Reserve calculations
Inputs
Driver
Value
Look Ahead Period (Driver = Next Debt Service)
Start
End
Financing Mode
Interest
Method of Payment
Calculations
Profit & Loss statement | Interest x Reserves.Balance Sheet(t-1) |
|---|---|
Cashflow statement |
|
Balance Sheet |
Debt Service Example
If a Reserve entity has Next Debt Service as Driver, the percentage value of Debt Service in the defined Look Ahead Period is deposited as Reserve.
If Debt is issued for example on the 31.12.2015 with a Loan Period of 10 years, Interests of 5% and yearly linear Redemptions, with a Debt Service of 50% and 12 months Look Ahead Period the following example yields:
Debt | ∑ | 12.2015 | 01.2016 | 01.2017 | 01.2018 | 01.2019 | 01.2020 | 01.2021 | 01.2022 | 01.2023 | 01.2024 | 01.2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Profit & Loss statement | -550'000 | 0 | 100'000 | 90'000 | 80'000 | 70'000 | 60'000 | 50'000 | 40'000 | 30'000 | 20'000 | 10'000 |
Cashflow statement | -550'000 | 2'000'000 | -300'000 | -290'000 | -280'000 | -270'000 | -260'000 | -250'000 | -240'000 | -230'000 | -220'000 | -210'000 |
Balance Sheet |
| -2'000'000 | -1'800'000 | -1'600'000 | -1'400'000 | -1'200'000 | -1'000'000 | -800'000 | -600'000 | -400'000 | -200'000 | 0 |
The Debt Service, composed of Redemption and Interest payments, yields the Cashflow statement. With a Debt Service of 50% the following Reserve amount yield:
Debt Service | ∑ | 12.2015 | 01.2016 | 01.2017 | 01.2018 | 01.2019 | 01.2020 | 01.2021 | 01.2022 | 01.2023 | 01.2024 | 01.2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Profit & Loss statement | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Cashflow statement | 0 | -150'000 | 5'000 | 5'000 | 5'000 | 5'000 | 5'000 | 5'000 | 5'000 | 5'000 | 5'000 | 105'000 |
Balance Sheet |
| 150'000 | 145'000 | 140'000 | 135'000 | 130'000 | 125'000 | 120'000 | 115'000 | 110'000 | 105'000 | 0 |
With the Debt issuing a Reserve entity with 50% of Debt Service of the following year is deposited. Based on a yearly decreasing Debt Service the Reserve decreases as well during the Loan Period. When the Debt is refund the Reserve can be liquidated completely.