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Post by longjohn on Oct 30, 2014 15:35:21 GMT
Got a big yellow banner when logging on today (see image).  The accrued interest is already available as a stand alone figure in the pie chart below the total so why deduct it from the total?? The existing layout is simple and easy to read, ie: the grand total followed by a breakdown of its makeup. Once this takes effect there will be nowhere within FC that shows your total funds in one figure. You will always have to calculate it yourself. John |
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Post by goldservice on Oct 30, 2014 15:43:28 GMT
The present method is what I (as a lay man) would call the accountant's way of totting up assets. The new method will be what I would call the lay person's way of looking at their money. In the case of a savings account, the lay person would not usually say he had the interest until it had been paid to him. In fact, I can remember when this lay person didn't even know what accrual was. So FC is perhaps moving towards a presentation that is more friendly for lay people. But I can see how it could be annoying for those who are used to including accruals in their asset totals.
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oldgrumpy
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Post by oldgrumpy on Oct 30, 2014 15:48:54 GMT
I thought an accrual was a devil who bullied Dalmatian puppies.  |
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Post by mrclondon on Oct 30, 2014 16:03:40 GMT
About time too.
Banks and building societies don't included accrued, but not yet paid, interest in your total balance. Nor should any reputable financial organisation, especially when that interest is not guranteed to be paid. And in the case of FC a proportion of that interest is very likely not to be paid.
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blender
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Post by blender on Oct 30, 2014 16:47:36 GMT
Agreed mrclondon. It is definitely counting chickens before they are hatched - just to inflate a number. The annualised return figure on our summary also includes accrued interest, and so by whatever logic that should be removed from the calculation? It might balance the exclusion from the calculation of funds locked in bids.
This may be a move relating to standardisation of figures in the sector, and it also might have something to do with the reconciliation of lender accounts by the recent adjustments on some accounts, where accrued interest was part of a basic formula reconciling account totals to lenders stakes which no longer worked in some cases.
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sl75
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Post by sl75 on Oct 30, 2014 16:54:38 GMT
... although this will have the side effect that, when buying loan parts at par value, your FC total will go down by the amount of accrued interest that you paid for.
Possibly confusing for auto-bidders, who would previously have seen their total remain constant and the allocation between slices of the pie chart change.
[Edit: ... and similarly, when selling loan parts, the total will go up by more than the amount of the premium, as accrued interest is exchanged for cash.
Unless of course they're planning to modify that behaviour too.]
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blender
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Post by blender on Oct 30, 2014 17:56:05 GMT
... although this will have the side effect that, when buying loan parts at par value, your FC total will go down by the amount of accrued interest that you paid for. Possibly confusing for auto-bidders, who would previously have seen their total remain constant and the allocation between slices of the pie chart change. [Edit: ... and similarly, when selling loan parts, the total will go up by more than the amount of the premium, as accrued interest is exchanged for cash. Unless of course they're planning to modify that behaviour too.] I had wondered if this was phase 1 of removing the difficult accrued interest from the lender's sight, but it is comforting to new lenders to see something mysterious ticking up encouragingly as the earnings start off negative. (I started off a new account in Feb this year which was designed to have negative paid interest at 5th April but lots of accrued interest, so as not to have to trouble the tax man).
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Post by GSV3MIaC on Oct 30, 2014 18:13:39 GMT
My assumption was you would still be able to see it tick up someplace, just not added in to the overall total..
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