In the SWIFT MT940 format specifications, there are four fields for balances: F60a Opening Balance, F62a Closing Balance (Booked Funds), F64 Closing Available Balance (Available Funds) and F65 Forward Available Balance. The aim of this article is to explain the meaning of each balance field and how they are calculated.
This will be illustrated through SWIFT MT940 statements sent to a financial institution authorised by account owner to receive it.
Two MT940 are sent to Midland bank authorized by Transglobal Corp to receive it. Balance fields are provided in each SWIFT MT940 format received. Considering the two messages is helpful to better understand how the balances are computed.
Balances in the first SWIFT MT940 format
The table below contains the fields that are transported in the first SWIFT MT940 format. For format of balances and line statements fields, please refer to the previous article or to the SWIFT MT940 format specifications. The main goal here is to explain how the balances are calculated. This account statement is sent on september 10.
We see something pretty interesting about the balances. Funds can be booked on a account with different value dates. When funds are booked with a value date in the future, the funds become available only at value date. So the account owner cannot spend the money before value date.
Balances in the second SWIFT MT940 format
The table below contains the fields that are transported in the second SWIFT MT940 format. This second statement contains only one debit entry, but it affects the other balances as you can see below. This account statement is sent on september 11.
In conclusion, Opening and Closing balances are given for the statement date, but computed irrespective of the value dates. Forward available balances are always considered at a specific value date. To get the closing or forward available balance for a date, funds available after that date must be deducted from the total closing balance.
Simple amounts were used to make things easy and help you to follow the calculation of the different balances. If something is still unclear, please send your question through a comment. We will be happy to support.