Interest Allocation Report - Average Daily Balance

• Interest Allocation Report Average Daily Balance is in question
• Where does Average Daily Balance from in Munis?

• Interest Allocation (IA)
• Cash Flow (CF)
• Average Daily Balance (ADB)
• Transaction Type 1 (Actuals) Posted

The beginning cash balance is taken for the cash account by first selecting the actuals up through (but not including) the reporting period

1. The beginning cash balance is taken for the cash account by first selecting the actuals up through (but not including) the reporting period.
   • Interest Allocation Report - Starting Balance Amount
2. The activity for the cash account is then selected for the reporting period using the year, period, and effective date.
   • See the example below in additional information
3. The effective date is how we determine how to compute the average daily balance.

For example: 

• Let's say Beginning Cash Balance for Cash Account A: $300
• Cash Account A has 3 transactions in October
• We divide the amount of each transaction by the number of days in the month and then multiply that number by the number of days left in the month based on the effective day (seen below)
  • Transaction 1: $8000 – Effective date 10/1/12 - (8000/31) * 31 = $8000
  • Transaction 2: $250 – Effective date 10/5/12 - (250/31) * 27 = $217.74
  • Transaction 3: $5000 – Effective date 10/10/12 - (5000/31)*22 = $3548.38
    • The average daily balance will take that sum and then add in the beginning cash balance, so the average daily balance will be $12066.1
      • System takes the example account's average daily balance and divides by the sum of all accounts average daily balance. 
        • If not including negative balance, and account balance is negative it would be assigned a percentage of zero. Meaning it would only be sum of positive amounts. 
        • If including negative balances this would be sum for all accounts.
          • Then it would calculate the interest allocation amount to be the total interest amount manually entered on screen multiplied by the percentage for the account.
          • After all interest is allocated, system checks to make sure all accounts equal to the total interest and that the percentages sum to 100%.