FAM No. 2005-18 (Financial Current Value of Funds Rate)
December 22, 2005
FINANCIAL ADMINISTRATION MEMORANDUM 2005 – 018 (II.J)
To: Bureau Assistant Directors, Administration
Chief Executive Officer, National Business Center
Bureau Finance Officers
Finance Officer, Financial Management Services
Director, Office of Acquisition and Property Management
From: Mona Williams /s/
Focus Leader, Asset and Debt Management
Office of Financial Management
Subject: Financial Current Value of Funds Rate
Attached is a copy of the Federal Register dated November 1, 2005 Volume 70, No.
210, page 65980, which contains the Current Value of Funds Rate (CVFR) for
calendar year 2006. The CVFR is 2 percent for the period beginning on January 1,
2006 and ending on December 31, 2006.
The CVFR is required for use in the following financial calculations:
• Assessing interest charges for outstanding debts on claims owed to the Federal
Government.
• Determining whether to accept cash discounts by paying early. Prompt Payment
rules require agencies to analyze the total costs and total benefits to the
Government of accepting a discount and paying early. The discount conversion
formula is available at www.fms.treas.gov/prompt/formulas.html.
• Determining when to pay purchase card invoices when a rebate is offered by the
credit card issuer. Prompt Payment rules require agencies to analyze the total
costs and benefits to the government of taking advantage of a credit card
issuer’s rebate offered for early payment. A spreadsheet at
www.fms.treas.gov/prompt/rebate.html automatically calculates when agencies
should pay credit card invoices, based on the daily rebate basis points and the
daily CVFR basis points.
Should you have any questions on this subject, please contact Jonathan House on
(202) 219-4096.
Attachment (HTML, PDF)
Prior Financial Administration
Memorandums on this Subject:
No. 2005-02 (II.J), February 3, 2005 - Active
No. 2003-25 (II.J.), December 11, 2003 - Inactive
