Here, you select the method according to which you want the interest period and the due date to be updated.

The update rules that are provided by the F4 help for selection depend on whether you selected the standard or the special rule for updating the interest.

In the Money Market area, the system defaults to the Regular method (at end of term). This means that the first interest period ends at the end of the term. With Derivatives, the system usually defaults to the Unadjusted rule.

Both the interest period end and the due date are updated regularly. The update takes place according to the frequency entered. Both of these dates are independent of each other, since each of them is determined separately, and one date is not affected by a shift in the other date.

If one or both dates shift(s) to a working day according to the calendar entered, the dates before the shift provide the basis for calculating the following dates. In other words, the following interest period is shortened accordingly.

The interest period end is calculated initially as Friday 12/22/2000 on the basis of the frequency. This date can be shifted to a working day, provided that a working day check has been set up for the end of the interest period. In this example, the calendar specified does not require a shift.

When you use this update method, it does not matter what is in the "Due date +/-" field.

The end of the interest period of the second interest period is one month after the end of the interest period of the first period before this was shifted. As a result, it first falls on the 01/22/2001, is then checked by the working day check, and shifted to the next working day, if required.

the due date is shifted by the working day check.

The interest period end is based on the due date and the number of days entered in the "Days +/-" field. If the dates are shifted to a working day, the dates before the shift provide the basis for calculating the following dates. In other words, the interest period that follows is shortened accordingly.

On the basis of the frequency, the due date is initially calculated as Sunday 12/24/2000. As a result of the working day check, this date is then shifted to the next working day, which is Wednesday 12/27/2000.

In the next step the interest period end is determined:

Using the "unadjusted" update method, the interest period end (according to the number of shift days entered in the "Days +/-" field) is one day before the due date before being shifted, in other words, one day before 12/24/2000. Therefore the end of the interest period is 12/23/2000.

Using the "adjusted" update method, the interest period end (according to the number of shift days entered in the "Days +/-" field) is one day before the due date after the due date has been shifted, in other words, one day before 12/27/2000. Therefore the end of the interest period is 12/26/2000.

the interest period end is shifted by the working day check.

The due date is based on the interest period end and the number of days entered in the "Days +-" field. If the dates are shifted to a working day, the dates before the shift provide the basis for calculating the following dates. In other words, the interest period that follows is shortened accordingly.

The interest period end is calculated initially as Friday 12/22/2000 on the basis of the frequency. This date can be shifted to a working day, provided that a working day check has been set up for the end of the interest period. In this example, the calendar specified does not require a shift.

In the next step the due date is specified: This is calculated initially as Saturday, 12/23/2000 using the interest period end, 12/22/2000, and the shift of one day that is set up. The working day check that follows shifts this date to the next possible working day, which is Wednesday 12/27/2000.

With the "unadjusted" (interest period) update method, the dates that are calculated remain as they are. This means that interest is only calculated up to 12/22/2000 for the nominal amounts upon which the interest rate swap is based. However, the interest is only paid on 12/27/2000.

With the "adjusted" (interest period) update method, the interest period end is adjusted again if the due date shifts. If, for example, a shift of one day is entered in the "Days +/-" field, the interest period end is finally shifted to 12/26/2000.

With both update methods the interest period that follows is shortened accordingly. In other words, the interest period end of the following period is initially still the 22^nd of the month.

The dates for the end of the interest period and for the due date are calculated as follows:

The interest period end of the second interest period is one month after the interest period end of the first interest period after being shifted. Since the interest period end of the first period is shifted to 12/26/2000 according to the "Regular with variable dates / adjusted" update method, the interest period end of the following period falls on the 01/26/2001. After undergoing a working day check, this date may then be shifted to the next working day. Since there was no shift in the case of the "Regular with variable dates / unadjusted" update method, the interest period end of the following period continues to be the 22^nd of the month.

You enter the dates for the interest period end and the due dates individually by choosing Edit => Single dates from the menu. In the case of a term greater than one year, it is sufficient to enter the dates for the first year. These are then used automatically as a basis for the following years.

In the case of the "Single dates" method, the dates for the end of the interest periods and for the due dates are determined independently of each other. With the other two update methods, the due date is calculated from the interest period end and the "Days +/-" field.

For the "Single dates unadjusted" method, these two dates no longer change after this.

According to the "Single dates adjusted" method, on the other hand, the interest period end can be changed again, provided that the due date is shifted to a working day: The interest period end is then adjusted in line with the due date to ensure that the interval between the two dates is the same as the number of days entered in the "Due date +/-" field.

The table below demonstrates the above-mentioned relationships more clearly:

In the Calculation basis view, you can display the dates (payment date (º due date), calculation date from and to) that result from your entries in addition to the calculation days per interest period.