5g Debt Library

Debt Library
This library contains 5g functions for modeling debt.

• InstallmentDebtλ() Creates a single debt tranche where the debt has a set term and payments are calculated to payoff the debt by the end of the term. 

• InstallmentDebtsλ() (Note! Plural) Processes several debt schedules by calling InstallmentDebtλ() once for each debt tranche. When creating debt schedules using this function, debts are limited to one draw, one interest rate, and no extra payments. 

• InstallmentDebtLabelsλ() Creates a column of labels for each debt tranche row. 

• InstallmentDebtTotalsλ() Creates row totals, where appropriate, for each debt tranche line.

• ScheduleAPRsλ() Schedules monthly interest rates in the model's timeline. Rates are converted for each month by InterestMethodλ().

• InterestMethodλ() Converts an APR to a monthly rate based on the selected interest method and number of days in the month.

These functions create separate lines which can be 'plugged' into our financial statements. Here are the labels created by InstallmentDebtLabelsλ() and suggestions on where each line should go in various financial statements: 

Balance Sheet (BS)

Debt Opening – Appears as the beginning balance of liabilities under "Long-Term Debt" or "Short-Term Debt."

Debt Draw – Increases liabilities (new borrowing recorded under "Debt Payable").

Debt Repayment – Reduces liabilities (decrease in "Debt Payable").

Debt Extra Payment – Also reduces liabilities but may be categorized separately if it includes prepayment penalties.

Debt Closing – Ending balance of liabilities under "Long-Term Debt" or "Short-Term Debt."

Interest Opening – Beginning balance of accrued interest (if applicable).

Interest Charge – Increases accrued interest liability.

Interest Payment – Reduces accrued interest liability.

Interest Closing – Ending balance of accrued interest.

Points Charge & Fees Charge – May be capitalized as part of loan costs in assets or recorded as an expense depending on accounting treatment.

Cash Flow Statement (CF)

Debt Draw – Reported under "Financing Activities" as an inflow.

Debt Repayment & Debt Extra Payment – Reported under "Financing Activities" as an outflow.

Interest Payment – Reported under "Operating Activities" (or sometimes Financing Activities under IFRS).

Points and Fees Payment – Reported under "Financing Activities" (if capitalized) or "Operating Activities" (if expensed).

Profit & Loss Statement (P&L)

Interest Charge – Recorded as an expense under "Interest Expense."

Points Charge & Fees Charge – If expensed, they appear under "Other Expenses" or "Financing Costs."

Total Payments – Only the interest portion and any expensed fees affect the P&L, while principal repayments do not.