Accounting records for external debt need keep track of a few items only. Some relate to stocks –amounts outstanding at any particular time, other relate to flows –transactions in a defined period, such as a calendar year.
Stock data Stock data is compiled at the end of a given accounting period, at a point of time, e.g., December 31, 1999.
Disbursed debt outstanding
The outstanding balance of a loan equals the cumulative disbursements, less repayments, amount canceled and amounts restructured.
Undisbursed balance
The undisbursed balance is the amount of a loan committed but not yet disbursed.
Arrears of principal and interest
Arrears are the cumulative amount of debt service payments due but not paid. Arrears of principal and interest are recorded separately. In external long-term debt accounting, arrears should be included in disbursed debt outstanding but yet identifiable separately.
However, when arrears result from the inability of the authorities to provide foreign exchange (and not from the inability of the original debtor to provide national currency), some countries separate arrears from the original loans and treat them as short-term liabilities of the central bank, but even then it is necessary to be able to associate the arrears with the original obligation.
Arrears in total debt service at the end of any period equals the arrears in total debt service at the end of the previous period plus the debt service scheduled to be paid, but minus debt service paid, in the period. Arrears must be recorded separately for principal, interest and other charges.
Stock of debt
At the end of any time period, the stock of debt equals the stock of debt at the end of the previous time period, plus disbursements, minus amortization, principal rescheduled, and write-offs during the period. Rescheduled principal involves a transfer of the amount from the original loan to a new loan. Arrears of interest on long-term debt are shown separately, as part of short-term debt. Flow data Flow data are the sum of certain flows over a specified period of time, e.g., from January 1, 1999 to December 31, 1999.
Commitments
Commitments are the sum that the creditor has agreed to lend. Supplements to the original amount are included in commitments.
Disbursements
Disbursements are the amount of a loan utilized in the accounting period.
Interest
Interest is the amount paid to the lender during the accounting period as compensation for use of his capital.
Amortization
Amortization is the principal repaid during the designated accounting period.
Total debt service payments
Total debt service payments are the sum of amortizations and interest payments.
Cancellations
Cancellation is the annulment of undisbursed loan balances (- should not be mixed with debt-cancellation which is the cancellation of disbursed debt).
Write-offs
Write offs are annulment of disbursed debt.
Restructurings
Restructurings are the amounts of principal or interest payments due but deferred, rescheduled, refinanced or exchanged as a result of a debt-restructuring agreement; these may be rescheduling or debt exchange arrangement. Debt relief as debt cancellation is treated as a write-off. Cumulated amounts are shown in a manner comparable with other flow data. Other derived indicators Key relationships can be derived from the above definitions.
Availability of finance
The available funds from a loan at any moment of time are equal to the original loan commitment amount plus any supplementary commitments, minus total disbursements and cancellations to date. This sum is often referred to as the "pipeline" of finance. Each loan record should show this relationship over time.
Loan commitment / debt outstanding
This relationship is derived directly from the previous two definitions. The loan commitment value is the sum of disbursed debt plus the undisbursed balance. This is equal to the loan commitment value less write-offs, cancellations, amortization and rescheduled principal.
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