Effective Dates

The ADB application uses effective dates to determine which transactions are included in ADB calculations. Effective dates are used to indicate which date a transaction amount needs to be included into the ADB calculation.

Effective dates set at the company level or higher are used to reflect the number of days to add into the ADB calculation, starting at the beginning of the period and running up to and including the set effective date. If not set, the effective date defaults to month end.

At the transaction level, effective dates are used to indicate the date the transaction amount is included into the ADB calculation. If an effective date is not set for a transaction, the transaction date is used.

Example 1

LGE Corporation has five ADB companies using a 12 month fiscal calendar. Of those companies, two use an effective date of March 31st while the rest use an effective date of March 15th. To set these effective dates, an effective date of March 15th is set globally over all five companies. Next the effective date of March 31st is set for the two companies that will not use the global effective date.

When calculating average daily balances for the periods, three companies will use all transactions posted from March 1 through March 31st. The two companies with effective dates set at company level will use transactions posted from March 1st through March 15th.

Example 2

LGE Corporation has a cut-off time of 3PM on March 31st for transactions included in the current period's ADB calculation. A transaction is posted at 4pm. To include the transaction in the next period's ADB calculation, its effective date is changed to April 1st.

Example 3

LGE Corporation wants to include an April 2nd transaction into its ADB calculation for March. To do this, the effective date for the transaction is set to March 31st.