New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle S - Division of Housing and Community Renewal › Chapter III - Low Rent Housing › Subchapter D - Accounting Manual For Public Housing Agencies › Part 1645 - Investments › Subpart 1645-2 - Accounting For Investments › Section 1645-2.4 - Interest earned on investments

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Interest earned on all investments,
						except investments in U.S. series F, G, J and K bonds, U.S. Treasury bills,
						savings accounts and State Housing Fund investments, shall be accrued at the
						end of each calendar quarter beginning as of the date of acquisition of the
						investment. The accrual of interest earned on investments in U.S. series F, G,
						J and K bonds and on State Housing Fund investments is separately described in
						sections 1645-2.6,
						1645-2.7, and
						1645-2.8 and for treasury bills,
						see section
						1645-2.3,
supra.
The charge for interest accrued on investments is made to account 1144, Accrued
						Interest Receivable on Investments, and the credit is made to the applicable
						interest earned account, as follows:
Funds
										invested
Account to be
										credited for interest earned
Development Funds
Account 1420.1, Interest-for interest earned
									 prior to the date of substantial completion.
Account 3610, Interest Earned-for interest earned
									 beginning with, and subsequent to the date of substantial completion.
Administration Funds
Account 3610, Interest Earned.
Reserve Funds
Account 2511, Interest Earned on Reserve Fund
									 Investments.
Note:
Interest earned on reserve fund investments shall not
						  be apportioned among the various reserves, but shall be accumulated in account
						  2511 and considered as a part of the replacement reserve.
(b) In calculating the interest to be accrued
						on U. S. government obligations, the Treasury Department requires that only one
						of the two days of date and due date of an obligation be taken into account in
						stating the time for which interest is to be calculated. With respect to
						interest on U. S. government obligations for fractional periods, the Treasury
						Department rule is that the time is the true fraction of that period. For an
						annual rate, the time is the exact number of days for which the interest runs,
						counting either the initial date or the due date, divided by the number of days
						in the year, 365 or 366; for semiannual or quarterly period, it is the number
						of days for which the interest runs divided by the number of days in the
						particular half year or quarter year.
(c) With respect to obligations other than
						U.S. government obligations, local agencies should be guided by the General
						Construction Law of the State of New York which defines the term year as
						meaning 365 days, the added day of a leap year and the day immediately
						preceding being counted as one day. Under the New York law, the term year means
						12 months, the term half year, six months, and the term quarter of a year,
						three months. For investments other than U. S. government obligations, local
						agencies will find it most convenient, however, to state the time in terms of
						months and days, rather than in days alone. This is the usual practice for such
						investments and has also been adopted by the division for the purpose of
						accruing interest payable on State housing bonds (see Part 1644, Debt Service).
						Interest for odd days is computed on the basis of so many thirtieths of a
						month, assuming a 360-day year. Attention is called to the fact that banks
						operating under the Federal Reserve Banking System employ an entirely different
						basis for calculating interest on obligations, such as a local agency's
						temporary loan note, held by them. Such banks calculate interest on the basis
						of 360 days to the year, but the computation of the time the interest runs
						seems to vary among banks. Some banks compute the actual number of days, others
						state the time in months and days with each month considered as having 30 days.
						The latter convention has been adopted by the division for the purpose of
						accruing interest on temporary indebtedness of the local agency (see Part 1644,
						Debt Service). For savings accounts the interest is generally not earned unless
						the deposit is maintained to the end of the interest period. The interest
						earned will therefore be recorded at the end of the interest period designated
						by the bank by means of a journal voucher.
(d) Interest payments, when received, are
						deposited in the appropriate bank account for the applicable fund and credited,
						through the cash receipts register, to account 1144, Accrued Interest
						Receivable on Investments. See section
						1645-2.9 for the allocation of
						interest earned on development fund investments to the related
						programs.