How does MHDC determine if interest should be accrued for at year-end, and How does MHDC determine accrued interest?
Interest should be accrued for if Januarys mortgage payment is paid in January instead of December. This amount should be booked regardless of materiality because of potential surplus cash implications. The interest portion of Januarys payment is for interest earned from December 1 to December 31st. MHDC uses MHDCs internal payment posting date to determine if interest should or should not be accrued for. The amount to be accrued for is determined based on the propertys amortization schedule and monthly billing statement (i.e. Januarys Mortgage Statement would show how Januarys payment was to be allocated between principal and interest.) Billing statements are usually received 10 days prior to the payment becoming due.
