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Portfolio Analysis & Management System
Discounted Cash Flow Analysis
The Definitive Book & Software System for Present Value or Discounted Cash Flow Analysis
16401 Wildwood Court
Punta Gorda, FL 33982
Telephone: Phil Tirino (845) 656-1273
FAX: (845) 215 0003
August 4, 2018
We have completed a beta version of our accounting system. We are in the process of completing a new website. More to come.
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Saturday Oct 24, 2015
You can now preview the book and link to amazon.com/books to purchase the book alone for under $ 30.00.See pricing page for details.
Thursday Dec 3, 2015
Our EXCEL listed amortization capability (vs hard copy paper) is nearing availability and will be incorporated into PAMS-DCF as a standard feature.. This will permit easy customization of the presentation of amortization reports and easy transfer into other systems. It is being developed as part of the larger accounting capability function. It will also permit individuals to develop their own accounting systems custom fitted to their needs assuming they are trained in EXCEL. Wow! Talk about power and versatility!
Wed, July 20, 2016:
We have been developing an accounting capability as noted in a few posts back. I am happy to say that it is progressing nicely. The article on ASC 842 is taking a backseat to the system development as developing the accounting capabilities needed for the new lease reporting on both the lessor, and more importantly the lessee side, will directly influence the article. As the lessee is now being bound to the Albatross of Present Value analysis, and is being asked to essentially maintain a "Lessee Portfolio" or more likely two portfolio's of all leases/loans it is obligated to, our accounting system is being designed to be used by both sides of the transaction. Interesting concepts of using a "Portfolio Approach" at least in the initial booking and the ability to compare individual deal bookings to a portfolio approach are complicating the development somewhat but are showing promise for making the job more doable. Bear with me folks, both the accounting capability and the article on ways to approach the challenge will be done shortly. If anyone has any insights into what should be included in a workable system, let me know. The system is being designed to do financial reporting, not billing and collections. That wheel of accounting is already addressed by myriad accounting systems for big and small companies. Our system is designed to provide the balance sheet and P&L reporting of the lease/loan periodic accounting figures required while remaining flexible for easy change in the portfolio composition. We are excited about getting it done.
Monday, March 27, 2017:
All our resources (me) are temporarily diverted to tax matters...see you all after 4/15 for a new direction on this site.Completion of the accounting module and other add-on features.
Monday, Sept 28, 2015
Please see out shop talk page for a discussion on advance vs. arrears". payments.
Monday, October 17, 2016:
I am pleased to announce the publication of our article on the new ASC 842 on Lease Accounting. Please go to http://www.monitordaily.com/article-posts/lessee-side-balance-sheet-reporting/ to read the article. Thanks to the people at the Monitor Daily for this boost.
The accounting package add-on is almost complete and we are trying to make the system serve as both a lessor model and a lessee model that will address all of the reporting requirements under ASC 842. I am continuing to develop into the new accounting model a strong "portfolio" approach option to the lessee side reporting aspect.
Monday, May 30, 2016:
Memorial Day is a day we should all reflect on. I am giving thanks to our Vets for their sacrifices. I am also half way through an article I hope to have published in various magazines. It is a hands on review of the new leasing rules and a presentation of an example approach to handling the daunting job companies are facing. I am becoming increasing convinced, that at least for the initial catch-up booking, the only practical approach is using the portfolio concept. Read the article to come.
Tuesday June 21 2016
The new ASC 842 may soon become known as the "ASC from Hell", or something like that as my first review foretells a nightmare potential in the initial implementation. I have gone back to the drawing board. After writing a 3,000 word plus article with 6 pages of examples and then finding out 2,000 maximum is all any publisher will look at, I scraped the whole approach and am now starting on a much abridged version. I realize what I had written was more like a home study course and not an article. The examples and revelations are still good. Give me a few more weeks folks to wrap new text around the examples.
Monday May 29, 2017, Memorial Day:
We honor our fallen and wounded that have bought our freedoms with their blood.
Our accounting package has grown in scope and we are meeting the challenge head on. We are already sounding like the "any day now" advertisement so I will avoid a prediction date. Suffice it to say we are close and working hard to close the deal.
Monday, May 16, 2016-Accounting system is ready and immediate (same day) present value analysis is offered.
We have completed the output of the amortization reports to excel files with great results in accuracy and portability. The accounting system is ready for use.As importantly, we offer immediate transaction present value analysis via e-mail reports after completing a transaction or lease outline. We can analyze and produce amortization schedules and booking entries for most any transaction and e-mail the results in EXCEL file format for same day use in preparing financials. We can do this at reasonable cost. No need to learn a system, or dedicate someone to learning PV analysis. We will do it quickly and cost effectively. If the cash flow is complex, our tools will handle it and give you hard and soft copy records. Should you need a growing portfolio set up, we can do that and change it as transactions are added, keeping you current at all times and providing you with the needed computer and hard copy reports compatible with EXCEL. Call us .at 845 656 1273.
Monday February 8, 2016-Accounting System coming soon!
We have very neatly formatted amortization schedules going to excel files directly. We are cleaning up rounding differences and should be ready to publish as part of the standard package shortly Next will be carrying the reports directly to an accounting sheet for cumulative accounting reporting of earned income , remaining unearned income and remaining principal balances. This will effectively permit both balance sheet reporting and income reporting of the key eliminates of investment receivables. We have also cleaned up readability of reports by eliminating sometimes confusing negative signs preceding some columns .
August 13, 2017"
The data base is laid out and tested and we are moving on to accounting reports, journal entries and deal termination management with strong support for lessee reporting under the new rules. Where did the summer go?
Monday, August 31, 2015
We will begin a brief discussion on "advance versus arrears" loan payments and expand the discussion out somewhat to cover treatment of down payments when analyzing cash flows. See the discussion and examples coming soon under "shop talk".
Thursday August 13, 2015.
We demonstrated the system in the NY area at two locations. We returned to home base yesterday. After considerable thought, we have concluded that our book should be listed as a stand alone item on AMAZON for a modest price. It involves the loss of some control over the books circulation, but we are of the belief that the benefits outweigh the risks. We are planning to offer the book alone at $29.95. It is a walk through from beginner to expert in the area of Discounted Cash Flow and includes a good glossary. It is easy to read and very empowering for those new to the art. Full credit will be given for the purchase price of the book should the software be purchased at some latter date.
It has occurred to us that in our shop talk about extended yield methods that we did not point out the fact that under the traditional sinking fund method, (AKA Standard Sinking Fund Method) earnings are reported on a much more even basis for all years the investment is outstanding (see Exhibits A,B,C -3). That fact when combined with all the other virtues of the traditional method seems to make it a prime candidate for consideration as a method for reporting lessor leveraged lease interest income. It has the virtue of preserving the after tax considerations of leveraged lease accounting and helps provide the impetus (though not as great as using the MISFM-Legacy due to the loss of up fronting income affecting early years EPS) to continue doing leveraged leases should the tax appetites and market ever return for what ever reason(s). Where the FASB is going to land is anybody's guess??? Retaining the MISFM-Legacy is certainly an option, though an unwieldy one, to be sure. I must repeat what I said on my blog referring to the MISFM-Legacy...."Born of Ignorance, lived in Glory and should die in ignominy". Perhaps having up fronted all the income in leveraged deals done early on has helped lead some companies to consider leaving the business for more fertile grounds as what is left can't support the carrying costs. Does anyone have any companies in mind? The ole matching costs against revenues issue is rearing it's ugly head. What goes around, comes around! .........Just saying.
FASB 13 in serious hot water
As of this immediate minute, FASB13 I believe is still the official guide, but things are changing quickly so I will not say that for sure. Whatever is being taught here is still valid even if FASB13 is modified. Our discussion forum is still on the mark. That we can say for sure. I now refer to the MISFM as a "legacy" method.
It seems that leveraged lease lessor accounting is under serious threat of change. The talk is about doing away with any after tax yield methods to distribute income including the MISFM (a method which on close examination we have never been able to comprehend or justify) is rampant.
Whatever the accounting income approach may be, DCF is still needed to analyze the transactions. As a segue into financial analysis, not so much. The door will be nailed close under the new rules being examined. Just because the MISM-Legacy has issues (see our discussions under shop talk) there is no need to throw out the entire concept of reporting economic reality as close as possible. In leveraged leasing, that includes after tax cash flow analysis. Throwing the baby out with the water? Perhaps not the best change possible. Very simplistic thinking is prevailing! Definitely a step backwards for the art of accounting and anti-productive as far as new business is concerned. Fragmenting the leveraged lease reporting and eliminating the tax impact in the reporting is, in my view, not a step forward towards better reporting. Yes it may make comprehending and reporting easier, but that is at the expense of ignoring entirely one of the main economic reasons for doing leveraged leases.
Only PAMS-DCF gives you the ability to nail any situation down quickly and easily. Define the flow, save it, and run..
PAMS' "DIRECT READ" Portfolio features applied quickly for rapid response
PAMS-DCF undertook determining the adjusted rate of return in a transaction that changed as it progressed due to missed payments. By rolling out via the payment set routines the fixed payment daily billing initial terms for a two year period and, then adjusting out via EXCEL the non-payment days which numbered about 20 , PAMS-DCF was quickly able to determine the actual IRR to the date of review. Within two attempts, a final payment was determined to provide for the clients desired yield to facilitate ending the transaction. This was readily doable because of PAMS-DCF direct read capabilities built into the portfolio dashboard. Minimal keypunching was required. A summary portfolio report served to capture the flows on paper and analyze the yield while the proof of yield amortization schedules ran out the flows and broke down the payments by interest and principal segments. The transactions details were as usual captured in EXCEL for easy retrieval and modification either through the PAMS front end or directly via EXCEL.There were 729 flows plus a final settlement flow in the 2 year deal of which about 20 payments were missed. Piece of cake!
A recent and somewhat unusual assignment requested PAMS determine the amount of money that would compensate a Home Owners Association for the permanent loss of annual Homeowners Dues. This was to result from the potential sale of property to an exempt government entity, such as a County. By state law counties are supposedly exempt from association fees.
After being given the maximum contractual period recognized under the law of 99 years as the desired term, PAMS was asked to determine the up-front or present value that would provide with investment earnings, for the fees over 99 years. Based on current budgeted expenses, researched inflation rates and researched probable earnings rates, PAMS was quickly able to read in 100 different cash flows developed via formulas in Excel, seed Present Values, and determine an earnings rate at various levels. PAMS produced amortization schedules and cash flow schedules for the various rates under discussion and various terms needed for negotiation and review. Minimal keypunching was required using EXCEL formulas and worksheets, and the direct read features of PAMS-DCF portfolio add-on option to analyze 100 varying flows and segmented shortened periods using different present values to determine desired earnings/present value targets.
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