6. System Accounts

System accounts are the lowest level at which accounting entries are posted in Oracle FLEXCUBE. The system stores FGL balances at this level. System accounts help you get a break up of the GL balances which provides the details on the various attributes of a transaction. You may configure all such parameters for the generation of system accounts in Oracle FLEXCUBE.

6.1 System Defined Elements

This section contains the following topics:

6.1.1 Invoking the System Defined Elements Details Screen

You need to set certain parameters called ‘System Defined Elements’ for generation of system accounts. You can map a system-defined element to an actual transaction using ‘SDE Maintenance Detailed’ screen. Oracle FLEXCUBE collects the data required for system account generation from the details maintained on this screen.

You can invoke this screen by typing ‘EGDSDMST’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you need to capture the following details:

Element ID

Select an element ID from the dropdown menu. However, if the element type is chosen as transaction attribute, you may maintain a maximum of 30 elements in FGL. Similarly, you may maintain a maximum of 20 elements of transaction MIS code and 10 elements of customer MIS code.

Element Type and Description

For an FGL, you may set one of the following system defined element types:

You can select the appropriate element type from the above. Based on the selection, the system displays the description.

Element Code

Enter a unique code to identify the element that you are maintaining. You can modify the element code for transaction attributes. However, if you are maintaining an MIS code, the system defaults the MIS class as the transaction code. In that case, you cannot modify it. However, you may modify the description.

Data Type

Specify data type to be used. You can select one of the following from the dropdown menu:

Max Length

Specify the maximum number of characters that can be used in the attribute. However, for MIS attributes, you can set this length to a maximum of 9.

Minimum Length

Specify the minimum number of characters to be used in the attribute.

Range Required

Check this option to capture the value in range of buckets. When you define an attribute of type ‘Number’ or ‘Date’, you may configure the system to consider the value in ranges (buckets).

Active

Once the SDE is mapped, the system checks this option and updates the status.

Based on the selected attributes and MIS codes, Oracle FLEXCUBE generates the system accounts. These system accounts belong to a specific GAAP.

6.2 SDE Classes

This section contains the following topics:

6.2.1 Invoking the SDE Class Details Screen

You can define System Defined Element Class, which consists of various SDE codes in the ‘SDE Class Details’ screen.

You can invoke this screen by typing ‘EGDSDCLS’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you need to capture the following details:

Class Code

Specify a unique code to identify the class.

Class Description

Enter a brief description on the nature of the class.

Element Class Type

You need to specify the type of SDE class that you are defining. Select a type from the dropdown menu. For FGL, you may define the following element class types:

Element Code

Specify the element codes that you wish to add to the class. The option list displays respective valid element codes maintained in the system. You can select the appropriate one.

You may add more rows to the list of element codes using add icon.

Element Description

The system displays the description based on the element code selected.

Range Class

Specify a range class to which the selected element code belongs. Select the appropriate one form the option list.

6.3 Number and Date Range Classes

This section contains the following topics:

6.3.1 Invoking the Number Range Class Maintenance Screen

You can define number range classes and date range classes for FGLs in Oracle FLEXCUBE using the ‘Number Range Class Maintenance’ screen. To define a number range class, invoke ‘Number Range Class Details’ screen.

You can invoke this screen by typing ‘EGDNORNG’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you can capture the following details:

Class Code

Specify a class code to identify the number range class.

Class Description

Enter a brief description on the nature of the number range class.

Add the bucket IDs to the list using add icon button. Further, enter the ‘From Number’ and ‘To Number’ to indicate the number range.

6.3.2 Invoking the Date Range Class Details Screen

In order to define the date range class, invoke ‘Date Range Class Details’ screen. You can invoke this screen by typing ‘EGDDTRNG’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Enter the following details:

Class Code

Specify a unique code to identify the date range class.

Class Description

Enter a brief description on the nature of the class.

Add more rows to the class details using add icon button. Enter the bucket IDs in the space provided, and specify the range.

6.4 System Accounts Generation

This section contains the following topics:

6.4.1 Invoking the System Accounts Detailed Screen

You can manually generate system accounts using ‘System Accounts Detailed’ screen. Entries can be directly posted to these manually generated accounts.

You can invoke this screen by typing ‘EGDSYSAC’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

The system displays the following details of the account:

However, you may modify the following details:

Alternate System Acc Number

You can enter an alternative system account number, and use the same for your reference.

System Account Description

You can enter a brief description on the nature of the system account.

6.4.2 System Account Elements Button

You can view the details of system defined elements and their corresponding values in the ‘System Account Elements’ screen. To invoke the screen, click ‘System Account Elements’ button on the ‘System Accounts Detailed’ screen.

 

6.4.3 Processing System Account Generation

The parameters for system accounts generation are maintained for a combination of GL and GAAP codes. The following illustration will help you comprehend the process of system account generations in FGL.

Consider the following details:

Entry 1:

GAAP DR/CR Account Branch Account Currency Posting Date Amount
G1 D BR1 GL1 USD 1-Jan-08 10,000

 

Following are the transaction attributes:

PRODUCT : LD01

TENOR : 300 Days

This is the first entry to the GL. The system generates a new system account’S1’ and posts the balance to it.

Entry 2:

GAAP DR/CR Account Branch Account Currency Posting Date Amount
G1 D BR1 GL1 USD 1-Jan-08 10,000

Following are the transaction attributes:

PRODUCT : LD01

TENOR : 370 Days

Primarily, the system resolves the number range bucket as ‘BCKT2’ and checks whether a system account has been generated for that combination. Again, for such combination, the system generates a new system account ‘S2’ and posts the balances to it.

Entry 3:

GAAP DR/CR Account Branch Account Currency Posting Date Amount
G1 D BR1 GL1 USD 1-Jan-08 10,000

Following are the transaction attributes:

PRODUCT : LD01

TENOR : 250 Days

Initially, the system resolves the number range bucket as ‘BCKT1’ and checks whether a system account has already been generated for this combination. In the above case, system account ‘S1’ has already been generated for the GAAP ‘G1’ with the same transaction attributes. Hence, the system posts this entry to the system account ‘S1’ itself.

6.4.4 Processing General Ledgers for Customers

Based on the parameters set for customer accounts, Oracle FLEXCUBE sends customer account balances to asset and liability general ledgers, based on their nature. For an external system that reports the balances, Oracle FLEXCUBE provides the following options:

In the latter case, based on the current balance and the entry, FGL senses a difference in the account balance and adjusts the balances in the reporting GLs accordingly.

Consider the following details:

Balance in the customer account : 100 USD (Credit )

Reporting GL (credit) : G1

Reporting GL (debit) : G2

Now, suppose that the following entry is posted to the customer account.

Dr Customer Account 150 USD

The system identifies the balance flip in the customer account and moves the balance from G1 to G2.

Then, the system treats the above entry as shown:

Dr G1 100 USD

Dr G2 50 USD

This entry manages the movement of the account balance from the general ledgers G1 to G2.

6.4.5 Tracking Balances of System Accounts

FGL tracks the balances in system accounts, general ledgers and MIS classes maintained in the system.

System accounts are the lowest level of entry points to the books of accounts. General ledger balance is a consolidation of total balances of all such system accounts.

FGL tracks the following balances for each system account:

The balances that the system updates could be:

The system maintains the opening balance, based on the type of balance. For instance, in case of period balance, opening balance refers to the balance at the beginning of the period.

6.4.5.1 Handling of Back Dated Entries

FGL receives back dated entries and updates the balances accordingly. The following example illustrates the period balance tracking mechanism for back dated entries.

Consider the following system data:

Current Business Date : 01-AUG-2008

Current Financial Cycle : FY2008

Current Financial Period : Q3

Balance of System Account S1

Balance Type Balance
Branch Code CHO
System Account S1
Currency USD
Financial Cycle FY2000
Financial Period QT3
GL Code GL003
GAAP Code G1
Opening Debit Balance 0
Opening Credit Balance 0
Opening Debit Balance in Local Currency 0
Opening Credit Balance in Local Currency 0
Opening Debit Movement 0
Opening Credit Movement 0
Opening Debit Movement in Local Currency 0
Opening Credit Movement in Local Currency 0
Debit Balance 0
Credit Balance 0
Debit Balance In Local Currency 0
Credit Balance In Local Currency 0
Debit Movement 0
Credit Movement 0
Debit Movement In Local Currency 0
Credit Movement In Local Currency 0

Assume that the following entry is posted into S1 –

GAAP DR/CR Branch GL Code System Account Currency Posting Date Amount
G1 D BR1 GL1 S1 USD 1-Aug-08 10,000

Balance in the system account ‘S1’ is updated as follows:

Balance Type Balance
Branch Code CHO
System Account S1
Currency USD
Financial Cycle FY2008
Financial Period Q3
GL Code GL1
GAAP Code G1
Opening Debit Balance 0
Opening Credit Balance 0
Opening Debit Balance in Local Currency 0
Opening Credit Balance in Local Currency 0
Opening Debit Movement 0
Opening Credit Movement 0
Opening Debit Movement in Local Currency 0
Opening Credit Movement in Local Currency 0
Debit Balance 10000
Credit Balance 0
Debit Balance In Local Currency 10000
Credit Balance In Local Currency 0
Debit Movement 10000
Credit Movement 0
Debit Movement In Local Currency 10000
Credit Movement In Local Currency 0

Assume that the following entry is posted into S1:

GAAP DR/CR Branch GL Code System Account Currency Posting Date Amount
G1 D BR1 GL1 S1 USD 1-Jun-08 5,000

This is a back period entry. As a result, the system will update ‘Posted into Past Period’ turnovers for the period Q3 and ‘Posted from Future Period’ turnovers for period Q2.

Following is the balance of the system account S1 for Q3:

Balance Type Balance
Branch Code CHO
System Account S1
Currency USD
Financial Cycle FY2008
Financial Period Q3
GL Code GL1
GAAP Code G1
Opening Debit Balance 5000
Opening Credit Balance 0
Opening Debit Balance in Local Currency 5000
Opening Credit Balance in Local Currency 0
Opening Debit Movement 0
Opening Credit Movement 0
Opening Debit Movement in Local Currency 0
Opening Credit Movement in Local Currency 0
Debit Balance 15000
Credit Balance 0
Debit Balance In Local Currency 15000
Credit Balance In Local Currency 0
Debit Movement 15000
Credit Movement 0
Debit Movement In Local Currency 15000
Credit Movement In Local Currency 0

This entry has updated the ‘Posted into Past Period’ turnovers of the balance record for period Q3. Since it is a back dated entry, the system has changed the opening balance to 5000 Debit.

Balances for the quarter Q2 will be as follows:

Balance Type Balance
Branch Code CHO
System Account S1
Currency USD
Financial Cycle FY2000
Financial Period Q2
GL Code GL1
GAAP Code G1
Opening Debit Balance 0
Opening Credit Balance 0
Opening Debit Balance in Local Currency 0
Opening Credit Balance in Local Currency 0
Opening Debit Movement 0
Opening Credit Movement 0
Opening Debit Movement in Local Currency 0
Opening Credit Movement in Local Currency 0
Debit Balance 5000
Credit Balance 0
Debit Balance In Local Currency 5000
Credit Balance In Local Currency 0
Debit Movement 0
Credit Movement 0
Debit Movement In Local Currency 0
Credit Movement In Local Currency 0

 

6.4.6 Tracking General Ledger Balances

General ledgers in Oracle FLEXCUBE are the consolidation points of system accounts. Balance tracking for general ledgers is hence, same as that of system accounts.

For details with illustration, please refer the section ‘Tracking Balances of System Accounts’ in this chapter.

For FGLs, the system can track the following balances:

6.4.7 Tracking MIS Balances

MIS balance is the breakup of the general ledger balance based on MIS codes and MIS classes. The sum of all MIS balances for a particular class will reflect the total GL balance. The external system provides the details of MIS codes. However, if it does not provide the MIS code, the system will consider the code as ‘UNDEFINED’. The MIS balances will be updated accordingly.

6.4.8 Adjusting Balances

FGL identifies any change in the transaction data provided. The change in the transaction data has an impact in the system account balances. In that case, the system may consider the balances as invalid, if it is posted with the old data. Hence, whenever there is such a change, the system readjusts the system account balances. FGL will reverse the balances posted and rebook the balances in a new set of system accounts.

This is an optional feature. You can set your preferences related to the same at the ‘Source Preferences’ level.

Consider the following details:

Entry 1:

GAAP DR/CR Account Branch Account Currency Posting Date Amount
G1 C BR1 GL1 USD 1-Jan-08 10,000
G1 D BR1 GL2 USD 1-Jan-08 10,000

Following are the transaction attributes:

PRODUCT : LD01

TENOR : 300 Days

This is the first entry to the GL. The system generates a new system account S1 and posts the balance to it.

Now, suppose that the loan contract has been amended with an increase in the tenor. The new tenor is 500.

The external system will send this information during such an amendment and accordingly, the system will adjust the balances by passing relevant adjustment entries.

As GL2 does not have any SDE class attached to it for GAAP G1, system does not pass any adjustment entry to adjust the balance in GL2.

Whereas, GL1 is attached to SDE class ‘INCOME’ for GAAP G1. INCOME has ‘TENOR’ as one of its attributes and that will result in a change in the system account to be used. FGL determines the new system accounts and posts the balances to those accounts.

Assume that the new system account is S2. In the above scenario, the system will generate the following entries

GAAP DR/CR Account Branch Account Currency Posting Date Amount
G1 D BR1 S1 USD 1-Jan-08 10,000
G1 C BR1 S2 USD 1-Jan-08 10,000

6.5 Querying Balances

This section contains the following topics:

6.5.1 Viewing General Ledger Balances

In FLECUBE, you can query and view the following balances:

In this section, we will examine how Oracle FLEXCUBE helps you view these balances.

You can view the period wise balances in a general ledger using ‘GL Period Balance Details’ screen. You can invoke the ‘GL Period Balance Details’ screen by typing ‘EGDLINE’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here you can view the following details:

You can query the general ledger balances by the following parameters:

6.5.2 Viewing General Ledger Book Dated Balances

You can view the balances in a general ledger and query it based on booking date using ‘GL Book Dated Balance Detailed’ screen. You can invoke the ‘GL Book Dated Balance Detailed’ screen by typing ‘EGDGLBDB’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here you can view the following details:

You can query the general ledger balances by the following parameters:

6.5.3 Viewing General Ledger Value Dated Balances

You can view the balances in a general ledger and query it based on value date using ‘GL Book Date Balance Details’ screen. You can invoke the ‘GL Book Date Balance Details’ screen by typing ‘EGDGLVDB’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

Here you can view the following details:

You can query the general ledger balances by the following parameters:

6.5.4 Viewing Transaction Details

You can view the latest transactions and MIS details using ‘View Transaction Details’ screen. You can invoke the ‘View Transaction Details’ screen by typing ‘EGDTXINF’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

Using this screen, you can query the transaction details as well as transaction MIS details, based on the transaction attribute reference number.

6.5.5 Viewing Customer MIS Details

You can view the MIS details for a customer using ‘View Customer Details’ screen. You can invoke the ‘View Customer Details’ screen by typing ‘EGDCMINF’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

You can query the MIS details based on customer MIS reference number. The system will display the MIS classes, codes and respective descriptions on this screen.

6.6 End of Day Operations

This section contains the following topics:

6.6.1 Invoking the Account Revaluation Setup Screen

During end of the day, you can run a batch program for account revaluation for Oracle FLEXCUBE general ledgers. As a result of the batch, the system revalues the system account balances and posts the revaluation profit or loss into a predefined account.

You can set your preferences pertaining to account revaluation using ‘Account Revaluation Setup’ screen. You can invoke the ‘Account Revaluation Setup’ screen by typing ‘EGDRVSTP’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you need to capture the following details:

GL SL

Specify the code to identify the general ledger account for which you wish to set the parameters.

Description

Enter a brief description of the general ledger account for which you wish to set the revaluation parameters.

Transaction Code and Description

Specify the transaction code under which the accounting entries are posted to the revalued general ledger account. Based on the transaction code, the system displays the description.

Rate Type

Specify the rate type that you wish to use for revaluation of the general ledger.

Netting Indicator

You may wish to net the entries for all accounts linked to the GL code. If you check this option, the system will pass single consolidated entries each for profit and loss.

Revalue into GL and Description

Specify the GL into which you wish to pass the revaluation entries. The system will use this GL instead of the GL being revalued for passing the entries. As a result, the revaluation entries will not affect the balance in the GL that under revaluation.

The system will debit this GL account is, if the result of revaluation is a profit. On the other hand, it will credit this GL if the result of revaluation is a loss.

By default, this is the GL under revaluation. For all non-contingent GLs belonging to the asset or liability categories, the system defaults to the GL being revalued.

You can specify a different account for posting these entries. Select it from the option list which displays all GLs maintained in the system.

The system displays the description based on the GL selected.

Profit GL and Description

If the result of GL revaluation is a profit, the system credits the profit amount to the profit GL that is specified here. Similarly, if you have opted for revaluation split for the GL, then the revaluation profit, as opposed to the trading profit, is posted into this profit GL.

On revaluation split, the system segregates the revaluation profit / loss into:

Trading Profit Account and Description

If you have opted for revaluation split, you need to specify the trading profit account into which the profits of trading revaluation should be posted.

The system displays the description based on the account selected.

Loss GL and Description

If the result of revaluation is a loss, the system debits the loss amount to the loss GL specified here. If you have opted for revaluation split, then the revaluation loss (as opposed to trading loss) will be posted into this GL.

Trading Loss Accounting and Description

If you have opted for revaluation split, you need to specify the trading loss account into which the losses of trading revaluation should be posted.

The system displays the description based on the account selected.

Based on the preferences set on ‘Account Revaluation Setup’ screen, the system books profit and loss to the Profit GL and Loss GL respectively. You may also direct the revaluation entries into another GL in order to stabilize the balance in the GL under revaluation. For this purpose, you may use the option ‘Revalue into GL’.

Based on the revaluation results, the system adjusts the position balances as well. The system takes into account the positioning preferences of the GL under revaluation for this purpose.

6.6.2 Tracking MIS Balances for Revaluation Entries

During GL revaluation, the system updates the local currency balances of the GL. This requires an adjustment in the MIS balance breakup of the GL. To tackle this, the system has been configured in such a way to update the MIS balance for the revaluation entry.

For all MIS codes under each MIS class, the system splits the net balance posted into the GL. This splitting is based on the ratio of the current balances of the MIS codes.

6.6.3 Automatic Financial Closure

Oracle FLEXCUBE automatically triggers Oracle FLEXCUBE General Ledger financial closure on the last day of the financial cycle. You have maintained year-end profit and loss GLs in the ‘Chart of Accounts Maintenance’ screen. The system moves the income and expense balances into those year-end profit and loss GLs respectively. The system applies the break up schemes defined at the same level, while generating system accounts for PNL entries. This process is initiated within the financial period ‘FIN’ of the financial cycle.

For Oracle FLEXCUBE general ledgers, the system attaches an SDE class of type ‘Balance’ to the year end profit and loss GLs. The system uses this SDE class and the attributes of the balance being transferred, to generate the system accounts. However, for such entries, if the SDE class is of any type other than ‘Balance’, the system displays an error message.

6.7 Web Services Available for FGLs

In case of general ledgers, you may use the web services provided by Oracle FLEXCUBE for the following purposes:

The web services available for Oracle FLEXCUBE general ledgers are listed below:

Value Dated Balances