Creating Model Definitions

This chapter provides an overview of model definitions and discusses how to create model definitions.

Understanding Model Definitions

Models enable you to specify at a very high level how you want to organize products or ledger accounts for purposes of analysis and performance management. You create model IDs in the EPM Warehouse. After creating the model IDs, you define the model for the FSI application specifying how the application assigns the model IDs to its definitions and processing rules.

Model definition is a onetime setup that specifies the product trees, balance sheet trees, or income statement trees defining the balances that you are processing, and their cash flow characteristics, such as accrual basis and term structure ID. On the Model Definition pages, you also indicate whether you want to net risk weighted capital allocations from balances for transfer pricing purposes. You specify the dimensions (product, channel, department, operating unit, or customer) by which you want to group the calculations when reconciling ledger balances with product detail balances.

Setting Up Model Definitions

This section discusses how to:

• Create model definitions.

• Define engine settings for model definitions.

Pages Used to Create Model Definitions

Creating Model Definitions

Access the Model Definition page.

To set up model ID definitions:

1. Set up tree definitions.

   1. Select a time set code to indicate the time buckets that help create the reprice or maturity buckets for stratified pooled data.

   2. Select a product, balance sheet, and income statement tree. These trees are used to process rules for products, the balance sheet, and the income statement (respectively) according to the tree levels that you define in the warehouse.

2. Set up the cashflow characteristics in the Cashflow Generator Settings group box.

   1. Define the level of FTP accrual basis. Options are: Model Level, Instrument Level, or Product Level, then define an accrual basis for FTP cashflows. Options are: 30/360, 30E/360, 30N/360, Actual/360, Actual/365, and Actual/Actual.

   2. If you want to include estimated prepayments (from the behavioral model) in the cash flow calculations, select the Use Behavioral Models check box. This check box enables all behavioral models and the service fee model.

   3. Similarly, select the Use Error Process Model check box to use error process models.

3. In the Trace Settings group box, control the amount of cash flow detail information (if any) that is written to log files in the Cash Flows Trace field.

   Valid values range from 0-No Trace (for production use) to 8-Complete (for debugging purposes) with increasing detail.

   Note. Specifying a Trace Settings field value of 8-Complete could compromise performance capability significantly while processing cash flows.

4. Specify the path where the cash flow trace files is created. Do this for client or server paths. This is a required field to set up when you specify any option other than No Trace in the Cash Flows Trace field. Otherwise, processing cannot commence.

5. In the Attributes Option field, set the pricing index type for the model.

   Pricing indices drive the new interest rates generated by processes that use the Cash Flow engine, such as the Financial Performance Measures (FPM) engine. PeopleSoft Enterprise Funds Transfer Pricing also makes extensive use of this functionality. The option that you select here determines whether the Cash Flow engine generates pricing indices for pricing events on the product or instrument level. Depending on the selection, pricing indices for pricing events are set up on the Financial Product Definition component or the Financial Instruments Entry component. Your selection applies to processing of both historic and forecast scenarios.

   Note. A pricing event is any time a pricing index is used to provide an interest rate to an instrument or product. Pricing events include pricing, repricing, teasers, and rate locks. These events are usually based on a pricing index.

   Options are:

   Instrument Level	Select to have the Cash Flow engine create pricing indices for all pricing events from instrument data in the FI_INSTR_F00 table. Set up instrument data on the Financial Instrument Entry component.
   Product Level	Select to have the Cash Flow engine create pricing indices for all pricing events from product data in the FI_PRODUCT_SEQ table. Set up product data on the Financial Product Definition component.
   Attributes File	Select to have the Cash Flow engine create pricing indices for all pricing events from the cash flow attributes configuration file cfattributes.ini. This file enables you to specify the field and transaction name, which is associated to a table, where the Cash Flow engine obtains the data to assign cash flow attributes their values.

6. If in the Attribute Options field you selected Attributes Files, specify in the Attributes Path field the location of cash flow attributes configuration file cfattributes.ini.

7. Select the Save Cash Flows To Disk to save cash flow information to disk. Processing functions only when running the Cash Flow engine.

Defining Engine Settings for Model Definitions

Access the Engine Settings page.

To specify engine setting for the model ID:

1. The FTP Risk-Weighted Capital group box is used to give instructions to the PeopleSoft Enterprise Funds Transfer Pricing (FTP) application on transfer pricing risk-weighted capital. Set up the fields in this group box:

    

   1. When the Net Balances of RWC field selected, this check box tells the FTP processes (FTP_INST, FTP_ACCT, FTP_TRPS, FTP_FPOOL) to net allocated capital from the balances that it is processing. It also activates the remaining fields in the group box.

   2. Select a Cost of Funds Table. This specifies that FTP calculates an FTP charge for the allocated capital amount, based on this cost of funds rate. The resulting cost of allocated capital is stored in a standard output table, with an FTP_SEQ_TYPE code of RWC.

   3. Indicate the point on the yield curve when calculating the cost of allocated capital rate in the Term of Capital field.

   4. Define to which PF (Performance) ledger account the funds transfer charge is posted in the Ledger Event Code field.

2. In the Reconciliation Process group box, indicate whether you want to group the calculations across dimensions when reconciling ledger balances with product detail balances. To do this, select the Calculate Balance check box for the appropriate dimensions: Channel ID, Customer ID, Department, Operating Unit, Product ID. The FI_RECON and FI_RCN_BS engines use these dimensions during reconciliation.