Automatic Accrual of Commission

3.2.33 Automatic Accrual of Commission

When the batch process is run as part of EOD, the commission components of the active (authorized and not yet liquidated) Islamic LC contracts is accrued. Accrual is usually performed from the last liquidation date to the current date. Since commission is calculated for rounded periods, the final accrual on the expiry date is for the full rounded period. When the accrual is done, the relevant accounting entries for the accrued components is passed. The internal accounts is updated with the accrual related details. Typical accounting entries that are passed include:

Table 3-15 Collected in Arrears

Role	Role Description	Role Type	Amount Tag	Dr/Cr
CENC	Commission earned not collected.	Asset	Accrual amount	Dr.
COMM_INC	Commission earned	P&L	Accrual amount	Cr.

Table 3-16 Collected in Advance

Role	Role Description	Role Type	Amount Tag	Dr/Cr
COMM_RIA	Commission received in advance.	Asset	Accrual amount	Dr.
COMM_INC	Commission earned	P&L	Accrual amount	Cr.

The level at which accrual entries are passed depends on your definition of branch parameters. To recall, the accrual entries is configured to be passed either at the contract level or the product level.

Either way, the details of accruals for each contract is available in the Accrual Control List. The details of this report, the procedure for generation and the contents are discussed in the chapter on Reports.

Parent topic: EOD and BOD Batch Jobs