Methodology Options determine how the program makes calculations. The default settings are what EVP Systems considers the best values, and changing them will result in sometimes subtle evaluation pricing differences.
Days for Stale Price sets the number of days before a price is considered “stale” and not used in the reports. The default is “30”, so if the program retrieves a price that is 35 days old — either because the security has stopped pricing or because it is very thinly traded — it will be shown as “N/A” on the report.
Mortgage-Backed Options should be set to “Input Face Amount” if you will be entering the face-amount of a mortgage-backed security into the program as its par value, and “Input Remaining Principal” if you will enter the remaining principal as-of the evaluation date as par.
Coupon on Evaluation Date, set to “Comment”, will include a note on the report if a coupon has matured on the evaluation date, but no additional value. Setting it to “Amount” will add the amount of the matured coupon to the accrual column on the report. (This setting defaults to “Comment” because a matured coupon is paid to the holder on the day it matures, moving the value out of the portfolio and into the portfolio owner’s cash holdings.)
Common Trust Fund Days determines if interest is accrued for common trust funds during actual days, or only on trading days.
Extra Day Interest Accrual, when set to “Default”, does not include the evaluation date as a day of interest accrual. Set to “Extra Day”, accrual calculations include the evaluation date.
Primary / Composite Pricing determines what pricing type the program will use.
Primary prices are quoted by the primary exchange of a security, its “home.” IBM, for instance, is traded on the New York Stock Exchange, so primary prices come directly from there. Composite prices are calculated from prices quoted by several different exchanges — the primary exchange for the security, as well as other places it’s traded. Because quotes are determined by actual trades, composite prices can be slightly different that primary prices, depending on when and at what price the last trade happened for the security on each exchange.
For this setting, “Default” uses primary prices for evaluations on or after April 30, 2017, and composite prices before, to match historically evaluated reports. “Primary” always uses pricing from the primary exchange and “Composite” always uses composite pricing.
While composite pricing is more commonly available — especially on the Internet, via free websites — EVP Systems favors primary pricing because it is explicitly preferred by Treasury Regulation § 20.2031-2 (b) 1.
Default User-Defined Values determines the way user-defined values are treated by the program by default; they can also be changed from this default on a lot by lot basis. “Total for Lot” means that manually entered values (via Adjust Inventories → Edit → Use User-Defined Values) are the total value for the lot, independent of what shares or par value is entered for it in the main grid. “Per Shares” means that the manually entered value is multiplied by the number of shares to determine the total value. “Per Par” means the manually entered value is multiplied by the par value entered for the lot, and then divided by 1,000. “Per Security Type” means that the program will automatically select “Per Shares” or “Per Par” behavior, as appropriate, by the type of security the lot is — for instance, it will use “Per Shares” for stocks, and “Per Par” for bonds.