Locking dates affects how subsequent dates in a series are determined when the start date is on the last day of a month.
To Lock/Unlock a date, right-click in a Date field. The Lock or Unlock option will be available in the context menu when appropriate.
When a series of monthly payments starts on the last day of the month, TValue assumes that every date in the series also happens on the last day of each month. However, there are times when this assumption is incorrect. For example, if a loan agreement requires that payments be made on the 30th of each month, but the first payment is on a month where the 30th is the last day of the month, then TValue will assume that all payments are always on the last day of the month. This assumption will be incorrect on 31 day months.
By locking the first payment to end by the 30th, this problem is resolved. For month-based compounding periods such as Monthly, Quarterly, and Annual, TValue will treat the 30th as if it were on the last day of the month. Subsequent payments will happen on the 30th of the month or on the last day of the month if there is no 30th such as in February.
Start dates can only be locked if the day can be the last day of the month for some but not all months. That is, only dates where the day is the 28th, 29th, or 30th can be locked.
Lock Period
Locking a start date initiates a lock period. The lock period continues until the start date of the next unlocked cash flow line.
Stub Periods
Locked dates are used to allow months to end on a day other than the actual last day of the month. Any payments or loans during the start date’s month on days after the locked date will be treated as if they also happened on the locked date. For example, if you locked the date 5/30/2014 on the 30th, then payments on 5/31/2014 would be treated as if they happened on 5/30/2014 and no interest will be accrued between 5/30 and 5/31.
There is only one day between a locked date and the first of the next month, even if the locked date is not on the last day of the month. For example, a series starting in February could be locked on the 28th. If the series ended on July 28th and was followed immediately by a Payment on August 1st, then only one day’s worth of interest would be accrued between July 28th and the August 1st Payment.
If the desired result is to count all days after the last locked date, this can easily be accomplished by ending the lock period. To do this, enter a payment with an amount of 0.00 on the last date you want locked, but do not lock the date for this new payment. In this case, enter a payment on 7/28 for an amount of zero and do not lock this start date. This will allow interest to start accruing normally.
Locked Dates with Exact Days Compounding
If dates are locked and Exact Days compounding is used, then the actual number of days between periods is counted. In this case, locks will still affect when the next payment in a series is made, but interest is calculated based on the actual number of days between the dates.