Dividend and Interest Accrual

Many trading firms, especially ones that are not self-clearing, use prime brokerages to maintain accounting books and records on the trading firm’s behalf. Accrual accounting is used: items are recognized when they are earned and expenses recognized when they are incurred. Because accrued-based accounting is used, in some cases accruals are set up in theRead more about Dividend and Interest Accrual[…]

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Copyright 2011 Eric Bank, Freelance Writer

14 Jan

Eric Bank Posted in Financial topics No comments

Termination of Interest Rate Swaps

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Though there are several types of interest rate swaps (IRS), the most familiar type is known as fixed-for-floating. A notional amount of principle is used to calculate periodic fixed and floating interest payments. One of the counterparties receives fixed interest payments and pays out floating-rate interest to the other counterparty, who reciprocates by paying fixed and receiving floating. The floating rate can be pegged to three-month the U.S. Treasury bills, London Interbank Offer Rate (LIBOR), or any other well-established rate index. Continue reading “Termination of Interest Rate Swaps” »