accounting software the name of the export file and the folder you wish to save the file in 120 ANNUI T Plus 8 0 Note that it is possible to click more than once on the Export button If this file name already exists in the folder the number following the name is increased the most recent file having the highest number For example this situation happens when the user clicks on Export and then realizes that he made a mistake or forgot a disbursement Once the export is done the journal entries are ready to be imported into the accounting software This procedure differs from accounting programs You can refer to your user manual or call your software support if you do not know how to import GL entries This is usually not too complex Because it is normal to make errors ANNUI T Plus even allows you to reverse the journal entries Therefore if you ever import GL entries of this type into your accounting software and some of them contain errors the best way to correct the situation is often to reverse all of them Then you can make the necessary corrections and create a new export file 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help 00
60. e if needed However this kind of adjustment is denied for a fixed principal payment loan because the only way to modify the balance of this type of loan is to use the Modify function to change the amount of the fixed principal remittance Finally for a lease contract the closing procedure can also be used to re enter the buy back option that has been deleted with the Extend function On the following illustrations you will find 2 examples of a closure The first one represents a prepayment of the balance The second one illustrates a refinancing Notice that in both cases the initial duration was 60 periods and a closure occurred on the 15 period 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Tool Help INIT AMOUNT PER PMT YR COMP YR NOMINAL PAYMENT Li 2 500000 34417 Basis of 360 Days year 1stpayment 12 15 7070 Maury date at Doc bar Interest Payment Principal Interest rate 02 15 2011 1 344 12 850 77 61 467 70 9 500000 03 15 2011 1 344 12 857 50 60 610 20 9 500000 04 15 2011 1 344 12 864 29 59 745 91 9 500000 05 15 2011 1 344 12 871 13 58 874 78 9 500000 06 15 2011 1 344 12 878 03 57 996 75 9 500000 07 15 2011 1 344 12 884 98 57 111 77 9 500000 08 15 2011 1 344 12 891 99 66 219 78 9 500000 09 15 2011 1 344 12 899 06 55 320 72 9 500000 10 15 2011 1 344 12 906 16 54 414 56 9 500000 11 15 2011 1 344 12 913 34 53 501 22 9 500000 12 15 2011 1 344 12 920 57 52 580 65 9 500000 01 15 20
61. e is 6 5 the payment is 870 77 and the balance on February 10 2012 is 125 106 08 With ANNUI T the solution to this case is as follows First you have to enter the balance as the initial amount and choose a sufficient number of periods for amortization purposes Let us say 300 periods Secondly you have to indicate the payment frequency and the compounding frequency semi annual since it is a Canadian mortgage Thirdly you must enter the nominal interest rate 6 5 and the first payment date March 10 2012 which is the first payment after the initial balance Finally you have to select Calculate Then the program determines the payment This result is of little importance because you have to modify it to enter the real payment amount 870 77 Figure 4 02 illustrates this example 22 ANNUI T Plus 8 0 Note that this situation occurs most of the time when you want to generate an amortization schedule from financial statement figures 3 ANNUI T Plus 8 0 BEA Fie Activity Function Report Worksheet Investment Future val Penalty Adjusted amount 125 106 08 Number of periods Frequency of payments Compounding frequency Nominal annual interest rate Effective interest rate Periodic interest rate Days in year Payment ero Beginning of period payment yes no Adjusted payment Other informations Client informations Fixed payment loan Directory Scenario Exam
62. e is a change of the interest rate Remember that to make this type of modification you can also double click on the interest rate to modify in the schedule Notice that the impact of an interest rate change starts only at the next period since interest calculation is always made according to the interest rate of the previous period For example if the payment frequency is monthly and the interest rate changes in January this will affect the interest of February The program also allows you to change the interest rate at an irregular date which is often useful for a fixed principal payment loan In fact for a fixed principal payment loan the payment varies from one period to another and the interest rate is often floating For example the interest rate could be 2 over the prime rate Thus the rate can change at anytime 37 ANNUI T Plus 8 0 As fixed payment loans are concerned a change of interest rate usually occurs at the time of a refinancing As mentioned before ANNUI T allows you to take into account refinancing for details see Close However even for this kind of loan the program lets you change the interest rate For more information see Interest rate modification for a fixed payment scenario in the section Particularities of modifications Once the kind of modification is selected if it is the case you can check the box Repetitive modification This option is used for modifications that occ
63. e periodic rate is normally used in fixed payment loans It can be defined as an adjusted interest rate since it takes into account the effective interest rate and the payment frequency Normally when this rate is determined the interest calculation at a given date is very simple since it is equal to the preceding balance multiplied by the periodic interest rate If the interest calculation method is based on 360 days per year for more details please refer to Days in year the periodic rate is equal from period to period 17 ANNUI T Plus 8 0 Otherwise in Canada if the calculation basis is 365 days or more per year the periodic interest rate changes continuously because this method is based on the real number of elapsed days since the last date of interest calculation EQUIVALENT INTEREST RATE This interest rate relates to a method only used by the Caisses Desjardins For more details on this particular method please refer to Caisses Desjardins loans in the section Miscellaneous DAYS IN YEAR This section applies for Canadian interest calculation methods For U S methods please refer to chapter 10 U S calculation methods Whatever the financial institution interest is always determined according to the elapsed time as a fraction of a year Fundamentally the annual number of days used in calculations is simply an expression to identify the method used to calculate this fraction The paym
64. en checks the future value to be sure that the scenario makes sense You can also select Loan type scenario This option has no impact on calculation It only changes the terminology Advances Reimbursement instead of Deposit Withdrawal Note that for the duration you can enter the number of periods in order to let the program establish the maturity date or you can enter the maturity date to let the program calculate the duration 71 ANNUI T Plus 8 0 The duration displayed in the data entry window represents the number of completed periods To clarify let us take the following case Issue date January 1 2011 Interest calculation frequency Monthly Maturity date December 15 2011 Notice that this maturity date is an irregular date which means that it is not a regular date of interest calculation according to the chosen frequency In this example the duration displayed in the data entry window would be 11 periods Nevertheless the program would calculate the interest up to December 15 2011 Therefore in the schedule you would have 12 periods the last one being a fraction of a period Finally ANNUI T also allows you to enter a supplementary calculation date This option is useful when you want to know the accumulated interest the accrued interest and the balance at a given date for example at the year end date Since you can save a future value scenario it is then possible to obtain the u
65. enarios saved on a hard disk or another device First as usual you have to indicate the disk drive the type of scenario loan lease investment future value N P V I R R retirement etc and the directory For more information on this procedure please refer to the section Open Next you have to identify the scenarios to be deleted To avoid errors you should always activate the Details icon to display the scenario description before deleting it When only one scenario has to be deleted you simply have to click on the file name in the list To delete several scenarios in the same directory you have to keep the CTRL key pressed and click on each file to be deleted If the scenarios to be deleted are consecutively listed you may also proceed by block deletion In this case you have to click on the first scenario press and hold the SHIFT key and click on the last scenario to be deleted Once the selection is done click on Delete 11 ANNUI T Plus 8 0 OTHER INFORMATION This icon is used to enter the name of the debtor and the securities attached to a loan This information is optional and is used in some ANNUI T Plus worksheet SALES TAXES INFORMATION This function is for a lease scenario and allows you to register up to 2 sale taxes for example GST and QST in Quebec LEASE CONTRACT CLASSIFICATION This module is to help you determine the nature of a lease contract based on the
66. ent calculation is not affected by the method used except if the payment frequency is weekly or every 2 weeks For example if the payment is monthly whatever the days in year basis used the payment remains the same Nevertheless the days in year basis used will always influence the interest calculation In other words the interest amount varies from one method to another Remember that the interest amount for a given period is usually equal to the preceding balance multiplied by the periodic interest rate The formula for the periodic interest rate depends on the days in year basis used 360 or 365 or 365 25 or 366 days Note that in the data entry window when you make your Days in year selection 366 means that a 366 days in year basis will be used in the interest calculation for the number of days included in a leap year and a 365 days basis for the number of days included in a normal year Even if there are many choices for the days in year basis there are only 2 main methods to calculate an amount of interest The first method uses a 360 days per year basis with the assumption that every period has the same importance 18 ANNUI T Plus 8 0 The 360 days basis assumes that a year is composed of equal periods for example one month 1 12 one week 1 52 etc even if in reality the number of days can be different from one period to another As long as the payment frequency is respected the periodic interest rate to
67. ent interest rate is often equal to the nominal interest rate For example this equality occurs when the compounding frequency is identical to the payment frequency which happens for the majority of personal loans Note that in contrast with the other financial institutions the Caisses Desjardins do not always write down the nominal interest rate on their loan contracts The Caisses Desjardins often have the equivalent interest rate on their loan contracts instead of the nominal interest rate 66 ANNUI T Plus 8 0 In reality except when they are obliged by the law to display the nominal interest rate on their loan contracts the Caisses Desjardins usually prefer to disclose the equivalent interest rate because they consider this rate more representative Thus on their mortgage contracts they always put the nominal interest rate since the law obliges them to do so For other loan contracts most of the time they write down the equivalent interest rate In the data entry window it is important to enter the interest rate written on the contract in the right field You must be careful not to enter the equivalent interest rate in the nominal interest rate field Once the interest rate is entered ANNUI T automatically calculates the other interest rates of the data entry window Of course it is not always easy to determine if the interest rate written on the contract is the nominal interest rate or the equivalent interest rate In
68. ese circumstances the interest amount for the last period is adjusted accordingly However this option becomes non effective as soon as you modify the schedule 21 ANNUI T Plus 8 0 BEGINNING OF PERIOD PAYMENT This option is related to loans and leases only With this option the first payment is made at the date of the beginning of the contract usually the very same day of the contract signing Therefore there is no interest owed on the first period The total amount of the disbursement is considered as a repayment of principal Most of the lease contracts follow this methodology This is why for a lease ANNUI T sets this assumption as the default but you are free to change it Of course for loan contracts ANNUI T assumes that the payment is to be made at the end of the period but once again you can select Beginning of period payment ADJUSTED PAYMENT As with the initial amount it is possible to modify the calculated payment amount from the start This kind of adjustment is sometimes necessary to fit the lender s payment calculation because financial institutions often use rounded amounts This option has some other practical advantages For example imagine that you would like to generate a future amortization schedule for a Canadian mortgage with fixed payment due on the 10 day of each month You do not know the initial amount nor the number of periods for amortization However you do know that the interest rat
69. ets the end of the month option COMPOUNDING FREQUENCY This represents the number of times the interest is theoretically supposed to be calculated at regular intervals and added to the principal The frequencies allowed are the same as for the payment frequency but you can also choose Daily and Canadian mortgage The Canadian mortgage option is there to help those who are not familiar with financial concepts because it is nothing more than a semi annual compounding frequency which in Canada is Federal law for mortgages 16 ANNUI T Plus 8 0 As far as personal loans are concerned the compounding frequency is usually the same as the payment frequency NOMINAL ANNUAL INTEREST RATE This rate is the one that financial institutions display and usually state in the contract The nominal interest rate never considers the compounding frequency EFFECTIVE INTEREST RATE This is the real annual interest rate since it takes into account the compounding frequency of interest The higher the frequency is the higher the effective interest rate becomes For example a nominal interest rate of 10 compounded monthly means that the effective interest rate is 10 47 Calculations are as follows 1 10 12 12 1 10 47 Effective interest rate 1 nr c c 1 Where nr nominal interest rate c compounding frequency PERIODIC INTEREST RATE This interest rate is also called the interest factor Th
70. f the scenario does not exceed 1305 periods 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Tool Help INIT AMOUNT PER PMT YR COMP YR NOMINAL PAYMENT CET 11 250000 739203 Basis of 360 Days year 1st payment 02 18 2010 Maturity date Fe nal Interest Payment Principal 03 18 2012 667 17 7 025 47 11 250000 04 18 2012 673 43 6 352 04 11 250000 05 18 2012 679 74 5 672 30 11 250000 06 18 2012 686 11 4 986 19 11 250000 07 18 2012 C oo 46 75 5 032 94 11 250000 08 18 2012 47 18 5 080 12 11 250000 09 18 2012 691 66 4 388 46 11 250000 10 18 2012 698 15 3 690 31 11 250000 __ 11 18 2012 704 69 2 985 62 11 250000 12 18 2012 711 30 2 274 32 11 250000 01 18 2013 717 97 1 556 35 11 250000 02 18 2013 724 70 831 65 11 250000 03 18 2013 731 49 100 16 11 250000 04 18 2013 100 16 0 00 11 250000 Po _ Issue date Funds advance Adjust Close Modify Extend See Delete modifications Sum Print Data ty Fixed payment loan eee Others E Example of Extend Mo Moma Figure 4 12 Example of a scenario extension 39 ANNUI T Plus 8 0 Figure 4 12 illustrates an example of a scenario extension In this case originally the loan was amortized over 36 months As you can see 2 skipped payments occurred on the 30 and the 31 periods To avoid the balloon payment the lender has agreed to extend the duration of the loan to 39 periods 40 ANNUI T Plus 8 0 SEE DELETE MODIFIC
71. fication the program displays a case 4 conflict Figure 4 24 illustrates the amortization schedule after the confirmation of the new modification As we can see the existing modification is now divided into 2 modifications The first one from January 1 to February 1 2011 and the second one from May 1 to November 1 2011 54 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help Loan Lease Future val What if Penalty NPY IRR Retirement Quit Annual results INIT AMOUNT PER PMT YRCOMP YR NOMINAL REMITTANCE 12 000000 Basis of 366 Days year Istpayment __05 01 2010 Maturity date eut Sas Interest Payment Principal 11 01 2010 2 100 73 1 500 00 57 442 81 12 000000 12 01 2010 2 066 56 1 500 00 55 942 81 12 000000 01 01 2011 2 570 16 2 000 00 53 942 81 12 000000 02 01 2011 2 549 77 2 000 00 51 942 81 12 000000 03 01 2011 478 16 52 420 97 12 000000 04 01 2011 0 00 534 26 52 955 23 12 000000 05 01 2011 2 522 30 2 000 00 50 955 23 12 000000 06 01 2011 2 519 32 2 000 00 48 955 23 12 000000 07 01 2011 2 482 85 2 000 00 46 955 23 12 000000 08 01 2011 2 478 56 2 000 00 44 955 23 12 000000 09 01 2011 2 458 17 2 000 00 42 955 23 12 000000 10 01 2011 2 423 67 2 000 00 40 955 23 12 000000 11 01 2011 2 417 41 2 000 00 38 955 23 12 000000 _ 01 41 884 22 1 500 00 37 455 23 12 000000 y gt _ Issue date Funds advance Adjust Close Modify Extend See Delete modificat
72. flows Compounding frequency Total number of cash flows Nominal interest rate discount rate Date of the net present value period 0 Net present value Nominal IRR Effective IRR Periodic IRR Margie Net present value and intemal rate of retum tema Others EEE Project 1 M ES Figure 7 01 Example of the data entry window to calculate the N P V and the I R R In the data entry window you have to indicate the cash flow frequency the compounding frequency and the total number of cash flows maximum 1 305 Next you have to enter the nominal interest rate for discounting and the date to calculate the net present value which is often the date of the first investment disbursement 81 ANNUI T Plus 8 0 Once you have filled in the data you must select Cash flows to enter the cash inflows and the cash outflows The program then displays the cash flows window 3 ANNUI T Plus 8 0 BEA Fie Activity Function 0 Ropert worksheet Tool ha Frequency of cash flows Net present value NP Compounding frequency Nominal R A Total number of cashflows y Effective R R Nominal interest rate discount rate Periodicl R R Date of the net present value period 0 Cash flow Discount rate Description 01 15 2012 10 0000 Acquisition of new equipment 07 15 2012 25 000 00 10 0000 Savings for this semester 01 15 2013 25 000 00 10 0000 Savings for this semester 07 15 2013 22 000 00 10 0000 Savings for this
73. frequent to have an invoice containing several amounts to register in different GL accounts Note that there is always a Miscellaneous column Moreover when there is an amount in the Miscellaneous column you can click in the next column to select a GL account that is not already used for a column see figure 12 06 In these circumstances in the last part of the screen the program automatically displays additional columns to reclassify by GL account all the amounts of the Miscellaneous column For this reason in the Accounts tab it is important to enter all the GL accounts that ou might use in your Cash Disbursements Journal gt ANNUI T Plus 8 0 File Activity Function Ea Worksheet Tool y ax 30 car Office equipment Computer equipment Advances director GST or HST credit QST credit Raw material purchases Per km allowance Other travel expenses Communications Shipping charges Entertainment expenses Repair and maintenance Office supplies Miscellaneous To edit a field position the cursor on this field and press F2 Combine Erase selected line Erase empty lines Add new line Insert line Close Cash disbursements journal ee Exemples RAEG J Brown expense account 03 2012 TF ae Figure 12 08 Accounts tab of the Cash Disbursements Journal 119 ANNUI T Plus 8 0 In the case of a per kilometer allowance the procedure is slightly different First of all in the
74. from the GL Entries menu and then select the export file Each file is identified by a batch number For most of the accounting programs in the GL you will notice that an ANNUI T entry has a batch number reference ex ANNUI T 126 Once you click on Open all the journal entries are displayed When you click on Reverse all debit amounts become credit amounts and vice versa Finally you just have to select Export again and import this new batch of journal entries into your accounting software to void the previous posting 128 ANNUI T Plus 8 0 129
75. ftware for lease contract classification happens with the fourth criterion In fact for this criterion the accountant has to establish if the lessor is assured of recovering his investment plus an earning on his investment with the lease agreement The answer will be Yes if the present value of the minimum lease payments based on the definition contained in CICA Handbook section 3065 excluding executory costs represent 90 or more of the leased asset fair market value at the beginning of the lease contract The program calculates the implicit interest rate of the lease contract but you are allowed to modify this rate Concerning the incremental borrowing rate of the lessee if this rate is unknown you have to leave this box blank or enter 0 When this field contains a rate that is lower than the implicit interest rate the borrowing rate of the lessee is then the one to use as the discount rate to calculate the present value of the minimum lease payments Worksheet for lease contract classification Criteria 1 and 2 Criterion 3 Criterion 4 Conclusion Required information for criterion 4 Fair value of the leased asset 53 000 00 4 Implicit rate computed bythe lessor 11 250000 Incremental borrowing rate ofthe lessee if unknown enter 0 8 000000 lfthis rate is less than then implicit rate of the lease this rate is used to calculate the present value for criterion 4 To compute the presen
76. he file will be saved Then you must enter the file name and its format of saving PDF Excel Word etc SEE SCHEDULE This option lets you visualize the schedule for example a loan amortization schedule Note that this window gives you access to several other functions see section Schedule window CALENDAR While entering a date it is possible to consult the calendar by clicking on this icon or by pressing on ALT D Moving through the calendar can be done with the arrow keys or with the mouse To quit simply press ESC You can automatically enter the desired date from the calendar by double clicking on this date or by positioning the cursor on the date and pressing ENTER NEW Select this function to quit the active scenario and create a new one of the same type Note that in this case all schedule modifications skipped payment change of interest rate etc will be deleted First ANNUI T always asks you if the active scenario has to be saved or not Then the program asks you if you wish to keep the entered data in the data entry window or erase it ANNUI T Plus 8 0 OPEN List of Directories fm CA a ANNUET_Plus_8 gt Examples i iti A Figure 3 03 Open file window Select this procedure to activate a saved scenario on a hard disk or on another device The default is the active hard disk but you can always select another disk from the List of drives Then you must i
77. he purpose of analysis let us assume that John accepts to pay the penalty of 11 414 70 and refinances the actual balance at 9 5 for a 3 year term To facilitate the comparison let us suppose that John decides to continue to pay the same amount of payment 1 417 47 in order to reimburse the principal more quickly After 36 payments the new mortgage balance would be 96 168 25 which is 15 079 64 less compared to the balance that he would have if he kept the actual conditions of the previous contract instead of paying the 11 414 70 penalty In reality the amount of penalty that the bank receives today has a future value of 15 079 56 in 36 months if the interest rate used is the periodic interest rate which is the one established with the nominal interest rate of 9 5 In other words if the bank invests 11 414 70 for 36 months at an interest rate of 9 5 compounded twice a year the financial institution will end up receiving 15 079 56 Consequently whether John breaches his contract or not the return on investment for the bank remains the same This future value is calculated as follows Penalty x 1 Periodic interest rate 36 Future value Or 11 414 70 x 1 0077643832 1 36 15 079 56 As you can see the method used to calculate the penalty based on the interest rate differential is still logical and fair since the lender does not make any supplementary gain unless he could lend this amount of money at a higher interest ra
78. in year basis For more details please refer to Caisses Desjardins loans in the section Miscellaneous Fortunately in any case ANNUI T always proposes the proper days in year basis but you are allowed to choose another basis If so the program will display a warning message on your selection before it lets you continue Therefore if the normal schedule before any modification is different from the one produced by the financial institution you simply have to try another days in year basis 19 ANNUI T Plus 8 0 If the interest calculation method is based on 360 days in year and the payment frequency is not respected skipped payment etc the results might be different from those of the lender In these circumstances the method used to calculate interest often depends on the lender s policies With ANNUI T this does not cause any problem because in any case you can always modify the loan balance or the interest amount with the Adjust function Even if the difference in calculation is usually minor it is always preferable to adjust the results to those of the lender PAYMENT This is the amount to pay periodically This must exclude any kind of fixed charges such as insurance premiums In the data entry window a pop up list allows you to indicate the kind of payment non applicable for fixed principal payment loan The choices are Normal Skip payment series Dollar step payment series
79. ing modification 48 ANNUI T Plus 8 0 A case 2 conflict occurs when the new modification completely overlaps another modification forcing the deletion of the existing modification The following illustrates a case 2 conflict New modification A Existing modification When the new modification overlaps the end of another modification a case 3 conflict is displayed If you continue the creation of the new modification the existing modification will be shortened to end at the regular date preceding the beginning of the new modification The following represents a case 3 conflict New modification PA Existing modification Finally a case 4 conflict occurs when the new modification is in the interval of an existing modification If you continue the creation of the new modification the existing modification will then be replaced by 2 modifications one preceding the new modification and the other one following the new modification The following illustrates a case 4 conflict New modification rr Existing modification Note that when a new modification is introduced at an irregular date a date being different from the normal date of payment according to the payment frequency within the interval of another modification starting at a regular date there is no conflict since no regular period is affected However if the new modification starts at a regular date and overlaps a modification at an irregular
80. ing on Directories and Add Once the selection is done click on Continue 45 ANNUI T Plus 8 0 COMBINE SUMMARY AND COMBINE DETAILED These functions allow you to compile the consolidated results of a group of scenarios These kinds of reports are often useful for financial projections such as budgets Six 6 frequencies are possible semi annual quarterly monthly every 13 weeks every 4 weeks and weekly For the report you can choose a duration of 1 to 10 years The results can be presented in 2 different forms First there is the summary report Combine summary 3 ANNUI T Plus 8 0 EEK Function Combine summary report Annual results Directory C ANNUI T_Plus_8 Examples Type of scenario Loan Ended 12 31 2011 02 29 2012 03 31 2012 04 30 2012 05 31 2012 06 30 2012 07 31 2012 08 31 2012 09 30 2012 10 31 2012 11 30 2012 12 31 2012 01 31 2013 02 28 2013 03 31 2013 04 30 2013 1 01 31 2012 1 228 83 1 205 64 1 156 88 1 161 30 1 126 21 1 116 58 1 081 81 1 071 46 1 048 73 1 014 47 1 003 01 969 06 956 86 934 50 880 69 887 68 Payment 4 218 87 4 209 44 4 174 54 4 192 92 4171 88 4176 41 4 155 89 4 159 89 4 151 63 4 131 92 4135 11 4 115 93 4 118 60 4111 22 4 072 49 4 094 66 Principal 2 990 04 3 003 80 3 017 66 3 031 62 3 045 67 3 059 83 3 074 08 3 088 43 3 102 90 3 117 45 3 132 10 3 146 87 3 161 74 3 176 72
81. inment expenses 50 of eligible taxes Expense for posting 1 000 0 1 074 88 GST credit for posting QST credit for posting Figure 12 01 Example of the sales taxes calculation tool ANNUI T Plus contains a tool to calculate sales taxes for any Canadian province This window has two tabs since it offers two types of calculation The first one is used to calculate the sales taxes included in a disbursement This is useful when you do not have a detailed invoice restaurant receipt parking taxi etc 112 ANNUI T Plus 8 0 When you select the province the program displays the GST rate and the provincial sale tax PST usually in effect in this province You are allowed to modify these rates and to specify if a tax is refundable or not for the enterprise Then you have to enter the total amount of the disbursement and if applicable the amount of tip or any other non taxable amount included ANNUI T then calculates the amount before taxes and the sales taxes Note that you can modify the amount before the sales taxes and the amount of GST included The program also displays different amounts to register in the GL entries There is even a section for the fiscal treatment of entertainment expenses Remember that in the case of entertainment expenses you can claim only 50 of the refundable sales taxes the remaining sales taxes are usually added to the expense amount The functionality in the second tab is similar to the firs
82. interest calculation method is fundamentally similar to those of the other financial institutions as we can see there are some differences in the way they proceed to calculate interest Indeed not only do they use a 365 25 days in year basis and an equivalent interest rate for most of their loans they also have other differences from the other financial institutions Nevertheless as mentioned before the purpose of this manual is not to elaborate on the concepts of their method Just remember that the Caisses Desjardins option of the ANNUI T program allows you to calculate interest according to their policies even when an irregularity occurs skipped payment interest rate change etc 68 ANNUI T Plus 8 0 5 FUTURE VALUE This function is used to process term deposits trust funds loans repayable by a single payment etc It allows you to establish the balance the accumulated interest and the accrued interest at any given date When you select this function a screen is displayed to let you choose the type of interest calculation because the program offers 4 different options to calculate the future value 1 Simple interest on a periodical basis With this option the interest is updated at every period but never capitalized since it is simple interest This calculation method assumes that every period has the same importance even if in reality the number of days could vary from one period to another For th
83. ions Sum Print Data Fixed principal payment loan Directoy Others scenario Example of modifications g Normal Figure 4 24 Schedule after the case 4 conflict ZZZZZZZZZZZ Finally in addition to the 4 conflict cases caused by overlapping modifications there is one last case of conflict This occurs when you create or delete a change in the schedule at a date preceding a closure of the scenario A change here means a modification skipped payment etc as well as a supplementary funds advance or a funds withdrawal in the case of an investment annuity In other words if you want to make this kind of change in the schedule and there is a closure in effect the program displays a case 5 conflict This means that if you continue the closure will be deleted Consequently if you want to enter several changes in the schedule with one being a closure of the scenario you must always proceed with the closure last Since it is possible to combine a closure with an existing modification when a case 5 conflict occurs only the closure will be deleted 55 ANNUI T Plus 8 0 COMBINATIONS OF MODIFICATIONS As mentioned previously in the section Modification conflicts when you introduce a modification that overlaps an existing modification of the same type the program displays the list of conflicts For example if you want to register a skipped payment in the interval of a payment modifica
84. ir value Conclusion From the lessee point of view since the lease meets atleast one of the 4 basic criteria it seems thatthis lease should be considered as a capital lease However you should consult CICA Handbook section 3065 for the final classification of this lease Figure 11 05 Example of the conclusion in the lease contract analysis worksheet If the analysis must be done from the lessor point of view the same criteria apply However for the 4 criterion the calculation of the minimum lease payments present value as requested by the CICA Handbook the lease implicit interest rate is used as the discount rate Furthermore when the analysis is performed from the lessor point of view 2 other questions have to be answered First you have to indicate if whether or not the lease includes abnormal risks Secondly you must indicate if the lease contract includes other estimable costs that will occur after the year end 102 ANNUI T Plus 8 0 If one or more of the 4 basic criteria are met and that you have answered No to the 2 questions then the lease should be considered as a capital lease if not as an operating lease However once again you should verify with CICA Handbook section 3065 for the final conclusion on the classification of the lease 103 ANNUI T Plus 8 0 LONG TERM DEBT PRESENTATION This module helps you determine the amount to be displayed for current liabilities and the am
85. is lower than the interest rate of the contract For illustration purposes let us take the case of John who signed 2 years ago a mortgage contract of 120 000 00 bearing interest at 13 5 amortized over 20 years and repayable by monthly payments of 1 417 47 Initially for peace of mind in a fluctuating financial market he chose a 5 year term because shorter term interest rates were rising constantly Today at the bank after having made his 24 payment John realizes that the interest rate for a one year term mortgage is now 8 and for a 3 to 5 year term 9 5 Knowing that his balance is now 117 164 62 he wonders what would be the impact of refinancing his mortgage loan at 9 5 for a 3 year term and amortizing this amount on the remaining duration which is 216 months 240 24 With his financial calculator John finds out that based on these new conditions his monthly payment would be 1 120 51 which represents a monthly savings of 296 96 or 10 690 56 over the remaining duration of the present term 36 months In addition the balance at maturity would be less by an amount of 2 800 04 Consequently over 3 years the total savings would be 13 490 60 Of course John is aware that to refinance his mortgage he will have to pay a penalty He believes that this amount will probably be the equivalent of 3 payments which is 4 252 41 3 x 1 417 47 Under these conditions without a doubt this will be advantageous He then
86. is reason theoretically the amount of periodical interest always remains the same For example if an amount of 10 000 00 bears interest at 12 per year calculated monthly regardless of the real elapsed number of days since the last interest calculation the amount of interest per month will always be 100 00 established as follows 10 000 00 x 12 12 Interest on term deposits is often calculated this way 2 Compounded interest on a periodical basis With this option the interest is capitalized at every period and calculated on the preceding balance which includes the accumulated interest As opposed to simple interest the amount of periodical interest increases from one period to another The formula for calculating the accumulated interest is as follows a x 1 nr c p a where a Initial amount nr Nominal interest rate c Compounding frequency p Number of periods elapsed since the beginning 69 ANNUI T Plus 8 0 3 Simple interest on a daily basis In this case the simple interest is calculated according to the real number of days elapsed since the beginning in proportion to a 365 days per year Thus the formula is expressed as follows Initial amount x Interest rate x Number of elapsed days 365 This interest calculation method is commonly used for trust funds and for some loans negotiated between individuals 4 Compounded interest on a daily basis With this option
87. ital lease or as an operating lease However because there are so many possible situations and also other factors to consider you should always consult CICA Handbook section 3065 for the final classification of a lease contract This analysis is done for the e Lessee C Lessor r Criterion 1 The lease contract transfert ownership to the lessee during the lease term C Yes No r Criterion 2 Does the lease contain a bargain purchase option Close Figure 11 02 Example of criteria 1 and 2 in the lease contract analysis worksheet 99 ANNUI T Plus 8 0 For the first criterion you have to indicate if a transfer of ownership is highly anticipated by the end of the lease term Note that the contract does not have to contain an explicit transfer of property to the lessee In fact if there is reasonable assurance based on certain contract conditions that the lessee will obtain ownership of the leased asset you must answer Yes to this question For the second criterion you have to establish if the lease contract includes a bargain purchase option In other words the answer must be Yes when the amount of the option is so low compared to the fair value at the option date that the purchase is reasonably assured The third criterion is used to verify if the duration of the lease based on the definition of the CICA Handbook section 3065 is long enough to give substantially to the lessee all the economi
88. l date of payment according to the payment frequency 36 ANNUI T Plus 8 0 Let us take the case of a loan with payment to be made on the first day of each month If a late payment occurs for example in the middle of a month then the date is considered to be an irregular date because the day of transaction differs from the normal day of payment As mentioned before the Modify function allows you to make 2 types of modifications First there are modifications related to the payment where you can change the amount choose an interest only payment or a principal only payment You can also select a skipped payment with or without updating the interest Note that a skipped payment without updating the interest means that for this transaction date the interest calculation is simply postponed to the next transaction date A skipped payment without updating the interest is mainly used in the case of a late payment because some lenders postpone interest calculation to the next payment date instead of capitalizing the interest This way the interest of the next date is calculated on the number of elapsed days since the last interest calculation For most of the financial institutions the date of a skipped payment without an update of the interest does not appear on the statement Nevertheless ANNUI T always displays such event in order to highlight it The second type of modification that the Modify function allows you to mak
89. le one month 1 12 one week 1 52 etc even if in reality the number of days can be different from one period to another As long as the payment frequency is respected the interest is obtained by multiplying the previous balance by the periodic interest rate This rate always remains the same for every period However for odd periods irregular number of days for example a late payment interest is not calculated the same way In fact for odd periods interest is calculated as follows Previous balance x NR x DE DY Where NR Nominal interest rate DE Number of days elapsed since last calculation date DY Days in year basis 360 or 364 or 365 As you can see in the United States the days in year basis simply represents the denominator to be used in interest calculation for odd periods In Canada the days in year basis is used to identify the interest calculation method These Canadian methods can differ a lot from one to another depending on the days in year basis selected For more details please refer to the manual 91 ANNUI T Plus 8 0 US Rule During normal circumstances this method is similar to the Normal method In other words the same mathematical formulas are applied However when a payment is insufficient to cover the interest to be paid late interest must be held in a separate balance With US Rule no interest must be charged on late interest Late payments are always a
90. loans leases and investments the software calculate implicit rates nominal and effective Therefore when the interest rate changes this new function permits you to calculate the combined rate For example in Canada this is useful for accountants to display in the financial statements effective rate for financial instruments according to CICA Handbook section 3860 Note that this function is also available in the Combine Summary report Notice that you have to position the cursor on the line representing the starting point of the addition before clicking on Sum Then you can define the desired interval of calculation by highlighting with either the mouse the arrow keys PAGE UP PAGE DOWN HOME or END 3 ANNUI T Plus 8 0 DER File Activity Function Report Worksheet Tool Help Ranae Period 33 09 15 2013 to period 40 04 15 2014 Interest Implicit rate Payment 7 Principal Tire Nominal 7 737100 Effective 7 8867 00 e oil Advance Interest Payment Principal Interest rate 31107 15 2013 3 i 95 757 21 7 000000 32 08 15 2013 E 95 607 40 7 000000 33 09 15 2013 95 456 72 7 000000 34 10 15 2013 i 95 305 17 7 000000 35 11 15 2013 4 3 95 152 76 7 000000 36 12 15 2013 E 94 999 47 8 500000 37 01 15 2014 gt 3 94 873 33 8 500000 38 02 15 2014 E A 94 746 30 8 500000 39 03 15 2014 3 618 8 500000 40 04 15 2014 41 05 15 2014 94 359 89 8 500000 42 06 15 2014
91. maturity date is postponed you must select Extend and enter the number of additional periods The Modify function allowed you to change the interest rate for one or more periods When a schedule is displayed it is also possible to obtain the sum of the interest for any given interval 73 ANNUI T Plus 8 0 To see the annual results just click on the Annual results tab By default the annual results are calculated and presented on the basis of the financial year end but you can enter any other desired date by clicking on Change date Notice that the annual results do not take the accrued interest into account However as explained previously it is always possible to calculate this amount by entering the calculation date for the accrued interest in the field Other date for interest and balance calculation Finally remember that you can select reports such as Combine summary Combine detailed and Accrued interest for future value scenarios 74 ANNUI T Plus 8 0 6 PENALTY CALCULATION BASED ON THE INTEREST RATE DIFFERENTIAL This function allows you to calculate the net present value of the interest rate differential commonly called the I R D Most of the time this procedure is used to establish the amount of penalty to be paid when a borrower refinances or prepays the balance of his mortgage before the end of the contract This happens when the current interest rate
92. monthly contribution will be 316 23 which would provide a retirement capital of 303 050 63 This scenario is the one illustrated on the preceding page With ANNUI T it is so easy to answer these kinds of questions Notice that in this example the income tax rate is 0 However when you plan to pay the income tax on the interest income with these funds you must enter an income tax rate For example if during the contribution period the estimated interest rate is 6 and the income tax rate is 50 the program will produce the schedule using 3 as the real interest rate As for annuities when you select Calculate there has to be no more than 1 unknown value in each of the 2 sections contributions and withdrawals Nevertheless in the contributions section the field Initial capital is optional If this field is the only one to be equal to 0 ANNUI T assumes that this is the unknown value to calculate for the contribution section If another field is unknown the program then supposes that there is no initial capital and calculates the other value Notice that the field Available capital at retirement is between the 2 sections because this value is related to both of them Indeed for the contribution section the capital at retirement represents the future value For the withdrawal section it is the initial amount For this reason when you select Calculate first the program verifies that there i
93. mouse and then press DELETE Another possible way is to press END and then press BACKSPACE until the last desired character is erased Concerning the pop up list there are 2 methods to view the multiple choices and select a value The first one is to press UP and DOWN The second method is to click on the scroll arrow to open the list and then click on the desired value to be entered In either case you can move to the next field with ENTER or TAB In some cases you can also enter a numerical value directly in the field For example in the pop up list for the payment frequency you can type 1 for annual 12 for monthly etc To enter a date you must follow the mm dd yyyy format but you can also use the pop up calendar as explained in the section Calendar Functions can be accessed from the menus activated by the ALT key or with the mouse Therefore except for some functions like the financial year end modification and the change of language all menu selections are iconized and can be activated with the mouse to save time Note that often in an icon description there is an underlined letter This is to indicate that the icon can be activated by pressing on ALT the underlined letter In the File menu the name of the twenty most recent used files are displayed at the end This way it is faster to find and open any recent file In the schedule many shortcuts are available For example to adjust an interest amount si
94. mply double click on the field you wish to modify and a window will appear to allow you to enter the new amount Similar shortcuts exist to adjust the balance modify the payment change the interest rate etc The Preferences menu allows you to register default parameters Name of the person or the firm to print on reports Directory to save files Language English or French Country Canada or USA for calculation methods Business year end for new scenario Sales taxes parameters for leases Accounting software This applies when you import ANNUI T GL entries to an accounting program Finally help is available for each field of the data entry window by selecting the desired field and pressing F1 Help is also available for each function of the software ANNUI T Plus 8 0 CALCULATE Once all the necessary data is entered you have to select Calculate to start calculations In the case of annuities the Calculate function serves to determine the unknown value number of periods for amortization interest rate payment etc For an annuity no more than one value should be missing If all values are entered the program then checks the exactitude of the payment amount to be sure that the scenario makes sense If the unknown value to be calculated is the initial amount or the payment you can modify the obtained computed result as explained in sections Adjusted initial amount and
95. n interest only payment because it is impossible to affect the balance with this kind of payment In this case you have to adjust the balance on the previous date The same rule applies for a date of an ignored transaction skipped payment without updating the interest Once again the adjustment should be done at the previous date Finally the adjustment procedure is not allowed at the closing date of a scenario except with the Close function 32 ANNUI T Plus 8 0 CLOSE 2 ANNUI T Plus 8 0 File Activity Function Report Role EX Lease LA ha LE BE Tool Quit Closure INIT AMOUNT 64 000 00 Istpayment Refinancing Type of closure Ifthe closure is considered as a refinancing the final payment is ignored since this affectation of the cash flow is e E 3 is ia not real Nevertheless the scenario ends atthe closing date Actual situation atthe closing date Interest rate 0915201 ES DIE INTEREST PAYMENT PRINCIPAL BALANCE EE 40 15 2014 1401 15 2012 416 26 1 344 12 927 86 51 652 79 9 500000 11 15 2018 L__15102 15 2012 408 92 1 344 12 935 20 50 717 59 g 500000 12 15 201 9 500000 01 15 201 Closure data 9 500000 5 02 15 201 CLOSING CLONE 9 500000 03 15 201 PER DATE INTEREST PAYMENT PRINCIPAL BALANCE 9 500000 oasa L 13025 2072 408 92 51 6527 ooo 9 500000 05 15 201 9 500000 06 15 201 9 500000 07 15 201 Corine Cana 3 500000 08 15 201 9 500000 09 15 2012 1 344 12 960 9 5000
96. n of the new rate is unknown it is preferable to select Modification to the end of the scenario Note that even if you know the time during which the new interest rate applies it is still better to select Modification to the end of the scenario instead of calculating the number of periods of the real duration In fact if you proceed this way at the next interest rate modification the program will display a case 3 conflict which means that the existing modification will be shortened in order to provide space for the new interest rate change 59 ANNUI T Plus 8 0 INTEREST RATE MODIFICATION FOR A FIXED PAYMENT SCENARIO Generally for a fixed payment scenario the interest rate remains the same for the entire term of the contract For example in the case of a closed mortgage the borrower must choose a term during which the interest rate will be fixed This rate depends on the chosen term Usually financial institutions offer terms that could vary between 6 months and 10 years Most of the time the amortization period is longer than the duration of the term Consequently at maturity of the contract the balance must be paid off or refinanced over a new period of time Unless the interest rate stays exactly the same as in the previous contract the lender must establish a new periodical payment However sometimes by paying a penalty the borrower is permitted to refinance the loan at a lower interest rate before the
97. n the schedule occurs on Sunday the user could change this journal entry date to enter the date of the next working day This kind of modification is sometimes necessary when there is an impact in the financial statements As for the description of a journal entry ANNUI T Plus always enters the name of the scenario to give the user a reference However the user is allowed to modify this description 127 ANNUI T Plus 8 0 To create the export file you simply have to click on Export Depending on the chosen accounting software another window is sometimes displayed to enter supplementary information for the export procedure ex fiscal period currency code etc If you click more than once on Export the program saves a new file with the same name but the number following the name is increased the most recent file having the highest number This situation happens for example when the user clicks on Export and then realizes that he has to make some changes Because it is normal to make errors ANNUI T Plus even allows you to reverse a batch of journal entries Therefore if you ever import such entries into your accounting software and some of them contain errors the best way to correct the situation is often to reverse all of them Then you can make the necessary corrections and export a new batch With ANNUI T to reverse a batch of journal entries you must select Open a file of exported GL entries
98. nce the type of loan is selected you have to specify if the interest has to be calculated with the method of the Caisses Desjardins or with the method of other Canadian financial institutions For more details refer to Caisses Desjardins loans in the section Miscellaneous LEASE This option is used to handle lease contracts with a buy back option In this kind of scenario the periodical payment is fixed and calculated so that the final payment is equal to the amount of the buy back option ANNUI T also allows you to deal with lease contracts where the leaseholder has to pay as the first lease payment an amount equivalent to 2 payments so that the last lease payment is prepaid the one preceding the buy back option As far as we know ANNUI T is one of few programs to offer this option To choose this last option simply click on Last lease payment prepaid 13 ANNUI T Plus 8 0 INVESTMENT This option allows you to process periodical deposit investments with or without an initial amount With the ANNUI T program the first deposit is recorded on the first period and the scenario always ends one period after the last deposit For example if the duration is 24 months the scenario ends on the 25 period 24 months after the first deposit Note that with a business or a financial calculator you have to select Beginning of period payment for equivalent calculation Otherwise the end result of the calcul
99. nd visualize the schedule of a retirement plan i e scenarios in which a person makes periodical deposits contributions until his retirement and then withdraws funds during a certain number of years As you can see the data entry window of this retirement planning module is similar to the one used for annuities except that there are 2 sections the contributions section and the withdrawals section The maximum duration is 50 years of contributions and 50 years of withdrawals The choices for payment and compounding frequencies are the same as for annuities 84 ANNUI T Plus 8 0 The data entry window allows you to quickly answer all kinds of questions about retirement planning Let us take an example man estimates that he will have to work another 30 years before his retirement Ideally he would like to withdraw 2 000 00 monthly during 20 years after his retirement He actually has 25 000 00 in an R R S P and he is aware that it is always more advantageous to make periodical deposits He now wants to start depositing an amount in this fund every month He wonders what will be the necessary amount of monthly contribution in order to realize his objective if the annual interest rate compounded monthly is 4 during the contributions period and 5 during the withdrawals period Finally he is not planning to pay the income taxes on the R R S P withdrawals with these funds Answer Based on these hypotheses the required
100. ndicate the directory that contains the file to be opened The directory can be entered directly in the Path field or you can select it from the list of directories by double clicking on it If the directory has a recorded description it will be displayed ANNUI T Plus 8 0 Note that when you save a scenario you can document the directory with a brief description of its content so that you can trace down and retrieve files more easily later For example the directory could be your customer s name useful when the customer has many scenarios saved Next you have to enter the name of the scenario Again when retrieving a file the specific file name can be entered directly in the Scenario field or you can double click on the file name in the list You can also select Details to consult the file description before retrieving it Finally you have to click on Open to retrieve the scenario Note that if you wish to open a scenario of a different type for example if you are in a loan and now want to open a lease scenario you must then select Open from the File menu Moreover in the File menu the name of the twenty most recent files used are displayed at the end This way it is faster to find and open any recent file SAVE This function allows you to save a scenario By default the program assumes that the file will be saved on the running hard disk Otherwise you have to select the proper di
101. o be changed click on Modify and enter the desired amount For example this could be useful when the lender has estimated a different amount of accrued interest at the same date and you want to use his estimate 96 ANNUI T Plus 8 0 g ANNUI T Plus 8 0 File Function ACCRUED INTEREST AS OF 12 31 2012 as nn An mortgage 100 000 00 7 000 PMT 700 42 Truck 1 72 500 00 7 250 PMT 1 444 15 Truck 2 60 000 00 9 750 FPR 1 000 00 Truck 3 64 000 00 9 500 PMT 1 344 12 Directory CAANNUI T_Plus_8 iExamples Type of scenario Loan To restore an overwritten field select this field and press Fo Figure 4 18 Example of the Accrued interest report 97 Total ANNUI T Plus 8 0 5 YEAR REPAYMENTS This function is used to generate the report of the principal repayments of the next 5 financial years This kind of report is mostly used by accountants because it allows them to obtain the results for the note on the long term debt in the financial statement For each selected loan in the first column there is a brief description In the 5 following columns you have the principal repayments of each of the selected 5 years As usual these amounts are rounded off to the nearest whole number 3 ANNUI T Plus 8 0 File Function 12 31 2013 12 31 2014 12 31 2015 12 31 2016 8 338 9 143 1 783 1 910 2 046 14 166 15 228 16 370 12 000 12 000 12 000 12 787 14 056 14 106 Total Di
102. ount for long term liabilities in the balance sheet based on the accounting recommendations of the Emerging Issues Committee EIC 122 These rules are effective for fiscal years beginning on or after January 1 2002 In this worksheet there is one line for each selected loan A brief description of the loan is written in the first column In the second column the maturity date or the end of term date is displayed according to which date comes first The balance of the loan at year end appears in the third column The 3 following columns represent factors to consider when establishing the amount of the loan balance that has to be presented in the current liabilities Z ANNUI T Plus 8 0 File Function Truck 1 72 500 00 7 250 PMT 1 444 15 03 18 2016 Truck 2 60 000 00 9 750 FPR 1 000 00 04 01 2016 Truck3 64 000 00 9 500 PMT 1 344 12 11 15 2015 262 016 To restore an overwritten field select this field and press F Figure 11 06 Long term debt presentation window first part 104 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 File Function in LONG TER liabilities 100 000 00 7 Truck1 72 500 00 7 250 PMT 1 444 15 Truck 2 60 000 00 9 750 FPR 1 000 00 _ Truck 3 64 000 00 9 500 PMT 1 344 12 Total 8 Examples RER Schedule Sort Add Remove Print Close To restore an overwritten field select this field and press F8 Figure 11 07 Long term debt presen
103. owing Equivalent Duration Loan interest in fraction balance x rate Xx of year Interest It is not the purpose of the present manual to elaborate on the concepts of their method Let us simply say that this method to calculate the interest gives the same results as the conventional method balance multiplied by the periodic interest rate since it is exactly the same formula but expressed differently Indeed by multiplying the equivalent interest rate by the duration in fraction of year you obtain the periodic interest rate In other words the equivalent interest rate represents in some way the periodic interest rate expressed on an annual basis As explained previously when the interest calculation is based on 365 25 days per year and the number of elapsed days vary from one period to another the periodic interest rate and the equivalent interest rate have to be determined at every period Further precision should be made Due to the fact that in the interest calculation these interest rates often change You must understand that the periodic interest rate and the equivalent interest rate displayed in the data entry window are not necessarily the rates used in the interest calculation for the amortization schedule In reality it is rather the periodic interest rate used to calculate the payment and the equivalent interest rate established with this periodic interest rate For this reason in the data entry window the equival
104. owing terms and conditions An annual license begins upon initial installation date of the software and ends one year after COPYRIGHT RIGHT OF AUTHOR This program can not be used on more than one computer at the same time except if it is a network version or a corporate license It is strictly prohibited to copy or reproduce in whole or in part this software or the documentation without a written approval of Utilimax Inc Copyright c 2012 by Utilimax Inc All rights reserved Windows is a trademark of Microsoft Corporation INSTALLATION RIGHT If ANNUI T is already installed on a computer and you wish to install this software on another computer you must uninstall ANNUI T from the first computer otherwise the new installation will be denied If a technical problem occurs for example a hard disk crash and the uninstallation procedure becomes impossible to perform you must then call Utilimax in order to reinstall the program DISCLAIMER OF WARRANTY Even though many efforts have been made during the preparation of the ANNUI T software to ensure its accuracy and compatibility this program is provided as is without any warranty of any kind Therefore Utilimax Inc does not give any explicit or implicit guarantee and disclaims any responsibility for damage due to the use of the ANNUI T software Moreover the present manual is subject to change without notice ANNUI T Plus 8 0 2 GENERALITIES INTRODUCTION
105. pdated results at any time To do so you simply have to open the scenario select Modify data enter the desired date in the Other date for interest and balance calculation field and select Calculate When this date is irregular ANNUI T also calculates an amount of accrued interest which is the estimated interest since the last regular date of interest calculation according to the chosen frequency The accrued interest is calculated with a pro rata which is the number of days elapsed since the last interest calculation date in proportion to the number of days between this date and the next interest calculation date Note that when the maturity date is irregular the program executes the same type of calculation except that there is no interest considered as accrued interest since the maturity date remains a real interest calculation date No matter what kind of interest calculation for the future value ANNUI T always provides a schedule To access the schedule you simply have to select See schedule This window displays the detailed results and gives access to many functions Since these functions are similar to the ones described in the Annuity section for more information please refer to this section 72 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Tool Help OLI balali Future val What if Penalty NPY 7 IRR Retirement Annual results AMOUNT PER INT FREQ NOMINAL RA
106. plel ajusted payment g Normal Figure 4 02 Example of an adjusted payment from the start This possibility to modify the payment from the start is also useful in the case of a mortgage with weekly payments established on monthly payments calculation often called accelerated weekly payments Financial institutions offer this option to allow the borrower to reimburse his debt more quickly With this method the lender calculates the monthly payment and simply divides it by 4 to establish the weekly payment Knowing that there is an average of 4 33 weeks per month the calculated amount is over evaluated furthermore the payment frequency is higher 23 ANNUI T Plus 8 0 Figure 4 03 illustrates an example of a mortgage with monthly payments Figure 4 04 illustrates a mortgage with weekly payments where the payment amount is modified to be the equivalent of 25 of the monthly payment 3 ANNUI T Plus 8 0 DER Initial amount Adjusted amount Number of periods Term Frequency of payments Monthly Compounding frequency Semi annual y Nominal annual interest rate 7 500000 Effective interest rate 7 640625 Periodic interest rate 0 615452 oe Days in year 360 00 1st pmt date 06 21 2012 End Year end 12 31 Payment Normal LT 120080 Beginning of period payment yes no Last payment adjusted non 3 aoe 35 peano F effective when the schedule has Adjusted payment been modified Other
107. portant to note that while the program calculates the N P V and the I R R all the lines following the last entered cash flow are erased The purpose is to eliminate the lines that are not effective However if by error you select Calculate before having entered all the cash flows you can always use the Extend function to add additional lines Finally it occurs sometimes that the calculation of the R R causes an error This happens when the scenario does not make sense in other words when it becomes impossible to determine the I R R since the result is too high or too low 83 ANNUI T Plus 8 0 8 RETIREMENT RETIREMENT PLANNING 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Initial capital Total number of contributions Contribution frequency Interest compounding frequency Nominal annual interest rate Contribution starting date Contribution amount Withdrawals period Total number of withdrawals Withdrawal frequency Monthly ne Beginning of period payment yes no Interest compounding frequency Monthly Nominal annual interest rate Withdrawal amount 2 000 00 Contributions end 01 15 2042 Withdrawals end 01 15 2062 Income tax rate Contributions period 0 000 Withdrawals period 0 000 Fetrement planning Directoy e Seri o RON Figure 8 01 Data entry window of the retirement planning module This module allows you to calculate a
108. pplied first to the unpaid interest and the remaining amount to the principal Note that the schedule has more columns when US Rule is selected Rule of 78 Rule of 78 does not represent a real interest calculation method but an estimation method used for allocating interest over time With Rule of 78 first the total amount of interest is pre computed using any valid calculation method Then a denominator has to be determined To do so all periods are added up For example in the case of a loan with 12 monthly payments this calculation is done as follows 1 2 3 4 5 6 7 8 9 10 11 12 78 Finally the first period interest is determined by multiplying the total interest amount by 12 78 the second by 11 78 and so on Let us take the case of a 10 000 00 loan amortized over 24 months bearing interest at 12 Knowing that the monthly payment is 470 73 total interest is calculated as follows 24 x 470 73 10 000 00 1 297 52 The denominator to be used is then 300 1 2 24 For the first period interest would be 103 80 which is 1 297 52 x 24 300 Note that there are many restrictions with Rule of 78 First this method is only applicable for fixed payment scenarios Furthermore special series and modifications are not allowed funds advances withdrawals interest changes etc 92 ANNUI T Plus 8 0 Exact days Whatever the calculation method Normal or US Rule or
109. re on a multiple basis annual semi annual every 4 months quarterly every 2 months and monthly if the compounding frequency is semi annual the default basis is 360 days per year but you can select another basis if you want Finally in all other cases by default the basis is 365 25 days per year but you can select a different basis As explained in the section Days in year with a basis of 365 25 days per year the interest calculation is based on the assumption that every day has the same importance In other words the interest is calculated according to the real number of days elapsed since the last interest calculation For example when the payment frequency is monthly the amount of interest for a month of 31 days is higher than for a month of 30 days in contrast with the 360 days in year basis which assumes that every period has the same importance Note that compared to the 365 days in year basis the 365 25 days in year basis has the advantage to take into account the existence of the leap year that occurs as we know every 4 years Besides with this method the interest amount is slightly lower since the denominator is higher for example 30 days 365 25 lt 30 days 365 However the difference is rather minimal 65 ANNUI T Plus 8 0 To calculate interest the Caisses Desjardins use an annual interest rate that is called the equivalent interest rate Their formula for interest calculation is the foll
110. re value N P V I R R retirement etc The ANNUI T recording procedure assigns a different file extension depending on the type of scenario so that automatic sorting can be done For example when you select Open and Loan the selection window will display loan files only even though in reality it contains other types of scenarios Of course when you save each customer s scenario in a distinct directory you may end up with several directories That is why ANNUI T allows you to save a description of the directory for example the customer s name This description will be displayed each time the directory is selected Ideally you should record this description when you save your first file in the directory but you can modify this information later when you save any other scenario in the directory Once the directory is selected you have to indicate the name of the file to be saved If this file already exists it can be selected from the list Otherwise you must enter the name in the Scenario field You can use up to 80 characters for file names You can also add a description to the scenario in order to make it easier to identify the scenario when retrieving it later on This description is printed on some reports When all this information is entered just click on the Save icon Remember that it is always important to make security copies of your files DELETE This function allows you to delete sc
111. rectory CAANNUI T_Plus_8iExamples Type of scenario Loan Update Schedule Sort Add Remove Print Close To restore an overwritten field select this field and press F8 Figure 4 19 Example of the 5 year repayments report As in the Accrued interest report you can modify any calculated amount To change an amount you have to position the cursor on it and enter the desired amount For example this modification is necessary when a loan matures within the selected 5 years and the total of the repayments exceeds the loan balance in the financial statement because of the rounding off 98 ANNUI T Plus 8 0 5 YEAR LEASE PMT This procedure is used to generate the report of the 5 year minimum payments for a group of leases This report is similar to the 5 year repayments report and the functioning remains the same LEASE CONTRACT CLASSIFICATION This function represents a tool to help you determine the nature of a lease contract based on the criteria defined in the CICA Handbook section 3065 If the analysis has to be done from the lessee point of view leaseholder 4 factors have to be taken into account to determine if the lease contract has to be considered as a Capital lease or as an operating lease Worksheet for lease contract classification Criteria 1 and 2 Criterion 3 Criterion 4 Conclusion IMPORTANT This worksheet is to HELP you establish if a lease contract has to be considered as a Cap
112. returns to the bank After examining the contracts the loan officer confirms that the contract can be breached with the payment of a penalty This penalty would be the highest amount between the equivalent of 3 payments and the net present value of the interest rate differential As explained by the agent the last amount is in fact the net present value of the difference between the interest calculated with the interest rate of the contract and the interest calculated with the current rate for a 3 year term which represents the remaining duration of the contract 75 ANNUI T Plus 8 0 After many questions John still does not understand this last method Nevertheless he lets the loan officer calculate the amount of penalty The result simply stuns John The penalty to breach the present contract would be 11 414 70 Figure 6 01 illustrates the present example With ANNUI T the penalty calculation is very easy to do 3 ANNUI T Plus 8 0 DER Fie Activity Function Report Worksheet Number of periods remaining in the term Frequency of payments Compounding frequency emi annual Modify EURE F Data Nominal interest rate on the current contract New nominal interest rate Days in year Date ofthe last regular payment made Periodical payment Interest calculation method Normal balance atthe end ofthe term Amount due to prepay the loan Interest rate differential value penalty i Os A PER Figure
113. riod the balance increases until it becomes equivalent to the retirement capital During the withdrawals period the balance decreases until the end It is important to note that in this schedule contributions are represented by positive amounts and withdrawals by negative amounts Even if the schedule is similar to the one used for annuities the functioning is a little different First modifications are made directly in the schedule You simply have to position the cursor on the field to modify and enter the desired value For each period you can modify as you wish the contribution amount or the withdrawal amount or the interest rate 86 ANNUI T Plus 8 0 The modifications are normally made to register special events that could occur in the future retirement allowance sale of an asset etc or to analyze the impact of different changes Note that on each line you can also enter a brief description in order to document the modifications and the special events To access this column you can use the right arrow or the scroll arrow If a modification is effective for more than one period it is recommended using the functions Copy and Paste To do so you must begin by registering a first modification and select Copy Then you have to move the cursor on the first line where you want to copy the change and select Paste A screen is then displayed to enter the number of lines to paste In this window you
114. rksheet Tool ko SEE Faure wa EA bal 51 NN Annual results INIT AMOUNT PER PMT YR COMP YR NOMINAL REMITTANCE 60 000 00 12 000000 1 500 00 4 Basis of 366 Days year Ist payment 05 01 2010 Maturity date 08 01 2013 Fin year end December 31 Interest Payment Principal Interest rate 04 01 2010 60 000 00 12 000000 05 01 2010 j 1 091 78 500 00 59 500 00 12 000000 06 01 2010 i 0 00 606 41 60 106 41 12 000000 07 01 2010 5 0 00 592 83 60 699 24 12 000000 08 01 2010 A 0 00 618 63 61 317 87 12 000000 09 01 2010 d 0 00 624 94 61 942 81 12 000000 10 01 2010 3 610 94 3 000 00 58 942 81 12 000000 11 01 2010 E 2 100 73 1 500 00 57 442 81 12 000000 12 01 2010 i 2 066 56 1 500 00 55 942 81 12 000000 01 01 2011 67016 2670460 200000 53 942 81 12 000000 02 01 2011 2 549 77 2 000 00 51 942 81 12 000000 03 01 2011 5 2 478 16 2 000 00 49 942 81 12 000000 04 01 2011 k 2 509 01 2 000 00 47 942 81 12 000000 _ 01 20 2 472 86 45 942 81 12 000000 y i Issue date Funds advance Adjust Close Modify Extend See Delete modifications Sum Print Data Fixed principal payment loan NEC Others ERE Example of modifications g Noma e Figure 4 23 Modification of the fixed principal remittance for 11 months Unfortunately the enterprise has experienced other financial problems and was unable to make the payments of March and April 2011 With ANNUI T once you have entered this new modi
115. rsements journal ese Exemples RAE J Brown expense account 03 2012 E Figure 12 03 Disbursements tab of the Cash Disbursements Journal 116 ANNUI T Plus 8 0 The followings illustrate examples of other columns in the Cash Disbursements Journal 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help 2340 2370 5200 214 98 0 00 03 06 2012 rie ah 03 10 2012 Laser printer box of paper Figure 12 04 3 ANNUI T Plus 8 0 File a Function al ME Worksheet Tool arn Description ex Mr X expenses for June 2007 Y Gle L entries Y Reference ex employee s number J Brown expense account for March 2012 163 Description Communications Office s supplies Shipping cy 5400 03 06 2012 es oa 03 10 2012 Laser printer box of paper 03 13 2012 Parking reunion with Figure 12 05 117 ANNUI T Plus 8 0 23 ANNUI T Plus 8 0 DER File Activity Function Report Worksheet Tool Help Accounts TL L ntries Description ex Mr X expenses E June 2007 J Brown expense account for March 2012 Reference ex employee s number Date Description Miscellaneous Account number Name abbreviation for this ofk if not account O T miscellaneous e 5950 A gt Z 03 03 2012 Hockey tickets with 0 00 0 00 03 06 2012 Restaurant with 03 10 2012 Laser printer box of paper 699 99 Computer equipment Figure 12 06
116. s 8 0 BEA Fie Activity Function Report Worksheet Tool Help NPY IRR Retirement Change date Payment Principal 12 31 2010 1 344 12 837 45 63 162 55 12 31 2011 547 16 129 44 10 581 89 52 580 66 12 31 2012 4 497 33 16 129 44 11 632 11 40 948 55 12 31 2013 3 342 87 16 129 44 12 786 57 28 161 98 12 31 2014 2 073 84 16 129 44 14 055 60 14 106 38 12 31 2015 678 84 14 785 22 14 106 38 0 00 Figure 4 06 Example of the annual results report 28 ANNUI T Plus 8 0 ISSUE DATE This function allows you to modify the starting date of a loan or a lease not applicable when the option Beginning of period payment is selected It happens sometimes that the first period of interest calculation is irregular For example a lender could advance the funds on February 10 2012 and decide with the borrower that the monthly payment would start on March 1 2012 In this particular case the first period of interest has fewer days than normal but in other cases the number of days in the first period exceeds the normal number of days according to the chosen payment frequency As explained before with the ANNUI T program in the data entry window you have to enter the date of the first payment In our example because the payments are monthly and start on March 1 2012 by default ANNUI T assumes that the issue date is February 1 2012 but the function Issue date allows you to modify the starting date
117. s interval of time will generate journal entries Secondly for the file format the user has to specify the accounting software Finally you have to enter a name for the exportation file and click on Continue Note that as opposed to GL entries made from the Cash Disbursement Journal in this situation the export file is always saved in the Export folder under the ANNUI T Plus directory by default c ANNUI T Plus 8 Export Export of GL entries Begining date mm dd 11 Continue Cancel Ending date mm dd 11 File type Accpac Simply z Figure 13 02 126 ANNUI T Plus 8 0 When journal entries are displayed at the beginning of each entry you will notice a box containing an X This indicates that the journal entry is selected for the export file If you wish to exclude an entry simply double click on the box to remove the X 3 ANNUI T Plus 8 0 Function Account Description Interest expense Loan Bank Equipment 01 15 2012 Interest expense Loan Bank Mortgage 01 18 2012 Interest expense 381 97 Loan 1 062 18 Bank 1 444 15 Truck 1 01 01 2012 Interest expense 430 60 Loan 1 000 00 Bank 1 430 61 Truck 2 01 15 2012 Interest expense Unselect all GL entries Example of GL entries generated by ANNUI T Plus Figure 13 03 Because dates in the ANNUI T schedule are theoretical the program allows you to modify an entry date For example if a payment i
118. s no more than 1 unknown per section Then if the capital at retirement is one of the value to calculate ANNUI T also verifies if there is enough known values to establish this amount 85 ANNUI T Plus 8 0 Once the program has calculated the unknowns you can visualize the schedule by selecting Schedule and special events In this screen other possibilities are offered 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help Contributions annual results y Withdrawals annual results bution Initial capital initial casita per Nemin E BTE contribution _ Ending date 25 000 00 CS Soong DER 316 23 01 15 2013 01 15 2042 etirement Retirement capital Retirement capital per mer Nominal ET Er withdrawal eee date 303 050 63 I ER s c00000 2000 00 f 02 15 2042 f 01 15 2062 Interest ea Variation Balance Interest ae Withdrawal 01 15 2012 25 000 00 01 15 2012 oof aez 23 25 316 23 02 15 2012 y x i 25 716 85 03 15 2012 E 26 118 80 04 15 2012 E k 26 522 09 05 15 2012 f E y 26 926 73 06 15 2012 k 27 332 72 07 15 2012 27 740 06 08 15 2012 a i p 28 148 76 09 15 2012 i i y 28 558 82 10 15 2012 8 E 28 970 25 11 15 2012 i E 4 29 383 05 12 15 2012 29 797 22 01 15 2013 i 30 212 77 02 15 2013 E be 30 629 71 ouo a w Nn as Figure 8 02 Schedule of the retirement planning module In the schedule during the contributions pe
119. s normal both modifications affecting the payment Logically the new modification has priority over the previous one Nevertheless ANNUI T always asks you to confirm the new modification in case of an error In these circumstances a window appears to list all the modifications that are in conflict with the new modification In this screen you have a brief description of each of the modifications in conflict the starting and the ending date of the conflict the duration of the conflict and the type of the conflict since there are 5 possible conflict cases If you select Continue every conflicting modification will be shortened or deleted according to the conflict case Note that there are 4 different kinds of overlapping modifications each one representing a case of conflict In order to facilitate the understanding of the conflicts you can compare a modification to an horizontal segment which length is proportional to the duration in periods The intersection of 2 segments represents a conflict When the new modification overlaps the beginning of an existing modification there is a case 1 conflict In this situation the existing modification will be shortened to give priority to the new modification In other words the existing modification will begin at the first regular date following the ending date of the new modification The following is an example of a case 1 conflict New modification nement Exist
120. s the same account number that is used for every loan the lender can leave this cell blank when saving a file Therefore in this case to generate journal entries for a scenario the program use the account number included in the chart of accounts since there is no account number for this item in the scenario In other words the chart of accounts contains the GL account numbers to be used by default For this reason when a user is saving this kind of file he only has to enter the GL account number for accounts that differ from the global chart For example in the case of loans from the lender s point of view most of the time the only GL account to register in the scenario is the receivable ex mortgage to receive from XYZ because GL accounts for the bank and for the interest income remain the same for every loan Since a user could do bookkeeping for several enterprises ANNUI T Plus allows you to create charts of accounts that can be saved This is why before you can generate journal entries you must first activate a chart of accounts To do so from the GL Entries menu in the main window you must select Chart of accounts and then Load It is also from this menu that you can create a new chart unload modify or delete one Once you have saved the required GL accounts for all scenarios and selected a chart of accounts the procedure to generate journal entries is quite simple From the GL Entries menu you m
121. scription of a scenario click on Details To make the selection keep and hold the CTRL key and click on each of the desired scenarios Remember that if the scenarios are consecutive in the list you can save time proceeding by range You simply have to click on the first scenario to be considered hold down the SHIFT key and click on the last scenario of the group If you want to select files from different directories once the selection is done for the first directory you must click on Create list Then for each of the desired directories you have to select the scenarios and click on Add To look at the list of selected scenarios simply click on View list Note that it is always possible to remove scenarios from this list In addition the user may also select all scenarios in a directory by clicking on Directories and Add Once the selection is done click on Continue 95 ANNUI T Plus 8 0 ACCRUED INTEREST This procedure allows you to calculate the accrued interest of a group of scenarios at a given date This report is mostly used by accountants when they have to prepare the financial statement If the accrued interest has to be determined at the end of the financial year this amount is then an estimate of the interest for the interval of time beginning at the date of the last interest calculation included in the financial year and the date of the financial year end The amoun
122. ses the limit is 1305 periods Except for the limit of 1305 periods set by the system the control of the maximum duration is there to prevent unrealistic scenarios For example a loan with fixed payments amortized over too many years renders the reimbursement of the debt impossible the payment amount being insufficient to cover the interest of the first period 15 ANNUI T Plus 8 0 TERM This field is optional and is applicable for loans only This information is used in some of the worksheets generated by ANNUI T Plus In this field you have to enter the duration of the term not the amortization period For example for a loan with monthly payment and a 5 year term the duration to enter would be 60 periods FREQUENCY OF PAYMENTS Here are the different frequencies allowed Payments per year Annual 1 Semi annual 2 Every 4 months 3 Quarterly 4 Every 2 months 6 Monthly 12 Every 4 weeks 13 Semi monthly 24 Every 2 weeks 26 Weekly 52 ANNUI T also allows you to register payments at the end of the month This option is offered when the first payment occurs at the end of a month that has less than 31 days For example if the first monthly payment occurs on April 30 you have to indicate if the payment must be on the 30 day of each concerned month except for February of course or on the last day of the month If the first payment occurs on the 31 day of a month the program automatically s
123. sk from the List of drives After you have selected the drive you have to specify in the path field the directory in which you want to save your scenario If it is a new directory the program offers to create it If the directory already exists you can select it from the list of directories using double clicks to indicate the path We recommend that public accountants create a specific directory for every customer and save all related scenarios by customer In fact a public accountant usually prepares many financial statements For the majority of them he has to establish the accrued interest at the financial year end and the note concerning the principal repayments of the next 5 financial years Knowing that ANNUI T Plus can automatically generate these reports an accountant should always save every scenario For this reason an accountant usually saves a large number of files If the files of all his customers are saved in the same directory it could become difficult for him to identify the scenarios Furthermore there will be a risk of omission when selecting the scenarios for reports such as 5 year repayments Accrued interest Combine summary Combine detailed etc 10 ANNUI T Plus 8 0 This is why the best solution is to always save all the files of a customer in a distinct directory However it is not necessary to create a directory for each type of scenario loan lease investment futu
124. some of which can be configured by the user in the Setup tab First you have to enter the disbursement date a brief description and the amount paid including sales taxes It is possible to search for a specified string in the description column After entering the search string you must click on the magnifying glass To find the next line that contains this string simply click again on the magnifying glass In addition when you click on A gt Z the lines can be sorted according to the disbursements dates amounts or to the alphabetical order of the descriptions which can provide disbursements classified by suppliers if you always enter the supplier s name at the beginning of the description 3 ANNUI T Plus 8 0 File Activity Function Report Worksheet Tool Help SSI PR Accounts Description ex Mr expenses for June 2012 J Brown expense account for March 2012 Reference ex employee s number 163 Description Amount Tip or other non taxable amount ei 03 06 2012 Restaurant with 03 10 2012 Laser printer box of paper 03 13 2012 Parking reunion with 03 15 2012 UPS shipping to 03 20 2012 Soap etc 03 27 2012 Cellular 03 31 2012 Travel for the month 1160 km 53 1 968 13 To register the amount of expense in a column you can double click or press F3 To restore an overwritten field select this field and press FS or Delete on this column Cash disbu
125. st open the compilation that will serve as the model based on column headings and GL account numbers Then you have to click on the Combine button Then a screen is displayed to select the files As usual the selection is done by using the CTRL or SHIFT key Finally another screen appears to enter the interval for the grouping start date and end date For example if you have 12 monthly compilations that have been saved in 12 separate files you can combine them into one file You can then add or edit transactions and save this file Note that the software automatically manage columns if the compilations to combine do not have the same columns structure The consolidation is performed according to the model chosen the active file when you click on the Combine button If a column in the model does not include a GL account number grouping for this column will be based on the column title If an amount was in a column but this column does not exist in the compilation model this amount will be displayed in the miscellaneous column However if the original column had a GL account number there will still be an assignment of this account because it will be selected in the column following the Miscellaneous column In the main screen of the software when you click on Report and then Disbursements there is a function that allows you to create a report in which you can also combine compilations of disbursements In this report the
126. t not be considered in the duration of a modification Notice that if a modification occurs on an irregular date the duration is always only one period since it is an isolated event Thus in these circumstances the program automatically sets the duration to one period only and denies the change of this value Once the duration of the modification is entered you have to indicate the New payment and or the New interest rate depending on the type of modification For more details on the modifications see Particularities of modifications 38 ANNUI T Plus 8 0 EXTEND This procedure allows you to extend the duration of a scenario For a loan an extension could become necessary when one or more payments were modified for lower amounts without any other compensation For example if a skipped payment has occurred on a certain date the payment amount of the last period will be superior to the regular amount case of balloon payment In this kind of situation the program replaces the balloon payment by amortizing the balance until the loan is completely paid off In the case of a lease even the buy back option is amortized However you can always re enter the buy back option with the Close function because a buy back option is in some way a kind of prepayment of the balance Finally for an investment annuity you can extend the scenario by the desired number of periods as long as the total duration o
127. t of accrued interest is established by using a pro rata which is the number of days between these 2 dates in proportion to the number of days between the date of the last interest calculation included in the financial year and the first date of interest calculation following the end of the financial year This result is multiplied by the amount of interest of the first date of interest calculation following the end of the financial year To help you understand let us take an example An enterprise has only one loan The payments have to be made on the 15 day of each month and the financial year ends on December 31 In this example there are 16 days between the last date of interest calculation included in the financial year December 15 and the date of the financial year end December 31 Moreover there are 31 days between December 15 and the next date of interest calculation January 15 If the amount of interest on January 15 is 908 26 the accrued interest on December 31 is then 468 78 calculated as follows 16 31 x 908 26 468 78 Therefore the accrued interest report allows you to make the same kind of calculation for every selected scenario On each line you have a brief description of the scenario and the amount of accrued interest related to this scenario Note that it is possible for you to modify the amount of accrued interest established by the program To do so you have to position the cursor on the amount t
128. t screen and is used to calculate sales taxes on an amount including a portion non taxable if desired Of course this tool can be used to make an invoice but there are other situations For example when you buy many items in a store often on the invoice some items are for business and other are simply personal expenses With the ANNUI T program you just have to enter the total admissible amount before sales taxes Then the program displays the transaction detail amount before sales taxes GST PST and the total amount ANNUI T also displays the amounts for the GL entries 113 ANNUI T Plus 8 0 Cash Disbursements Journal This tool is like a cash disbursements journal Amounts are distributed in columns many of which are defined by the user This is ideal to compile expense accounts credit card statements etc For example let us take the case of expense accounts As we know in order to save time instead of recording GL entries for every disbursement made it is preferable to compile all the disbursements and then register GL entries only for the totals In these circumstances many people use a spreadsheet program for example Excel However ANNUI T Plus provides a much more flexible tool which requires no programming knowledge and is better adapted for this kind of task It is possible to save these compilations and to edit them if needed Once you have set up a model it becomes easy to use it in the future for a new
129. t value of the minimum lease payments ANNUI T considers all lease payments for the lease duration and the amount of the purchase option if you have indicated that this was a bargain purchase option Other amountto consider at the lease term 2 000 00 This amountis payable With the last rent Atthe purchase option date For more information please see the definition for lt lt Minimum lease payments gt gt in CICA Handbook section 3065 Present value ofthe minimum lease payments B A Figure 11 04 Example of criterion 4 in the lease contract analysis worksheet 101 ANNUI T Plus 8 0 Once all data is entered for the 4 criteria you simply have to select the tab Conclusion to obtain the results and an opinion on the nature of the lease contract In fact if one or more of these conditions are met the lease contract is presumed to be a capital lease if not it is an operating lease However you should always refer to CICA Handbook section 3065 for the final classification of the lease Worksheet for lease contract classification Criteria 1 and 2 Criterion 3 Criterion 4 Conclusion Recap The lease contract transfert ownership to the lessee during the lease term Does the lease contain a bargain purchase option Is the lease term equal 75 or more of the leased asset economic life Does the present value of the minimum lease payments represent 90 or more ofthe leased asset s estimated fa
130. tation window last part For example there is a column to select in case of violation of any provision of the debt agreement In these circumstances you have to click on the checkbox at the beginning of this field By default the entire amount of the loan balance is then displayed in the current liabilities but you are allowed to enter a different amount It is important to note that it is possible to add lines for example to include advances from shareholders To do so simply click on Add and enter a brief description of the loan Then fill out the fields in the columns Remember that you can also delete an added line by positioning the cursor on this line and by selecting Remove Finally if you have any doubt concerning the balance sheet presentation of a loan you should always refer to the EIC 122 recommendations 105 ANNUI T Plus 8 0 LONG TERM DEBT SUMMARY This function provides information to support the financial statements and the note concerning the long term debt In the first column a brief description of the loan the name of the debtor and the securities related to the loan are displayed In the second column the maturity date or the end of term date is shown whichever comes first The interest rate effective at year end is in the third column 3 ANNUI T Plus 8 0 File Function LONG TERM DEBT SUMMARY AS OF 12 31 2012 Mortgage 100 000 00 7 000 PMT 700 42 12 15 2015 7 000000 98 446 43
131. te However the opposite is also possible because the interest rate can also decrease suddenly For the borrower the only advantage of breaching the contract is to be able to benefit from the future interest rate fluctuations For example if he foresees another decrease of the interest rates in the short term he could sign for a term of 6 months hoping to renegotiate the next term at an even lower interest rate Nevertheless all this is simply speculative In conclusion the payment of a penalty based on the interest rate differential is rarely profitable To reduce the interest the borrower should try to reimburse the principal as fast as possible Most of the financial institutions allow their customers to prepay at each anniversary date of the loan up to 20 of the initial amount 78 ANNUI T Plus 8 0 7 NET PRESENT VALUE N P V AND INTERNAL RATE OF RETURN I R R As we know due to the inflation phenomenon money usually loses value with time For example you can buy much less with 100 00 today compared to 20 years ago Moreover you can bet that the same 100 00 in 20 years from now will buy even less than today For example if we suppose that the future inflation rate will be 3 annually receiving 100 00 in 20 years is equivalent to having 55 37 of today s dollar value which can be calculated as follows 100 00 x 1 03 20 This kind of calculation is called actualization and means that the present value of
132. te that the higher the discount rate is the lower the N P V result becomes 79 ANNUI T Plus 8 0 Therefore the N P V provides a tool for project comparison taking into account the risk related to each of the projects However if the amount of investment differs considerably from one project to another the best project is not necessarily the one with the highest net present value Thus the rate of the return on investment should also be considered For this reason analysts usually calculate not only the N P V but also the rate of return that makes the N P V equal to zero 0 This rate is called the internal rate of return commonly known as the I R R To be acceptable the I R R of the project has to be equal or higher than the investor s expected rate of return with an equivalent degree of risk The higher the I R R is the more attractive the project becomes The N P V and the R R help to make better decisions but of course many other factors have to be considered when it comes to project analysis There are also other evaluation methods but the N P V and the I R R remain 2 of the most useful methods However even with a financial calculator the N P V and I R R calculation is sometimes an arduous task Fortunately with ANNUI T this kind of analysis is very easy to do The program also offers many options to facilitate the task 80 ANNUI T Plus 8 0 3 ANNUI T Plus 8 0 Frequency of cash
133. the Modification to the end of the scenario option Nevertheless you can always cancel this selection and enter a shorter duration 60 ANNUI T Plus 8 0 Therefore when you change the interest rate of a fixed payment loan until the end of the scenario the program proposes a new payment amount In the case of a loan or an investment annuity the new payment proposed is established according to the initial future value which is the one entered in the data entry window when you created the scenario Of course for an ordinary loan the future value is zero since the loan has to be completely paid off at the end of the amortization period However in the case of a residual value loan the new payment amount is calculated in order to insure that the final balance is equal to the residual value Moreover for a lease contract the new proposed payment is always determined to preserve the initial buy back option Please note that if you accept the new proposed payment this modification will be automatically combined with the interest rate modification This combination will start at the next regular date and will be effective until the end of the scenario In other words the list of conflicts is never displayed in these circumstances Nevertheless if the first modification change of the interest rate for only one period overlaps another interest rate modification the program warns you of the conflict Moreover if there is
134. the current contract based on the actual conditions of this contract The Amount due to prepay the loan is simply the addition of the actual balance and the penalty Finally the Interest rate differential value represents the penalty to be paid to breach the contract In the following field this penalty is also expressed in a percentage which is the penalty divided by the actual balance of the loan Let us return to our example After discovering the amount of penalty that he would have to pay John is disappointed but also confused Conscious of the fact that money looses its value with time he does not know what to do The question is Is it advantageous to pay 11 414 70 penalty to save 13 490 60 over 3 years The answer is not immediately evident In fact John would have to be able to calculate with the periodic interest rate the net present value of the difference of the balances at the end of the term 2 800 04 and the monthly savings John would realize that there is no gain to make since the penalty completely negates the savings In fact when a financial institution calculates a penalty based on the interest rate differential the return on investment is the same because the amount of penalty is equivalent to the net present value of the interest that the institution will not receive If the lender s return on investment remains the same the borrower simply has nothing to gain 77 ANNUI T Plus 8 0 For t
135. tion ANNUI T will warn you of a conflict The same thing happens when the new modification overlaps a modification of a different type one affecting the payment and the other one affecting the interest rate In fact every time you enter a modification affecting the payment ANNUI T verifies if this modification overlaps an interest rate modification If it is the case the program proposes to combine the 2 modifications for the overlapping period As well if you want to change the interest rate in the interval of a modification affecting the payment the program will ask you if the 2 modifications have to be combined or not Therefore in the list of conflicts there is an X at the beginning of the line identifying a modification that could be combined with the one in creation If you do not want to combine one of the modifications you simply have to double click on the line of this modification and the X will be deleted This modification will then be treated like an ordinary conflict which means that this modification will be shortened or deleted depending on the kind of overlap to give priority to the one in creation To illustrate the principles of modification combinations let us take the following case A fixed principal payment loan of 96 000 00 is repayable by 60 monthly payments starting January 10 2011 The interest rate is floating Initially this rate was 12 5 According to the contract for the first year
136. unts must be used for the cash flow variation interest principal etc The user must also indicate the type of journal entries For example in the case of a loan you have to select between Borrower or Lender It is important to note that this information must be entered when you save the file For lease scenarios the user must also indicate the nature of the contract capital lease or operating lease Note that ANNUI T Plus includes a function to help you establish the nature of a lease contract based on the criteria in chapter 3065 of the CICA Handbook For more information please refer to Lease contract classification in the Worksheets section Since it often happens that the same accounts are used for several scenarios for example the bank account ANNUI T Plus permits you to create a chart of accounts lt 2 ANNUI T Plus 8 0 le 4 En Chart of accounts A Capital lease Operating lease Investment Lender Interest variation ex Interest income Principal variation ex Investment Cash variation ex Bank Borrower Interest variation ex Interest expense Principal variation ex Loan Cash variation ex Bank Figure 13 02 Example of a chart of accounts 124 ANNUI T Plus 8 0 Let us take the case of a lender who has only one bank account and has 300 loans in effect This lender does not have to enter the bank GL account number in each of 300 scenarios Because it is alway
137. ur periodically Let us take the case of a mortgage with monthly payments that permits the borrower to prepay once a year on the anniversary date up to 15 of the initial mortgage amount Suppose that we would like to analyze the possibility of paying once a year 1 000 00 over the regular monthly amount Of course these repetitive modifications can be done one by one but this could take a considerable amount of time Fortunately ANNUI T allows you to do this kind of task automatically For more information see Repetitive modification in the section Particularities of modifications When the modification is not repetitive you have to indicate the duration of the modification If the modification is effective until the end of the scenario simply click on Modification to the end of the scenario This implies that the modification will end on the period that is preceding the last period because no modification is allowed on the last period except an adjustment of closure In fact in the case of a loan or a lease the last period is reserved for the final payment of the balance For an investment annuity the last period serves only to calculate the final interest which is the interest on the balance following the last deposit If the modification does not last until the end of the scenario you must then enter the number of regular periods that this modification will be effective In other words irregular dates mus
138. ust select Export In the file selection window you have to choose the tab representing the type of scenario loan lease or investment Note that for a batch of journal entries all scenarios must be of the same type For example a batch could not contain loan entries and lease entries In these circumstances you must create 2 batches The next step is to select the files for the journal entries To make the selection keep and hold the CTRL key and click on each of the desired scenarios Remember that if the scenarios are consecutive in the list you can save time proceeding by range You simply have to click on the first scenario to be considered hold down the SHIFT key and click on the last scenario of the group If you want to select files from different folders once the selection is done for the first directory you must click on Create list Then for each of the desired folders you have to select the scenarios and click on Add To look at the list of selected scenarios simply click on View list Note that it is always possible to remove scenarios from this list 125 ANNUI T Plus 8 0 In addition the user may also select all scenarios in a directory by clicking on Directories and Add Once the selection is done click on Continue Then a new window appears First you must enter the beginning date and the ending date In fact for each of the chosen scenarios all transactions in thi
139. w To activate the Modify function you can also double click on the payment amount to modify in the schedule or double click on the interest rate 2 ANNUI T Plus 8 0 E OK File ty Function R eet Tool Help Modification until the end of the scenario of periods that the modification is effective o Number of periods for the modification duration of periods that modification is NOT effective 1 Number of repetitions Modification beginning date 9 500000 E 9 500000 Modification ending date 9 500000 9 500000 Current interest rate atthe modification date 1 500000 9 500000 9 500000 9 500000 9 500000 Current payment atthe modification date 9 500000 New payment 9 500000 9 500000 9 500000 EE Eo Issue date Funds advance Adjust Close Modify Extend See Delete modifications Sum Print Data Fixed payment oan ee E tucks dO Noma Figure 4 11 Modification window DO 14 Ones Wh co o In the modification window first you have to select from the pop up list the kind of modification The multiple choices depend on the type of the scenario For example the choices for a loan are not exactly the same as for an investment annuity which is normal In addition the possibilities are different for a modification starting on a regular date and one starting on an irregular date Note that an irregular date is a date that is not a norma
140. y select this field and press F8 Remember that the program allows you to save this kind of worksheet You can select this function in the File menu which also gives you the possibility to open or delete a worksheet Note that these worksheets are dynamic It is possible in a worksheet to consult and even modify the schedule of any of the selected scenarios for the report When you return into the worksheet to reflect the changes you simply have to click on Update You can also add or unselect scenarios for the report Because of this flexibility instead of starting a new worksheet every year from the start you just have to open the worksheet from the previous year make necessary modifications if needed select Update and enter the new calculation date 94 ANNUI T Plus 8 0 For those who use CaseWare software they can even export an ANNUI T Plus worksheet in a CaseWare folder Furthermore Avantage PRO now includes links to open ANNUI T Plus files Avantage PRO is a suite of accounting solutions financial statements budget audit review etc PROCEDURE TO SELECT THE SCENARIOS First you have to indicate the type of scenario loan lease investment or future value and the desired report by clicking on the corresponding tabs Secondly you must indicate the disk drive and the directory containing the scenarios to be used for the worksheet Thirdly you have to select the scenarios If you want to see the de
141. y Function Report Worksheet Investment Future val Penalty NPY IRR Retirement Initial amount 100 000 00 Adjusted amount 100 000 00 Number of periods Term Frequency of payments Monthly Modify Compounding frequency Semi annual ES Data Nominal annual interest rate Effective interest rate __ 7122500 Periodic interest rate 0 575004 G See Equivalent interest rate 6 900047 e schedule Days in year 360 00 oc RE qu Payment Normal a Last payment adjusted non ep iv effective when the schedule has Beginning of period payment yes no been modified Adjusted payment 700 42 Other informations Client informations Fixed payment loan Directory Examples EE Mortgage g Caisses Desjardins Figure 3 01 Example of a data entry window fixed payment loan BASICS In a data entry window there are usually several fields to fill in Moving through this screen can be done with the mouse by clicking on each data field you have to fill in You can also press TAB or ENTER to move to the next field and press SHIFT TAB to go through the fields in reverse order When a field is selected a vertical line appears showing the position of the cursor in the field You can move the cursor with the mouse the arrow keys or with the HOME and END keys ANNUI T Plus 8 0 To erase a zone containing data you simply have to define the zone of data to be erased with a drag of the
142. y problems since a repetitive modification is usually defined at the beginning of the contract 62 ANNUI T Plus 8 0 MAXIMAL NUMBER OF MODIFICATIONS ANNUI T allows you to enter up to 200 modifications per scenario Knowing that modifications are not so frequent this maximum remains relatively high However if this limit is reached it is still possible to continue To do so you have to position the cursor on the line following the last modified line and select the Close function to register a refinancing Once you have entered the refinancing be sure to save the scenario Next you have to create a new scenario that will be in reality the continuation of the one that has been closed In the new scenario the initial amount to be entered is the balance of the previous scenario at closure As for the duration you must enter the remaining number of periods As for the first payment date you have to enter the date of the next regular payment which is the one following the closure All the other values stay the same Next you have to select Calculate The program will then establish the payment amount Most of the time due to all the modifications made earlier you must enter the real amount of payment in the Adjusted payment field 63 ANNUI T Plus 8 0 MISCELLANEOUS CHANGE OF THE FINANCIAL YEAR END DATE When you fill in the data entry window you have to enter the financial year end date By def
143. you must select the Print function from the schedule window because the Print function always relates to the window that is displayed When you activate the Print function the program displays the printing window as in the example below 2 ANNUI T Plus 8 0 Initial amount Adjusted amount Printing Number of periods Number of copies to print Frequency of payme on Compounding frequ Print destination Nominal annual int File type Effective interest rate Periodic interest ratd Equivalent interest r lo 1st pmt date IANNULT_Plus_8 CS Bs ER mm cxampies Others Beginning of period Adjusted payment Fixed payment loan eco Examples EE Mortgage r Caisses Desjardins Figure 3 02 Printing window The prompted screen requires you to indicate the number of copies to be printed and the destination printer or file ANNUI T Plus 8 0 The program always chooses the Windows default printer Nevertheless by clicking on the Printer button the printer configuration screen is displayed which allows you to select a different printer This change of printer is valid not only for ANNUI T but also for Windows Note that the printer configuration screen also lets you choose other options such as portrait or landscape presentation and the printing quality Finally if the chosen printing destination is a file you have to indicate the disk drive and the path where t

ANNUI-T Plus 8.0 8 - ANNUI-T, Financial calculator software

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