1. Bills and Collections User Guide
  2. Define Discount Accrual Classes
  3. Discount Accrual
  4. Define a Discount Accrual Class

6.2.2 Define a Discount Accrual Class

This topic provides the systematic instructions to Define the Discount Accrual Class

A Discount Accrual fee class specifies the accrual parameters for interest and charges.

Define the attributes of a Discount Accrual class in the Trade Finance Discount Accrual Class Maintenance screen.

Specify the User ID and Password, and login to Homepage.
  1. On the Homepage, type DADTFACL in the text box, and click the next arrow.
    The Trade Finance Discount Accrual Class Maintenance screen is displayed.

    Figure 6-1 Trade Finance Discount Accrual Class Maintenance


    Description of Figure 6-1 follows
    Description of "Figure 6-1 Trade Finance Discount Accrual Class Maintenance"
  2. On the Trade Finance Discount Accrual Class Maintenance screen, click New and specify the details.
  3. Click Save to save the details or Cancel to exit the screen.
    For information on fields, refer to: Table 6-1.

    Table 6-1 Trade Finance Discount Accrual Class Maintenance - Field Description

    Field Description
    Class Code This is a Mandatory Field

    Specify a unique identifier for the class.
    Description Enter a brief description for the class. A description would help you easily identify the class.
    Module Specify the module to which the class is associated.
    Module Description A brief description of the module is displayed here.
    Accrual Preferences This is a Mandatory Field

    When building a Discount Accrual fee class, you define the following attributes:
    Discount Accrual Required Specify whether Discount accrual should be performed for the class.
    Accrual Frequency Specify the frequency at which Discount Accrual should be performed. This can be either Daily or Monthly. For monthly accruals, the Discount Accrual will be done on the last day of the month.
    Acquisition Type The Acquisition Type determines whether the initial cash flows for a C contract with more (Premium) or less (Discount) or equal (Par) to the bill amount.
    The Acquisition Type determined by the cash flows of interest, charges and fees for which Consider as the Discount option is checked. The drop-down list comprises of the following values:
    • Par
    • Par/Discount
    • Par/Premium
    • Par/Discount/Premium

    If the incoming cash flows of all the above components are greater than outgoing cash flows considering Incoming flow as Positive (In case of bills), the acquisition type considered is Discount.

    the incoming cash flows of all the above components are less than outgoing cash flows considering Incoming flow as Positive (In case of bills), the acquisition type considered is Premium.

    If the incoming cash flows of all the above components are equal to outgoing cash flows considering Incoming flow as Positive (In case of bills), the acquisition type considered is Par.

    Note:

    The acquisition type of a contract can change from premium to par/discount or otherwise depending on the charges getting liquidated during the life cycle of the contract.
    Handling of Foreclosure Specify how foreclosures for the contracts using the class is handled. Opt for the completion of pending accruals, or refund. In case the Acquisition Type is Par, there are no refunds. Only the pending accruals are completed.
    Day Count Method Details Specify the day count methods for each currency using the class. Define the day count methods for both the Numerator and the Denominator

Parent topic: Discount Accrual