14. Annexure A – Accounting Entries and Advices

This section contains details of the suggested accounting entries that can be set up, for the Islamic Financing module of Oracle FLEXCUBE. The details of the suggested accounting entries are given event-wise.

This chapter contains the following sections:

• Section 14.1, "Events "
• Section 14.2, "Accounting Roles"
• Section 14.3, "Event-wise Advices"

14.1 Events

The following is an exhaustive list of events that can take place during the lifecycle of an Islamic Financing contract. In the subsequent paragraphs we shall examine the accounting entries and advices for each of the events listed below.

Event Code	Event Description
ACCR	Accrual
ADCH	ADHOC charge application
ALIQ	Auto liquidation
ARVN	Automatic Rate Revision
BADJ	Back Dated Adjustment
BNTC	Billing Notice Event
BOOK	Booking Of Contract
CLOS	Closure for off balance sheet comp
DNTC	Delinquency Notice Event
DSBR	Disbursement
INIT	Contract Initiation
ISTM	Profit Statement Event
LCYP	LCY update processing
LIQB	Liquidation Tanking
LSTM	Finance Statement Event
MLIQ	Manual Liquidation
NOVA	Novation
PROV	Provisioning
READ	Readjustment Processing
REOP	Reopen of finance account
REVC	Reversal Of Contract
REVD	Reversal Of Disbursement
REVN	Rate Revision
REVP	Reversal Of Payment
RNOG	Re-Negotiation
ROLB	Roll Over Booking
ROLL	Roll Over Of Contract
SROL	Special Roll over
STSH	Installment Status Change
TAXC	Specific Tax Calculation
UDCN	UDE Cascade Change
USGR	Un-Secured GL Transfer Reversal
USGT	Unsecured GL Transfer
VAMB	Value Dated Amendment Booking
VAMI	Value Dated Amendment Initiation
YACR	Yield to Maturity based Discount Accrual
UIDB	Unearned Profit Booking
PACR	Principal Accrual
CONF	Sale Confirmation
INSR	Insurance Renewal
VPRV	Vendor Payment Reversal
VPAY	Vendor Payment
TRFR	Transfer
TADJ	Transfer Adjustment

14.2 Accounting Roles

In this section we have provided a list of sample accounting roles.

Accounting Role	Description
ASSETGL	The Customer GL to which the Finance Account movements are reported.
PRINCIPAL_LIQD	Principal Liquidated
PRINCIPAL_INCR	Principal Increased
COMPONENT _INC	Component Income
COMPONENT EXP	Component Expense
COMPONENT RIA	Component Received in Advance
COMPONENT PAY	Component Payable
COMPONENT REC	Component Receivable
COMPONENT PIA	Component Paid in Advance
BRIDGE GL	Intersystem Bridge GL
SETTLEMENT ACCOUNT	Customer Account Settled From / To
FEES_REC	Fees Receivable
CHARGES_REC	Adhoc Charges Receivable
PURCHASE ASSET	Purchase Asset GL
COMPONENT_UID	Component Unearned Profit Booking
DEFPRINCIPAL	Deferred Rental (Principal) Account
PRINCIPALINC	Income from Ijarah (Principal)
DealerWIPACC	Dealer work in progress in account
WAKALA_ASSETGL	Real Asset for Wakala account
WAKALA_SUSPGL	Suspense GL for Wakala-Murabaha
INSURANCE_ACC	Insurance Company account
INSURANCE_REC	Account Receivable – Insurance collection
ASSET_FINANCING	Istisna Asset financing

Accounting roles for the YACR event

Accounting Role	Acquisition Type	Role Type
EIMDISCRIA	Discount	Asset
EIMDISCINC	Discount	Asset
EIMPREMPIA	Premium	Asset
EIMPREMEXP	Premium	Asset
EIMINTADJREC	Par	Asset
EIMINTADJINC	Par	Asset

14.3 Event-wise Advices

In this section we will discuss the suggested events and advices that should be generated for that particular event in the life cycle of Islamic Financing.

This section contains the following topics:

• Section 14.3.1, "BOOK "
• Section 14.3.2, "INIT"
• Section 14.3.3, "UIDB"
• Section 14.3.4, "DSBR"
• Section 14.3.5, "ACCR"
• Section 14.3.6, "ADCH"
• Section 14.3.7, "ALIQ and MLIQ"
• Section 14.3.8, "STCH"
• Section 14.3.9, "VAMB and VAMI"
• Section 14.3.10, "ROLL"
• Section 14.3.11, "SROL – Special Roll-over"
• Section 14.3.12, "RNOG – Re-negotiation"
• Section 14.3.13, "NOVA – Novation"
• Section 14.3.14, "REVC – Finance Reversal"
• Section 14.3.15, "REVP - Payment Reversal"
• Section 14.3.16, "REVN – Periodic Rate Revision "
• Section 14.3.17, "ARVN – Automatic Rate Revision "
• Section 14.3.18, "UDCH – User Defined Element Value Changes"
• Section 14.3.19, "YACR – Yield to Maturity Discount Accrual"
• Section 14.3.20, "CLIQ – Charge Liquidation"
• Section 14.3.21, "PACR – Principal Accrual"
• Section 14.3.22, "INSR – Insurance Renewal"
• Section 14.3.23, "TRFR Event"
• Section 14.3.24, "TADJ Event"
• Section 14.3.25, "AUTH Event"

14.3.1 BOOK

The system uses this event to enter details of a finance account. However, at this stage the account is not initialized thus there will not be a change in the balance but you can perform other activities (processing fee etc) for the finance account. The accounting entries passed will be either Contingent Entries for disbursement or component liquidations entries.

Advice Name	Description	Format Name
CL_­CONT_ADV	Contract Advice	CL_CON­TR_STMT

You can maintain the following accounting entries for Murabaha product along with the other entries.

Accounting Role	Amount Tag	Dr /Cr
PURCHASE ASSET	PRINCIPAL	Dr
CR_SETTLE­MENT_BRIDGE	PRINCIPAL	Cr

The following accounting entries for ‘Amount Financed’ and ‘Down Payment’ are passed for this event:

For Financial Lease without Asset Booking

Accounting Role	Amount Tag	Dr /Cr
PURCHASE_ASSET	PRINCIPAL	Dr
PURCHASE ASSET	PRINCIPAL_DOWNP­MNT	Dr
CR_SETTL_BRIDGE (Dealer A/c)	PRINCIPAL	Cr
CR_SETTL_BRIDGE (Dealer A/c)	PRINCIPAL_DOWNP­MNT	Cr

 

The following accounting entries are passed for this event for Islamic Financing product:

For Financial Lease with Asset Booking

Accounting Role	Amount Tag	Dr /Cr
PURCHASE_ASSET	PRINCIPAL	Dr
PURCHASE ASSET	PRINCIPAL_DOWNP­MNT	Dr
CR_SETTL_BRIDGE	PRINCIPAL	Cr
CR_SETTL_BRIDGE (Dealer A/c)	PRINCIPAL_DOWNP­MNT	Cr

 

The following accounting entries are passed for this event for the down payment:

Accounting Role	Amount Tag	Dr /Cr
PURCHASE_ASSET	PRINCIPAL	Dr
VENDORPAYABLEGL	PRINCIPAL	Cr
PURCHASE_ASSET	PRINCIPAL_DOWNP­MNT	Dr
VENDORPAYABLEGL	PRINCIPAL_DOWNP­MNT	Cr

The following accounting entries are maintained for Istisna UIDB product component for this event:

Accounting Role	Amount Tag	Dr /Cr
ASSET_FINANCING	PRINCIPAL	Dr
VENDORPAYABLEGL	PRINCIPAL	Cr

14.3.2 INIT

The system uses this event to initiate a finance with a value date as the date of initiation. However, you can not disburse the finance under this event.

Advice Name	Description	Format Name
CL_INIT_ADV	Initiation Advice	CL_INIT_ADV
CL_CAP	Capitalization Advice	CL_CAP_ADV
CL_CONT_ADV	Contract Advice	CL_CONTR_STMT
CLST_SUM­MARY	Finance Summary Statement Advice	CL_LOAN_SUMMARY
COUPON	Coupon Advice	ADV_COUPON

The following accounting entries are passed for this event:

For Operational Lease

Accounting Role	Amount Tag	Dr /Cr
INT_INC	PRINCIPAL_DOWNP­MNT	Cr
DR_SET­TL_BRIDGE	PRINCIPAL_DOWNP­MNT	Dr

 

The following accounting entries are maintained for Istisna UIDB product component for this event:

Accounting Role	Amount Tag	Dr /Cr
LOAN_ACCOUNT	PRINCIPAL	Dr
ASSET_FINANC­ING	PRINCIPAL	Cr

14.3.3 UIDB

The system uses this event whenever there is a change in principal or in rate revision. This event is triggered along with INIT, DSBR, VAMI, REVN, ROLL and MLIQ events.

Accounting Role	Amount Tag	Dr /Cr
ASSET	PRINCIPAL	Dr
PURCHASE ASSET	PRINCIPAL	Cr

For unearned profit booking, the entries passed are:

Accounting Role	Amount Tag	Dr /Cr
COMPONENT_REC	COMPONENT_UINT	Dr
COMPONENT_UID	COMPONENT_UINT	Cr

The following accounting entries are passed for this event for Islamic Financing product:

For Financial Lease with Asset Booking

Accounting Role	Amount Tag	Dr /Cr
COMPONENT_REC	COMPONENT_UINT	Dr
COMPONENT_UID	COMPONENT _UINT	Cr

 

For Rebate Amount Calculation

Accounting Role	Amount Tag	Dr /Cr
COMPONENT_REC	COMPONENT_UINT	Dr
COMPONENT_UID	COMPONENT_UINT	Cr

 

The following accounting entries are maintained for Istisna UIDB product component for this event:

Accounting Role	Amount Tag	Dr /Cr
PROFIT_REC	PROFIT_UINT	Dr
PROFIT_UID	PROFIT_UINT	Cr

The following accounting entries for posting entries are maintained for Book unearned profit.

Role	Tag	Dr/Cr Indicator
PROFIT_REC	PROFIT_UINT	Dr
PROFIT_UID	PROFIT_UINT	Cr

14.3.4 DSBR

This event is marked by the disbursement of the finance amount. The disbursement may be done manually or can be triggered by a disbursement schedule. The finance account will have debit balances after total disbursement.

Advice Name	Description	Format Name
CR_ADV	Credit Advice	CL_CR_ADV
CLST_DE­TAILS	Finance Detailed Statement Advice	CL_LOAN_DETAIL
CLST_SUM­MARY	Finance Summary Statement Advice	CL_LOAN_SUMMARY
TAX_ADVICE	Tax Advice	CL_TAX_ADVICE

The entries passed are:

Accounting Role	Amount Tag	Dr /Cr
LOAN_AC	PRINCIPAL	Dr
CR_SETTLE­MENT_BRG	PRINCIPAL	Cr

You can maintain the following accounting entries for Murabaha product along with the other entries.

Accounting Role	Amount Tag	Dr /Cr
ASSET	PRINCIPAL	Dr
PURCHASE ASSET	PRINCIPAL	Cr

The following accounting entries for ‘Amount Financed’ and ‘Down Payment’ are passed for this event:

For Financial Lease without Asset Booking

Accounting Role	Amount Tag	Dr /Cr
LOAN_ACCOUNT	PRINCIPAL	Dr
PURCHASE ASSET	PRINCIPAL	Cr
PURCHASE ASSET	PRINCIPAL_DOWNPMNT	Cr
DR_SETTL_BRIDGE (Customer A/c)	PRINCIPAL_DOWNPMNT	Dr

 

The following accounting entries are passed for this event for Islamic Financing product:

For Financial Lease with Asset Booking

Accounting Role	Amount Tag	Dr /Cr
PURCHASE ASSET	PRINCIPAL	Cr
DEALERWIPACC	PRINCIPAL	Dr
PURCHASE ASSET	PRINCIPAL_DOWNP­MNT	Cr
DR_SET­TL_BRIDGE	PRINCIPAL_DOWNP­MNT	Dr
LOAN_ACCOUNT	PRINCIPAL	Dr
DEFPRINCIPAL	PRINCIPAL	Cr

 

For Insurance Refund

Accounting Role	Amount Tag	Dr /Cr
DR_SET­TL_BRIDGE	COMPO­NENT_DP	Dr
COMPONENT_PAY	COMPO­NENT_DP	Cr
COMPONENTPAY	COMPO­NENT_DP	Dr
CR_SET­TL_BRIDGE	COMPO­NENT_DP	Cr

Note

• The finance account of the customer reports to an internal GL of the bank, determined by the Role to Head mapping done at the product level.
• A settlement bridge account is used since there is a probability of the customer ac­count being present in another system which is capable of interfacing with Oracle FLEXCUBE. During the reconciliation process, the appropriate customer account in the relevant system is credited with the finance amount.

The following accounting entries are passed for DSBR event for the down payment:

Accounting Role	Amount Tag	Dr /Cr
DPRCVDGL	PRINCIPAL_DOWNPMNT	Dr
PURCHASE_ASSET	PRINCIPAL_DOWNPMNT	Cr
LOAN_ACCOUNT	PRINCIPAL	Dr
PURCHASE_ASSET	PRINCIPAL	Cr

The following accounting entries are passed for this event for the product with Insurance Required:

Accounting Role	Amount Tag	Dr /Cr
DR_SETTL_BRIDGE	COMPONENT_DP	Dr
COMPONENTPAY	COMPONENT_DP	Cr
COMPONENTPAY	COMPONENT_DP	Dr
CR_SETTL_BRIDGE	COMPONENT_DP	Cr

The following accounting entries can be set up for the DSBR event in insurance renewal processing:

Accounting Role	Amount Tag	Dr /Cr	Netting
DR_SETTL_BRIDGE	COMPONENT_DP	Dr	No
COMPONENTPAY	COMPONENT_DP	Cr	Yes
COMPONENTPAY	COMPONENT_DP	Dr	Yes
CR_SETTL_BRIDGE	COMPONENT_DP	Cr	No
CR_SETTL_BRIDGE	COMPONENT_PREMIUM	Dr	No
INSURANCE_ACC	COMPONENT_PREMIUM	Cr	No

The following accounting entries are maintained for Istisna UIDB product for this event:

Accounting Role	Amount Tag	Dr /Cr
VENDORPAYABLEGL	PRINCIPAL	Dr
CR_SETTL_BRIDGE	PRINCIPAL	Cr

14.3.5 ACCR

The accrual of the various components will be triggered based on the accrual parameters you maintain at the product level.

The following accounting entries are passed for this event:

For Profit Accrual

Accounting Role	Amount Tag	Dr /Cr
INT_REC	INT_ACCR	Dr
INT_INC	INT_ACCR	Cr

 

For Compensation Profit Accrual

Accounting Role	Amount Tag	Dr /Cr
PENAL_INT_REC	PENAL_INT_ACCR	Dr
PENAL_INT_INC	PENAL_INT_ACCR	Cr

 

For unearned profit booking

Accounting Role	Amount Tag	Dr /Cr
COMPONENT_UID	COMPONENT_ACCR	Dr
COMPONENT_INC	COMPONENT_ACCR	Cr

 

For Financial Lease without Asset Booking

Accounting Role	Amount Tag	Dr /Cr
COMPONENT RECEIVA­BLE	INT_ACCR	Dr
INCOME	INT_ACCR	Cr

For Operational Lease

Accounting Role	Amount Tag	Dr /Cr
COMPONENT RECEIVA­BLE	COMPONENT _LIQD	Dr
INT_INC	COMPONENT _LIQD	Cr

The following accounting entries are passed for this event for Islamic Financing product:

 

For Financial Lease with Asset Booking

Accounting Role	Amount Tag	Dr /Cr
COMPONENT UID	COMPO­NENT_ACCR	Dr
COMPONENT INC	COMPO­NENT_ACCR	Cr

 

For Rebate Amount Calculation

Accounting Role	Amount Tag	Dr /Cr
COMPO­NENT_UID	COMPO­NENT_ACCR	Dr
COMPO­NENT_INC	COMPO­NENT_ACCR	Cr

 

The following accounting entries are maintained for Istisna UIDB product component for this event:

Accounting Role	Amount Tag	Dr /Cr
CompnameEXP	Compna­me_ACCR	Dr
CompnamePAY	Compna­me_ACCR	Cr

The following accounting entries for posting ACCR entries are maintained for Book unearned profit.

Role	Tag	Dr/Cr Indicator
PROFIT_UID	PROFIT_ACCR	Dr
PROFITINC	PROFIT_ACCR	Cr

14.3.6 ADCH

The following accounting entries are passed for this event for Islamic Financing product to process the insurance refund component:

Accounting Role	Amount Tag	Dr /Cr
DR_SET­TL_BRIDGE	COMPO­NENT_ADCH	Dr
COMPONENT_PAY	COMPO­NENT_ADCH	Cr
COMPONENT_PAY	COMPO­NENT_ADCH	Dr
CR_SET­TL_BRIDGE	COMPO­NENT_ADCH	Cr

 

14.3.7 ALIQ and MLIQ

Depending on the mode of liquidation opted for, whether automatic or manual, the appropriate event is triggered. A batch process will be triggered at EOD for payments that are marked for auto liquidation.

ALIQ

Advice Name	Description	Format Name
DR_ADV	Debit Advice	CL_DR_ADV
DELIN­QYADV	Delinquency Advice	CL_DELQ_ADV

 

MLIQ

Advice Name	Description	Format Name
BILNOTC	Billing Advice	CL_­BILL_ADVC
DELINQYADV	Delinquency Advice	CL_DELQ_ADV
PAYMENT_ADVICE	Payment Advice	CL_PMT_ADV

The accounting entries for these events will be as follows:

Principal Repayment

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLE­MENT_BRG	PRINCI­PAL_LIQD	Dr
LOAN_AC	PRINCI­PAL_LIQD	Cr

 

Profit Repayment

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLE­MENT_BRG	INT_LIQD	Dr
INT_REC	INT_LIQD	Cr

 

Compensation Profit Repayment

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLE­MENT_BRG	PENAL_INT_LIQD	Dr
PENAL_INT_REC	PENAL_INT_LIQD	Cr

 

Prepayment Compensation

Accounting Role	Amount Tag	Dr /Cr
CUSTOMER	Compo­nent_LIQD	Dr
componentINC	Compo­nent_LIQD	Cr

 

For Rebate Amount Calculation

Accounting Role	Amount Tag	Dr /Cr
CUSTOMER A/C (DR_­SETTL_BRIDGE)	COMPONENT_LIQD	Dr
COMPONENT_REC	COMPONENT_LIQD	Cr
COMPONENT_UID	COMPONENT_UINR	Dr
COMPONENT_REC	COMPONENT_UINR	Cr

The accounting entries for these events with the residual amount liquidation will be as follows:

Accounting Role	Amount Tag	Dr /Cr
LOAN_ACCOUNT	PRINCI­PAL_RV	Cr
DR_SETTL_BRIDGE	PRINCI­PAL_RV	Dr
COMPONENT RECEIVA­BLE	INTEREST_RV	Cr
DR_SETTL_BRIDGE	INTEREST_RV	Dr

The following accounting entries can be set up to process the product with Insurance requred:

Accounting Role	Amount Tag	Dr /Cr
DR_SET­TL_BRIDGE	COMPO­NENT_LIQD	Dr
COMPONENTPAY	COMPO­NENT_LIQD	Cr
COMPONENTPAY	COMPO­NENT_LIQD	Dr
CR_SET­TL_BRIDGE	COMPO­NENT_LIQD	Cr

The following accounting entries can be set up for the MLIQ/ALIQ event to process insurance renewal:

Accounting Role	Amount Tag	Dr /Cr	Netting
DR_SET­TL_BRIDGE	COMPO­NENT_LIQD	Dr	No
COMPONENTPAY	COMPO­NENT_LIQD	Cr	Yes
COMPONENTPAY	COMPO­NENT_LIQD	Dr	Yes
CR_SET­TL_BRIDGE	COMPO­NENT_LIQD	Cr	No
CR_SET­TL_BRIDGE	COMPONENT_REC	Dr	No
INSURANCE_REC	COMPONENT_REC	Cr	No

The following accounting entries are maintained for rebate component for this event:

Accounting Role	Amount Tag	Dr /Cr
CompnamePAY	Compname_LIQD	Dr
CR_SETTL_BRIDGE	Compname_LIQD	Cr

The following accounting entries are maintained for ALIQ/MLIQ events for crediting the incentive to the customer if the component name is MUS_INC:

Accounting Role	Amount Tag	Dr /Cr
MUS_INC_EXP	MUS_INC_LIQD	Dr
CR_SETTL_BRIDGE	MUS_INC_LIQD	Cr

Incentive Advice format MUSH_INCENT_ADVC is used for incentive advice generation

Advice Name	Description
_REFNO_	Our Reference No
_COUNTERPAR­TY_	Customer
_PARTY_	Customer Name
_PRINCIPAL-OUT­STANDING_	Outstanding Princi­pal
_DUE-DATE_	Payment Due Date
_DIFF-AMT_	Total Difference Amount
_INCENT-PER­CENT_	Incentive Percent­age
_INCENT-AMT_	Incentive Amount
_PAYMENT_­DATE_	Payment Date
_MATURITY_­DATE_	Maturity Date
_PROFIT_RATE_	Profit Rate
_PROFIT_TYPE (Fixed or Float)	Profit Type
_PROFIT_OUT­STANDING	Outstanding Profit

 

14.3.8 STCH

This event is triggered when a status change occurs. It could be a Forward Status Change (FSTC) where the finance moves from one adverse status to another or a Backward Status Change (BSTC) wherein, on repayment of overdue installments, a reversal of status takes place. The status derivation rule is used to resolve the status. The change may occur due to a status rule being activated. If the number of days by which a component becomes overdue, exceeds the allowed number of days (may be referred to as the grace period), the component can undergo a status change if a status rule is defined with such a criteria. A status change is triggered if any condition defined for the rule is satisfied.

The accounting entries, if maintained for the events (FSTC and BSTC) will be triggered. The accounting role provided will be the same for all the changes. However, the Role to Head mapping rules will resolve the entries to the appropriate accounts for each status.

Profit accrual for status ‘ACTIVE’

Accounting Role	Amount Tag	Dr /Cr
INT_REC (Mapped to a Real Asset)	INT_ACCR	Dr
INT_INC (Mapped to a Real Income GL)	INT_ACCR	Cr

 

Profit accrual for status ‘PAST DUE’

Accounting Role	Amount Tag	Dr /Cr
INT_REC (Mapped to a Contingent Asset)	INT_ACCR	Dr
INT_INC (Mapped to a Contingent Liability)	INT_ACCR	Cr

 

14.3.9 VAMB and VAMI

These statuses are triggered because of making amendments to a finance account.

VAMB (Booking of a Value Dated Amendment)

This event is triggered when you book a value dated amendment.

You can book for an amendment of the following:

• Maturity date
• Principal Increase
• Rate change

The batch program will identify the changes booked and the same is triggered appropriately on the value date by the VAMI event.

Advice Name	Description	Format Name
CLAMDADV	Amendment Advice	CL_AM­D_ADV

 

VAMI (Initiation of a Value Dated Amendment)

This event will pick up the future dated VAMBs and on the value date, initiate the same.

The accounting entries for an increase in principal will be as follows:

Accounting Role	Amount Tag	Dr /Cr
LOAN_AC	PRINCIPAL_IN­CREASED	Dr
CR_SETTLE­MENT_BRG	PRINCIPAL_IN­CREASED	Cr

Any change to Rate and Tenor (Maturity Date) will alter the original finance schedules.

The following accounting entries are passed for this event:

For Financial Lease without Asset Booking

Accounting Role	Amount Tag	Dr /Cr
LOAN_ACCOUNT	PRINCI­PAL_INCR	Dr
CR_SET­TL_BRIDGE	PRINCI­PAL_INCR	Cr

 

14.3.10 ROLL

This event is triggered when a finance is renewed with new terms. Rollover will have either a combination of liquidation and rollover of Principal. It can also have liquidation of Profit and compensation Profit.

Advice Name	Description	Format Name
CLAMDADV	Amendment Advice	CL_AMD_ADV
CL_ROLL_ADV	Rollover Advice	CL_ROLL_ADV
PAYMENT_ADVICE	Payment Advice	CL_PMT_ADV

The entries passed for rollover of the Principal are as follows:

Accounting Role	Amount Tag	Dr /Cr
CR_SETTLEMENT_BRG	PRINCIPAL_ROLL	Cr
LOAN_AC	PRINCIPAL_ROLL	Dr

For liquidation of Principal, the following entries are passed:

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLEMENT_BRG	PRINCIPAL_LIQD	Dr
LOAN_AC	PRINCIPAL_LIQD	Cr

For liquidation of Profit and Compensation Profit, the entries are:

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLEMENT_BRG	LIQD_AMT	Dr
INT_REC	INT_LIQD	Cr
PENAL_INT_REC	PENAL_INT_LIQD	Cr

You may encounter the following cases:

Case 1: Rollover only Principal Outstanding; Pay Profit & Compensation Outstanding

In this case, both ‘PRINCIPAL_LIQD’ and ‘PRINCIPAL_ROLL’ will be zero and hence the ‘LOAN_ACCOUNT’ balance is not affected.

The Outstanding Profit and Principal will be liquidated. Referring to the accounting entries above,

• INT_LIQD = Profit Outstanding
• PENAL_INT_LIQD = Compensation Profit Outstanding
• LIQD_AMT = INT_LIQD + PENAL_INT_LIQD (If Netting is ‘ON’ and both have the same Settlement Account).

Case 2: Rollover Principal + Profit Outstanding; Pay Compensation Outstanding

In this case,

• PRINCIPAL_LIQD = 0,
• PRINCIPAL_ROLL = INT_ROLL (which is the Profit Rolled over as Principal);
• PENAL_INT_LIQD = Compensation Profit Outstanding
• LIQD_AMT = PENAL_INT_LIQD (If Netting is on and both have the same Settlement Account).

Case 3: Rollover Principal + Profit + Compensation Outstanding

PRINCIPAL_ROLL = INT_ROLL + PENAL_INT_ROLL

LIQD_AMT = 0

Case 4 - a: Rollover Special Amount, Amount > Principal Outstanding

This is in effect a disbursement. Therefore,

PRINCIPAL_ROLL = SPECIAL_AMOUNT – PRINCIPAL_OUTSTANDING

Since the rolled over amount is greater than the outstanding principal, it will be positive and hence an increase in the finance amount is registered.

Case 4 – b: Rollover Special Amount, Amount < Principal Outstanding

This results in a decrease in Principal and hence

PRINCIPAL_ROLL = SPECIAL_AMOUNT – PRINCIPAL_OUTSTANDING will lead to a negative amount which will reduce the Dr Balance on the Finance Account.

14.3.11 SROL – Special Roll-over

This event is triggered when a roll-over is done and it involves a change in the currency, product and customer.

Advice Name	Description	Format Name
CLAMDADV	Amendment Advice	CL_AMD_ADV
CL_ROLL_ADV	Roll-over Advice	CL_ROLL_ADV

14.3.12 RNOG – Re-negotiation

This event is triggered when a customer is not being able to honor the terms and conditions of the credit. In such a situation, the client re-negotiates the terms and conditions of the credit before maturity date.

Advice Name	Description	Format Name
CLAMDADV	Amendment Advice	CL_AMD_ADV
PAYMENT_ADVICE	Payment Advice	CL_PMT_ADV

14.3.13 NOVA – Novation

This event is triggered when a primary customer is changed.

Advice Name	Description	Format Name
CLAMDADV	Amendment Advice	CL_AM­D_ADV

14.3.14 REVC – Finance Reversal

This event is triggered when a finance is withdrawn. This will pass the DSBR entries with a reversal of signs (-ve) for the amounts, as follows:

Accounting Role	Amount Tag	Dr /Cr
LOAN_AC	- PRINCIPAL	Dr
CR_SETTLE­MENT_BRG	- PRINCIPAL	Cr

14.3.15 REVP - Payment Reversal

The latest payment made, both auto and manual, will be reversed during this event. This will pass the ALIQ or MLIQ event selected with a reversal of signs for the amounts.

Reversal of Principal Repayment

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLE­MENT_BRG	- PRINCI­PAL_LIQD	Dr
LOAN_AC	- PRINCI­PAL_LIQD	Cr

 

Reversal of Profit Repayment

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLE­MENT_BRG	- INT_LIQD	Dr
INT_REC	- INT_LIQD	Cr

 

Reversal of Compensation Profit Repayment

Accounting Role	Amount Tag	Dr /Cr
DR_SETTLE­MENT_BRG	- PENAL_INT_LIQD	Dr
PENAL_INT_REC	- PENAL_INT_LIQD	Cr

 

14.3.16 REVN – Periodic Rate Revision

This will change the Floating Profit Rates based on the periodicity that you maintain.

Advice Name	Description	Format Name
CL_INT_STMT	Profit Statement Advice	CL_INT_STMT
RATECH_ADV	Rate Change Advice	CL_RTCH_ADV

14.3.17 ARVN – Automatic Rate Revision

This will change the Floating Rate as and when the rate changes.

Advice Name	Description	Format Name
CL_INT_STMT	Profit Statement Advice	CL_INT_STMT
RATECH_ADV	Rate Change Advice	CL_RTCH_ADV

14.3.18 UDCH – User Defined Element Value Changes

This event will be triggered whenever there is a change in the UDE values. This will be required to have Rate revision advices sent to the customers.

14.3.19 YACR – Yield to Maturity Discount Accrual

This event will be triggered for the computation of IRR. The following accounting entries will be passed:

Accounting Role	Amount Tag	Dr /Cr
EIMDISCRIA	EIM_ACCR	Dr
EIMDISCINC	EIM_ACCR	Cr
EIMPREMEXP	EIM_ACCR	Dr
EIMPREMPIA	EIM_ACCR	Cr

If refunding needs to be done as part of with complete pre-payment, the following entries should be passed in addition to the ones specified above:

Accounting Role	Amount Tag	Dr /Cr
<Charge Comp>_RIA	EIM_ADJ	Dr
CR_SETTL_BRIDGE	EIM_ADJ	Cr
DR_SETTL_BRIDGE	EIM_ADJ	Dr
<Charge Comp>_PIA	EIM_ADJ	Cr

14.3.20 CLIQ – Charge Liquidation

This event triggers the liquidation of charges applicable to the finance accounts. You need to set up the following entries for this event:

Accounting Role	Amount Tag	Dr /Cr
DR_SETTL_BRIDGE	<Charge Comp>_LIQD	Dr
<Charge Comp>_RIA	<Charge Comp>_LIQD	Cr
CR_SETTL_BRIDGE	<Charge Comp>_LIQD	Dr
<Charge Comp>_PIA	<Charge Comp>_LIQD	Cr

14.3.21 PACR – Principal Accrual

This event realizes the principal payment in different accounts. You need to set up the following entries for this event:

Accounting Role	Amount Tag	Dr /Cr
DEFPRINCIPAL	PRINCIPAL_PACR	Dr
PRINCIPALINC	PRINCIPAL_PACR	Cr

14.3.22 INSR – Insurance Renewal

This event triggers renewal of insurance. You need to set up the following entries for this event:

Accounting Role	Amount Tag	Dr /Cr
INSURANCE_REC	COMPONENT_REC	Dr
CR_SETTL_BRIDGE	COMPONENT_REC	Cr
CR_SETTL_BRIDGE	COMPONENT_PREMIUM	Dr
INSURANCE_ACC	COMPONENT_PREMIUM	Cr

14.3.23 TRFR Event

The accounting entries for transferring principal outstanding Profit accrued and overdue (if any)  to the new branch is:

Accounting Role	Amount Tag	Dr /Cr
LOAN_ASSET_GL	PRINCIPAL_OUTSTAND_TRFR_O­BRN	Cr
PROFIT_REC	PROFIT_OUTSTAND_TRFR_OBRN	Cr
LOAN_ASSET_GL	PRINCIPAL_OUTSTAND_TRFR_NBRN	Dr
PROFIT_REC	PROFIT_OUTSTAND_TRFR_NBRN	Dr

For CI with Unearned Profit, the unearned profit GL can be transferred with entries:

Accounting Role	Amount Tag	Dr /Cr
PROFIT_UID	PROFIT_UINT_TRFR_OBRN	Dr
PROFIT_UID	PROFIT_UINT_TRFR_NBRN	Cr

To transfer the receivable GL for products with UIDB event defined the following entries need to be maintained:

Accounting Role	Amount Tag	Dr /Cr
PROFIT_REC	PROFIT_UREC_TRFR_OBRN	Cr
PROFIT_REC	PROFIT_UREC_TRFR_NBRN	Dr

For vendor Payment, the vendor payable GL is transferred during the TRFR event.

Accounting Role	Amount Tag	Dr /Cr
VENDOR_PAYABLE_GL	PRINCIPAL_VPAY_TRN_OBRN	Dr
VENDOR_PAYABLE_GL	PRINCIPAL_VPAY_TRN_NBRN	Cr

Purchase Asset

The balance in purchase asset has to be transferred during the transfer event. Hence the accounting entries maintained fro TRFR is as follows:

Accounting Role	Amount Tag	Dr /Cr
PUR_ASSET_GL	PURCHASE_ASSET_TRFR_OBRN	Cr
PUR_ASSET_GL	PURCHASE_ASSET_TRFR_NBRN	Dr

Down Payment

The balance in down payment receivable has to be transferred during the transfer of event. Hence the accounting entries maintained for TRFR is:

Accounting Role	Amount Tag	Dr /Cr
DPRCVDGL	DOWNPAY_REC_TRFR_OBRN	Cr
DPRCVDGL	DOWNPAY_REC_TRFR_OBRN	Dr

A transfer advice attached with event TRFR displays the account number, old and new branches, transfer date, the finance outstanding as on transfer date and the schedule details. The advice specifies whether the transfer is done as part of branch merger, product transfer or customer initiated transfer.

Advice Name	Description	Format Name
CI_TRFR_ADV	Transfer Advice	CI_TRFR_ADV

14.3.24 TADJ Event

The event adjusts the income in the old branch in case of reversal of pre-transfer events and for back-dated events beyond the transfer date. You need to set up the following entries for the event:

Account Role	Amount Tag	Dr/Cr
PROFIT_INC	PROFIT_ADJINC_TADJ_OBRN	Dr
PROFIT _INC	PROFIT_ADJINC_TADJ_NBRN	Cr

14.3.25 AUTH Event

The event is sent when any asset is processed to be taken over and authorized.

Advice Name	Description
CL_TKOVER	Take Over Advice