This Annexure contains details of the suggested accounting entries that can be set up, for the LC module of Oracle FLEXCUBE. The annexure lists details of the suggested accounting entries, event-wise.
This section contains the following details:
The following is an exhaustive list of events that can take place during the lifecycle of an LC. In the subsequent paragraphs we shall examine the accounting entries for each of the events listed below.
Event Code |
Event Description |
Remarks |
ACCR |
Accrual (Of Commission) |
All Types |
AMND |
Amendment |
All Types |
AOCF |
Amendment from open to open and confirm |
Import only |
AATC |
Amendment from Advice to Confirm |
Export Only |
APAC |
Amend - Pre-advice to Adv & confirm |
Export Only |
APAD |
Amendment from Pre-advice to advice |
Export Only |
AVAL |
Availment |
Only For LC’s |
BADV |
Booking Of An LC With Operation Advise |
Export LC Only |
BANC |
Booking Of An LC With Operation Advise And Confirm |
Export LC Only |
BCFM |
Booking Of An LC With Operation Confirm |
Export LC Only |
BISS |
Booking Of An LC Or Guarantee Issue (Open or Open & Confirm) |
Only For Import LC, Standby LC, Clean LC, Shipping Guarantee And Guarantee |
BPRE |
Booking Of An LC With Operation Pre-Advise |
All Types |
CALC |
Periodic commission calculation |
All types |
CANC |
Cancellation of an LC |
All Types |
CLIQ |
Commission Liquidation |
All Types |
CLOS |
Closure Of An LC Or Guarantee |
All Types |
RAVL |
Reversal of Availment |
All types |
REIM |
Reimbursement Claim of an LC |
Revolving LC |
REIN |
Reinstating An LC |
Revolving LCs |
ROPN |
Reopening Of An LC |
All Types |
REVR |
Reversal of contract |
All types |
ROPN |
Reopening of an LC |
All types |
REIS |
Reissue of Guarantee |
Guarantee only |
BKSG |
Booking of Shipping Guarantee |
Shipping Guarantee |
CASG |
Cancellation of Shipping Guarantee |
Shipping Guarantee |
APRE |
Amendment of LC with Pre-advice |
Import LC |
Whenever a conversion of currency is involved, the conversion rate used is as follows:
Amount Tag |
Description |
AVAIL_SET_AMT |
Availment amount paid |
AVAIL_SET_AMTEQ |
Availment amount received |
COLL_AMNDAMT |
Collateral amend amount Dr. |
COLL_AMNDAMT_EQ |
Collateral amend amount Cr. |
COLLAMT_OS |
Outstanding Collateral amount |
COLLAMT_OS_EQ |
Outstanding Collateral amount |
LC_AMND_AMT |
LC Amendment Amount |
LC_OS_AMT |
Outstanding LC amount |
LC_REIN_AMT |
Outstanding Reinstatement Amount |
LIAB_AMND_AMT |
Liability Amendment Amount |
ADV_LIAB_AMND_AMT |
Liability Amendment Amount for advised LCs |
CNF_LIAB_AMND_AMT |
Liability Amendment Amount for confirmed LCs |
LIAB_AMT |
Liability Amount |
LIAB_AVAIL_AMT |
Availment Liability Amount |
ADV_LIAB_AVAIL_AMT |
Availment Liability Amount for advised LCs |
CNF_LIAB_AVAIL_AMT |
Availment Liability Amount for confirmed LCs |
LIAB_OS_AMT |
Outstanding liability amount |
ADV_LIAB_OS_AMT |
Outstanding liability amount for advised LCs |
CNF_LIAB_OS_AMT |
Outstanding liability amount for confirmed LCs |
LIAB_REIN_AMT |
Reinstatement Amount |
ADV_LIAB_REIN_AMT |
Reinstatement Amount for advised LCs |
CNF_LIAB_REIN_AMT |
Reinstatement Amount for confirmed LCs |
UCNF_LIAB_OS_AMT |
Unconfirmed Liability OS Amount |
UCNF_LIAB_AMND_AMT |
Unconfirmed Liability Amendment Amount |
UCNF_LIAB_AVAIL_AMT |
Unconfirmed Liability Availment Amount |
UCNF_LIAB_REIN_AMT |
Unconfirmed Liability Reinstated Amount |
REIM_UND_AMT |
Reimbursement Undertaking Amount |
REIM_NON_UND_AMT |
Reimbursement Non-Undertaking Amount |
AVAL_REIM_UND_AMT |
Availment - Reimbursement Undertaking Amount |
AVAL_REIM_NON_UND_AMT |
Availment - Reimbursement Non-Undertaking Amount |
AMND_REIM_UND_AMT |
Amend - Reimbursement Undertaking Amount |
AMND_REIM_NON_UND_AMT |
Amend - Reimbursement Non-Undertaking Amount |
REIM_OS_UND_AMT |
Reimbursement Outstanding Undertaken amount |
REIM_OS_NON_UND_AMT |
Reimbursement Outstanding Non-undertaken amount |
CNF_LIAB_INCR_AMT |
Confirmed Liability Increased Amount |
UCNF_LIAB_INCR_AMT |
Unconfirmed Liability Increased Amount |
CNF_LIAB_DECR_AMT |
Confirmed Liability Decreased Amount |
UCNF_LIAB_DECR_AMT |
Unconfirmed Liability Decreased Amount |
LC_REM_NU |
Reimbursement Non-Undertaking of LC |
LC_REM_NU_OFF |
Reimbursement Non-Undertaking of LC Offset |
The following is an exhaustive list that contains details of the Accounting Roles that are applicable to the LCs you can process at your bank.
Accounting Role |
Description |
Role Type |
LC_OCU |
Outstanding Credit Unutilized |
Contingent Liability |
LC_OCU_OFFSET |
Unutilized Credit Offset |
Contingent Asset |
LC_CNF |
Confirmation of LC |
Real GL |
LC_CNF_OFF |
Confirmation of LC Offset |
Real GL |
LC_COLL_ACCT |
LC Collateral account |
Liability |
AVL_DEBIT_ACCT |
Availment Debit account |
Real / Type ‘X’ |
AVL_CREDIT_ACCT |
Availment Credit account |
Real / Type ‘X’ |
CHG_CUST_ACC |
Customer Accounts |
Real/Type “X” |
COMM_CUST_ACC |
Customer Accounts |
Real/Type “X” |
COLL_CUST_ACC |
Customer Accounts |
Real/Type “X” |
TAX_CUST_ACC |
Customer Accounts |
Real/Type “X” |
COMM_INC |
Commission Income |
Income |
COMM_REC |
Commission earned not collected |
Asset |
COMM_RIA |
Commission collected in advance |
Liability |
CHG_INC |
Charge Income |
Income |
CHG_REC |
Charge receivable |
Asset |
CHG_EXP |
Charge expense |
Expense |
CHG_PAY |
Charge payable |
Liability |
TAX_PAY |
Tax payable |
Liability |
TAX_EXP |
Tax expense |
Expense |
LC_COLL_BRIDGE |
Collateral bridge between LC shipping guarantee and Bills |
Liability |
LC_LOAN_BRIDGE |
Bridge GL between LC and CL |
Liability |
In this section we will discuss the suggested accounting entries that should be generated for each event in the life cycle of an LC.
This section contains the following details:
Liability
Role |
Amount Tag |
Debit/Credit |
LC_OCU |
LIAB_AMT |
Dr |
LC_OCU_OFFSET |
LIAB_AMT |
Cr |
Booking LC Contract
When the LC contract gets booked through MT740 processing (Authorization to reimburse), the accounting entries are passed as follows:
Role |
Amount Tag |
Debit/Credit |
LC_OCU_OFFSET |
REIM_UND_AMT |
Dr |
LC_OCU |
REIM_UND_AMT |
Cr |
The following accounting entries are passed for the product to handle the entries for Non undertaking portion:
Role |
Amount Tag |
Debit/Credit |
LC_REM_NU_OFF |
REIM_NON_UND_AMT |
Dr |
LC_REM_NU |
REIM_NON_UND_AMT |
Cr |
Collateral (If Any)
Role |
Amount Tag |
Debit/Credit |
COLL_CUST_ACC |
COLL_AMT_OS |
Dr |
LC_COLL_ACC |
COLL_AMT_OSEQ |
Cr |
Charges
Booking (From Customer Account)
Role |
Amount Tag |
Debit/Credit |
CHG_CUST_ACC |
CHARGES |
Dr |
CHG_INC |
CHARGES |
Cr |
Booking (From Receivable Account)
Role |
Amount Tag |
Debit/Credit |
CHG_REC |
CHARGES |
Dr |
CHG_INC |
CHARGES |
Cr |
On Receipt (For booking Under Receivable Account)
Role |
Amount Tag |
Debit/Credit |
CHG_CUST_ACC |
CHARGES |
Dr |
CHG_REC |
CHARGES |
Cr |
Commission
In Advance (Non - Accrual - On Booking)
Role |
Amount Tag |
Debit/Credit |
COMM_CUST_ACC |
COMMSN |
Dr |
COMM_INC |
COMMSN |
Cr |
In Advance (Accrual - On Booking)
Role |
Amount Tag |
Debit/Credit |
COMM_CUST_ACC |
COMMSN |
Dr |
COMM_RIA |
COMMSN |
Cr |
In Advance (Month-End Accrual)
Role |
Amount Tag |
Debit/Credit |
COMM_RIA |
COMMSN |
Dr |
COMM_INC |
COMMSN |
Cr |
In Arrears (Non - Accrual - On Booking)
No Entries for Booking
In Arrears (Non - Accrual - On Receipt)
Role |
Amount Tag |
Debit/Credit |
COMM_CUST_ACC |
COMMSN |
Dr |
COMM_INC |
COMMSN |
Cr |
In Arrears (Accrual - On Booking)
No Entries for Booking
In Arrears (Month - End Accrual)
Role |
Amount Tag |
Debit/Credit |
COMM_REC |
ACCR_COMMSN |
Dr |
COMM_INC |
ACCR_COMMSN |
Cr |
In Arrears (On Receipt of Commission)
Role |
Amount Tag |
Debit/Credit |
COMM_CUST_ACC |
COMMSN |
Dr |
COMM_REC |
COMMSN |
Cr |
The following accounting entries are maintained for a shipping guarantee product:
Accounting Role |
Amount Tag |
Dr/Cr |
LC_COLL_BRIDGE |
COLL_AMT |
Dr |
LCCOLL_INT_ACCT |
COLL_AMT |
Cr |
LC_OCU_OFFSET |
LIAB_OS_AMT |
Dr |
LC_OCU |
LIAB_OS_AMT |
Cr |
LCCOLL_INT_ACCT |
COLLAT_DECR |
Dr |
Customer |
COLLAT_DECR |
Cr |
Customer |
COLL_AMT_INCR |
Dr |
LCCOLL_INT_ACCT |
COLL_AMT_INCR |
Cr |
Liability
Role |
Amount Tag |
Dr/Cr |
LC_OCU |
AVAIL_SET_AMT |
Cr |
LC_OCU_OFFSET |
AVAIL_SET_AMTEQ |
Dr |
LC_OCU |
ADV_LIAB_AVAIL_AMT |
Cr |
LC_OCU_OFFSET |
ADV_LIAB_AVAIL_AMT |
Dr |
LC_CNF_OFF |
CNF_LIAB_AVAIL_AMT |
Dr |
LC_CNF |
CNF_LIAB_AVAIL_AMT |
Cr |
Collateral (If Any)
Role |
Amount Tag |
Dr/Cr |
COLL_CUST_ACC |
COLL_AMNDAMT |
Cr |
LCCOLL_INT_ACCT |
COLL_AVALAMT |
Dr |
LC_OCU_OFFSET |
AVAIL_SET_AMT |
Dr |
LC_OCU |
AVAIL_SET_AMT |
Cr |
LCCOLL_INT_ACCT |
COLL_AMT_DECR |
Dr |
LC_COLL_BRIDGE |
COLL_AMT_DECR |
Cr |
Liability
Role |
Amount Tag |
Dr/Cr |
LC_OCU |
LIAB_OS_AMT |
Cr |
LC_OCU_OFFSET |
LIAB_OS_AMT |
Dr |
LC_OCU |
ADV_LIAB_OS_AMT |
Cr |
LC_OCU_OFFSET |
ADV_LIAB_OS_AMT |
Dr |
LC_CNF |
CNF_LIAB_OS_AMT |
Cr |
LC_CNF_OFFSET |
CNF_LIAB_OS_AMT |
Dr |
Collateral (If Any)
Role |
Amount Tag |
Debit/Credit |
COLL_CUST_ACC |
COLLAMT_OS |
Cr |
LC_COLL_ACCT |
COLLAMT_OSEQ |
Dr |
When the Export LC is closed, the amount will be reduced proportionately from Confirmed portion and Unconfirmed portion.
Dr/ Cr |
Account role code |
Amount tag |
LCY Amount Description |
Dr |
LC_OCU_OFFSET (Unutilized Credit Offset) |
UCNF_LIAB_OS_AMT |
Unconfirmed LC Amount |
Cr |
LC_OCU (Outstanding Credit Unutilized) |
UCNF_LIAB_OS_AMT |
Unconfirmed LC Amount |
Dr |
LC_CNF_OFF (Confirmation of LC Offset) |
CNF_LIAB_OS_AMT |
Confirmed LC Amount |
Cr |
LC_CNF (Confirmation of LC) |
CNF_LIAB_OS_AMT |
Confirmed LC Amount |
Role |
Amount Tag |
Debit/Credit |
LC_OCU |
LIAB_REIN_AMT |
Dr |
LC_OCU_OFFSET |
LIAB_REIN_AMT |
Cr |
LC_OCU |
ADV_LIAB_REIN_AMT |
Dr |
LC_OCU_OFFSET |
ADV_LIAB_REIN_AMT |
Cr |
LC_CNF |
CNF_ LIAB_REIN_AMT |
Dr |
LC_CNF_OFF |
CNF_ LIAB_REIN_AMT |
Cr |
The accounting entries for reinstatement for Revolving LC (in case of reinstatement of more than the confirmed amount) are as follows:
Account role code |
Amount tag |
Dr/ Cr |
LC_OCU (Outstanding Credit Unutilized) |
UCNF_LIAB_REIN_AMT |
Dr |
LC_OCU_OFFSET (Unutilized Credit Offset) |
UCNF_LIAB_REIN_AMT |
Cr |
LC_CNF (Confirmation of LC) |
CNF_LIAB_REIN_AMT |
Dr |
LC_CNF_OFF (Confirmation of LC Offset) |
CNF_LIAB_REIN_AMT |
Cr |
The amount of the Confirmed Portion will be reinstated first. In this case, the entire confirmed amount is reinstated
Accounting entries for increase in the confirmation as part of amendment are as follows:
Account role code |
Amount tag |
Dr/ Cr |
LC_OCU_OFFSET (Unutilized Credit Offset) |
CNF_LIAB_INCR_AMT |
Dr |
LC_OCU (Outstanding Credit Unutilized) |
CNF_LIAB_INCR_AMT |
Cr |
LC_CNF (Confirmation of LC) |
CNF_LIAB_INCR_AMT |
Dr |
LC_CNF_OFF (Confirmation of LC Offset) |
CNF_LIAB_INCR_AMT |
Cr |
Accounting entries for decrease in the confirmation as part of amendment are as follows:
Account role code |
Amount tag |
Dr/ Cr |
LC_CNF_OFF (Confirmation of LC Offset) |
CNF_LIAB_DECR_AMT |
Dr |
LC_CNF (Confirmation of LC Offset) |
CNF_LIAB_DECR_AMT |
Cr |
LC_OCU (Outstanding Credit Unutilized) |
CNF_LIAB_DECR_AMT |
Dr |
LC_OCU_OFF (Outstanding Credit Unutilized Offset) |
CNF_LIAB_DECR_AMT |
Cr |
If the amendment is done for change of confirmation amount, if any charges associated with this event with Basis Amount as Confirmation amount will be collected along with other charges associated with this event.
Booking LC Advice
Role |
Amount Tag |
Debit/Credit |
LC_OCU |
ADV_LIAB_OS_AMT |
Dr |
LC_OCU_OFFSET |
ADV_LIAB_OS_AMT |
Cr |
Charges/ Commission
As given in event BISS
Liability
Role |
Amount Tag |
Debit/Credit |
LC_OCU |
LIAB_AMT |
Dr |
LC_OCU_OFFSET |
LIAB_AMT |
Cr |
Collateral (If Any)
Role |
Amount Tag |
Debit/Credit |
COLL_CUST_ACC |
COLL_AMT_OS |
Cr |
LC_COLL_ACCT |
COLL_AMT_OSEQ |
Dr |
Charges/ Commission
As given in event BISS
The accounting entries passed for BPRE are similar to those passed for BISS event.
Role |
Amount Tag |
Dr/Cr |
LC_CNF |
CNF_LIAB_OS_AMT |
Dr |
LC_CNF_OFFSET |
CNF_LIAB_OS_AMT |
Cr |
Liability
Reverse all the previous entries for booking. Re-book entries based on BISS or BADV or BPRE or BANC.
Role |
Amount Tag |
Dr/Cr |
LC_OCU |
ADV_LIAB_OS_AMT |
Dr |
LC_OCU_OFFSET |
ADV_LIAB_OS_AMT |
Cr |
LC_CNF |
CNF_LIAB_OS_AMT |
Dr |
LC_CNF_OFFSET |
CNF_LIAB_OS_AMT |
Cr |
When Undertaking Amount is reduced as part of amendment, the accounting entries passed during “AMND” event are as follows:
Role |
Amount tag |
Dr/Cr |
LC_OCU |
REIM_NON_UND_AMT |
Dr |
LC_OCU_OFFSET |
REIM_NON_UND_AMT |
Cr |
LC_REM_NU_OFF |
REIM_NON_UND_AMT |
Dr |
LC_REM_NU |
REIM_NON_UND_AMT |
Cr |
When Undertaking Amount is increased as part of amendment, the accounting entries passed during “AMND” event are as follows:
Role |
Amount tag |
Dr/Cr |
LC_OCU_OFFSET |
REIM_UND_AMT |
Dr |
LC_OCU |
REIM_UND_AMT |
Cr |
None
None
Same as For BISS
Reverse out all the accounting entries booked for the contract till date.
See Commissions under event BISS.
No entries due to commission calculation.
LC Status Change
Role |
Amount Tag |
Dr/Cr |
<component>INC |
<Component>_MOVINC |
Dr |
<component>NORMINC |
<Component>_MOVINC |
Cr |
See Commissions under event BISS.
Liability
Role |
Amount Tag |
Dr/Cr |
LC_OCU |
LIAB_OS_AMT |
Dr |
LC_OCU_OFFSET |
LIAB_OS_AMT |
Cr |
LC_OCU |
ADV_LIAB_OS_AMT |
Dr |
LC_OCU_OFFSET |
ADV_LIAB_OS_AMT |
Cr |
LC_CNF |
CNF_LIAB_OS_AMT |
Dr |
LC_CNF_OFFSET |
CNF_LIAB_OS_AMT |
Cr |
Collateral (If Any)
Role |
Amount Tag |
Dr/Cr |
COLL_CUST_ACC |
COLLAMT_OS |
Dr |
LC_COLL_ACCT |
COLLAMT_OS_EQ |
Cr |
Role |
Amount Tag |
Dr/Cr |
LC_OCU |
LIAB_OS_AMT |
Cr |
LC_OCU_OFFSET |
LIAB_OS_AMT |
Dr |
LC_OCU |
ADV_LIAB_OS_AMT |
Cr |
LC_OCU_OFFSET |
ADV_LIAB_OS_AMT |
Dr |
LC_CNF |
CNF_LIAB_OS_AMT |
Cr |
LC_CNF_OFFSET |
CNF_LIAB_OS_AMT |
Dr |
The following accounting entries are maintained in Shipping Guarantee product:
Accounting Role |
Amount Tag |
Dr/Cr |
LC_OCU_OFFSET |
LIAB_OS_AMT |
Dr |
LC_OCU |
LIAB_OS_AMT |
Cr |
LCCOLL_INT_ACCT |
COLL_AMT_DECR |
Dr |
LC_COLL_BRIDGE |
COLL_AMT_DECR |
Cr |
None
Role |
Amount Tag |
Dr/Cr |
LC_OCU |
LIAB_OS_AMT |
Cr |
LC_OCU_OFFSET |
LIAB_OS_AMT |
Dr |
LC_OCU |
ADV_LIAB_OS_AMT |
Cr |
LC_OCU_OFFSET |
ADV_LIAB_OS_AMT |
Dr |
LC_CNF |
CNF_LIAB_OS_AMT |
Dr |
LC_CNF_OFFSET |
CNF_LIAB_OS_AMT |
Cr |
None
When an Export LC is transferred, the amount in the old LC (From LC) would be reduced proportionately from Confirmed portion and Unconfirmed portion as part of AVAL event.
Dr/ Cr |
Account role code |
Amount tag |
LCY Amount Description |
Dr |
LC_OCU_OFFSET (Unutilized Credit Offset) |
UCNF_LIAB_AVAIL_AMT |
Unconfirmed LC Amount |
Cr |
LC_OCU (Outstanding Credit Unutilized) |
UCNF_LIAB_AVAIL_AMT |
Unconfirmed LC Amount |
Dr |
LC_CNF_OFF (Confirmation of LC Offset) |
CNF_LIAB_AVAIL_AMT |
Confirmed LC Amount |
Cr |
LC_CNF (Confirmation of LC) |
CNF_LIAB_AVAIL_AMT |
Confirmed LC Amount |
The new Export LC contract will have the same split of Confirmed LC amout and Unconfirmed LC amount as it was there in the old LC.
Dr/ Cr |
Account role code |
Amount tag |
LCY Amount Description |
Dr |
LC_OCU (Outstanding Credit Unutilized) |
UCNF_LIAB_OS_AMT |
Unconfirmed LC Amount |
Cr |
LC_OCU_OFFSET (Unutilized Credit Offset) |
UCNF_LIAB_OS_AMT |
Unconfirmed LC Amount |
Dr |
LC_CNF (Confirmation of LC) |
CNF_LIAB_OS_AMT |
Partial Confirmation Amount |
Cr |
LC_CNF_OFF (Confirmation of LC Offset) |
CNF_LIAB_OS_AMT |
Partial Confirmation Amount |
Fetch entries for an availment event and reverse them.
Role |
Amount Tag |
Dr/Cr |
LC_OCU |
AVAIL_SET_AMT |
Dr |
LC_OCU_OFFSET |
AVAIL_SET_AMT |
Cr |
LCCOLL_INT_ACCT |
COLL_AMT_DECR |
Dr |
LC_COLL_BRIDGE |
COLL_AMT_DECR |
Cr |
The following accounting entries are maintained for cancellation of Shipping Guarantee:
Accounting Role |
Amount Tag |
Dr/Cr |
LC_OCU |
AVAIL_SET_AMT |
Dr |
LC_OCU_OFFSET |
AVAIL_SET_AMT |
Cr |
LC_COLL_BRIDGE |
COLL_AMT_INCR |
Dr |
LCCOLL_INT_ACCT |
COLL_AMT_INCR |
Cr |
The accounting entries passed for BPRE are similar to those passed for AMND event.