Since both the Netting and Summing of fees involve an account's earnings allowance I'll start there.
Earnings Allowance is the dollar equivalent of the credit rate earned for the balances held in your account. However, this earnings allowance can only cover analyzed charges so the netting or summing of fees will only involve these particular service charges.
When the earnings allowance of an account is more than the analyzed charges due for that same account, the account has an excess earnings allowance balance.
When the earnings allowance of an account is less than the analyzed charges due for that same account, the account has a deficit earnings allowance balance.
Whether an excess or a deficit, this balance is shown as either Excess/Deficit Earnings Allowance or Excess/Deficit Earnings Allowance-Adjusted.
What's the difference between Ex/Def EA and Ex/Def EA Adj?
Ex/Def EA considers any adjustments to Earnings Allowance or Analyzed Charges.
So...
Earnings Allowance
less Analyzed Service Charges
Ex/Def Earnings Allowance
No adjustments? Then Ex/Def EA Adj should equal Ex/Def EA.
Adjustments? Then the difference between Ex/Def EA and Ex/Def EA Adj should equal the total adjustment amount.
What is Netting Fees versus Summing Fees?
If a financial institution allows a company to apply excess earnings allowance from one account to the deficit earnings allowance of another account, this is called Netting Fees.
If a financial institution does not allow a company to apply excess earnings allowance from one account to the deficit earnings allowance of another account, this is called Summing Fees.
Both of these scenarios involve two balance:
Excess/Deficit Earnings Allowance-Net Settlement Period to Date; the last place to hold a sign to indicate an excess or a deficit earnings allowance.
Excess/Deficit Earnings Allowance Due This Statement; indicates whether a Netting or Summing relationship exists since all excess balances zero out leaving only deficits.
Whether a bank does or does not allow netting, the excess for an account will appear as a positive value in Excess/Deficit Earnings Allowance-Net Settlement Period to Date while a deficit value will appear as a negative value.
If the bank does not allow netting, the excess for an account will appear as $0.00 in Excess/Deficit Earnings Allowance Due This Statement. But, a deficit for an account will appear as an absolute value in Excess/Deficit Earnings Allowance Due This Statement since this balance can only carry a positive value.
Whether a bank does or does not allow netting, the excess for an account will appear as a positive value in Excess/Deficit Earnings Allowance-Net Settlement Period to Date while a deficit value will appear as a negative value.
Excess/Deficit Earnings Allowance Due This Statement tells the relationship...
Most know that numbers can tell a story; in this case, so does how those numbers appear in certain balances. Have an Account Analysis question? Send me an email girlmeetaa@gmail.com
Happy Analyzing!
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