6.2.3.1 Events and Accounting Entries for Discount Accrual
While defining the accounting entries for the Loans and Bills modules you must identify the events and accounting entries that are required for Discount Accrual fee accounting. One of these is the YTM based Discount Accrual (YACR) event.
It is meant to indicate the periodic Discount Accruals for the contract. The
Accounting Roles that should be associated with the event YACR are
Table 6-2 Accounting Roles
| Accounting Role | Acquisition Type | Product Type | Description |
|---|---|---|---|
| EIMDISCRIA | Discount | Asset | Effective Interest Based Discount To Be Accrued |
| EIMDISCINC | Discount | Asset | Effective Interest Based Discount Accrued Till Date |
| EIMPREMPIA | Premium | Asset | EIM Premium paid in advance |
| EIMPREMEXP | Premium | Asset | EIM Premium Expense |
| EIMINTADJREC | Par | Asset | EIM Interest Adjustment Receivable |
| EIMINTADJINC | Par | Asset | EIM Interest Adjustment Income\ |
The Amount Tags for the YACR event:
| Amount Tag | Description |
|---|---|
| EIMDISC_ACCR | Net Discount Accrual amount for the processing day |
| EIMDISC_ADJ | Discount Accrual refund amount |
| EIMPREM_ACCR | Net premium accrual amount for processing day |
| EIMINTADJ_ACCR | Interest adjustment amount |
| EIMPREM_ADJ | Premium accrual refund amount |
The following entries should be maintained for the YACR event for assets (BC
contracts):
| Accounting Role | Amount Tag | Dr/Cr Indicator |
|---|---|---|
| EIMDISCRIA | EIMDISC_ACCR | Debit |
| EIMDISCINC | EIMDISC_ACCR | Credit |
| EIMDISCRIA | EIMDISC_ADJ | Debit |
| CUSTOMER | EIMDISC_ADJ | Credit |
| CUSTOMER | EIMPREM_ADJ | Debit |
| EIMPREMPIA | EIMPREM_ADJ | Credit |
| EIMINTADJREC | EIMINTADJ_ACCR | Debit |
| EIMINTADJINC | EIMINTADJ_ACCR | Credit |
| EIMPREMEXP | EIMPREM_ACCR | Debit |
| EIMPREMPIA | EIMPREM_ACCR | Credit |
The account head mapped to the accounting role EIMDISCRIA and account heads mapped to the subsystem specific RIA (Received in Advance) accounting roles should be maintained as the same account.
For Discount Accrual, you must also maintain the following accounting set-up
for the Charge Liquidation event. The charge liquidation event is the event in the life
of a bill contract at which the charge is going to be levied; you would have specified
this while building a charge class or while attaching a charge class to the product.
This is in addition to the normal accounting set-up that you would define for the LIQD
event.
| Accounting Role | Description |
|---|---|
| component_RIA* | Charge amount Received in Advance |
* The component is replaced by the appropriate Charge Rule
| Amount Tag | Description |
|---|---|
| component_DISC* | Charge Amount to be discounted |
| component_PIA | Charge amount paid in advance |
* The component will be replaced by the appropriate Charge Rule. The
following entries should be maintained for the charge liquidation event.
| Accounting Role | Amount Tag | Dr/Cr |
|---|---|---|
| <Charge rule>_RIA | <Charge rule>_DISC | Credit |
| CUSTOMER | <Charge rule>_DISC | Debit |
| <Charge rule>_INC | <Charge rule>_LIQD | Credit |
| CUSTOMER | <Charge rule>_LIQD | Debit |
| <Charge rule>_PIA | <Charge rule>_PREM | Debit |
| CUSTOMER | <Charge rule>_PREM | Credit |
Along with the normal accounting entry setup for the LIQD event, you must
also maintain the following accounting entries:
| Accounting Role | Amount Tag | Dr/Cr Indicator |
|---|---|---|
| EIMDISCRIA | EIMDISC_ADJ | Debit |
| CUSTOMER | EIMDISC_ADJ | Credit |
Parent topic: Associate Discount Accrual Components to Products