6.2 Events and Accounting Entries for Discount Accrual
When defining the accounting entries for the Finances 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 6-3 Accounting Roles
| Accounting Role | Acquisition Type | Product Type | Description |
|---|---|---|---|
| EIMDISCRIA | Discount | Asset | Effective Profit Based Discount To Be Accrued |
| EIMDISCINC | Discount | Asset | Effective Profit Based Discount Accrued Till Date |
| EIMPREMPIA | Premium | Asset | EIM Premium paid in advance |
| EIMPREMEXP | Premium | Asset | EIM Premium Expense |
| EIMINTADJREC | Par | Asset | EIM Profit Adjustment Receivable |
| EIMINTADJINC | Par | Asset | EIM Profit Adjustment Income |
The Amount Tags for the YACR event:
Table 6-4 Amount Tag - Description
| 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 | Profit adjustment amount |
| EIMPREM_ADJ | Premium accrual refund amount |
The following entries should be maintained for the YACR event for assets (IBC
contracts):
Table 6-5 Accounting Roles
| 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 |
Note:
OLE_LINK2 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:
Table 6-6 Accounting Role Description
| Accounting Role | Description |
|---|---|
| component_RIA | Charge amount Received in Advance |
* The component will be replaced by the appropriate Charge Rule.
Table 6-7 Amount Tag Description
| Amount Role | 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.
Table 6-8 Accounting Roles
| 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 | Credit |
| CUSTOMER | <Charge rule>_PREM | Debit |
Along with the normal accounting entry setup for the LIQD event, you must also maintain
the following accounting entries:
Table 6-9 Accounting Roles
| Accounting Role | Amount Tag | Dr/Cr |
|---|---|---|
| EIMDISCRIA | EIMDISC_ADJ | Debit |
| CUSTOMER | EIMDISC_ADJ | Credit |
Parent topic: Define Discount Accrual Classes