1. Loan Syndication
  2. Appendix A – Events, Advices and Accounting Entries
  3. Accounting Entries for BPMT / PPMT

13.3 Accounting Entries for BPMT / PPMT

BPMT Accounting Entry Setup for Borrower Product The

Table 13-64 BPMT Accounting Entry

Dr/Cr Accounting Role Amount Tag Remarks
Debit SYN_POOL FUND_PRINC Direct funding without fronting
Credit CUSTOMER FUND_PRINC -
Debit SYN_POOL FRONT_PRINC Funding due to bank Fronting
Credit CUSTOMER FRONT_PRINC -

The Payment message is linked to BPMT event for payment message generation at the time of disbursement for the borrower contract.

BPMT Accounting Entry Setup for Participant Product

Table 13-65 BPMT Accounting Entry

Dr/Cr Accounting Role Amount Tag Remarks
Debit CUSTOMER FUND_PRINC Direct funding without fronting
Credit SYN_POOL FUND_PRINC
Debit SIGHTING_FUND_GL FRONT_PRINC Funding due to bank Fronting
Credit SYN_POOL FRONT_PRINC -
Debit CUSTOMER FUND_FRONT Funding against bank fronting
Credit SIGHTING_FUND_GL FUND_FRONT -

PPMT Accounting Entry Setup for Borrower Product

Table 13-66 PPMT Accounting Entry Setup for Borrower Product

Dr/Cr Accounting Role Amount Tag Remarks
Debit CUSTOMER PRINCIPAL_FUND Principal amount – directly funded by borrower
Credit SYN_POOL PRINCIPAL_FUND -
Debit SIGHTING_FUND_GL PRINCIPAL_FRNT Principal amount - fronted by bank
Credit SYN_POOL PRINCIPAL_FRNT -
Debit CUSTOMER PRINCIPAL_FNFR Principal amount – Borrower to bank for fronting
Credit SIGHTING_FUND_GL PRINCIPAL_FNFR
Debit SF_SUSPENSE_GL PRINCIPAL_UFND Liquidation of unfunded amount
Credit SYN_POOL PRINCIPAL_UFND
Debit CUSTOMER MAIN-INT_FUND Liquidation of main interest component – directly funded by borrower
Credit SYN_POOL MAIN-INT_FUND
Debit SIGHTING_FUND_GL MAIN-INT_FRNT Liquidation of main interest component - fronted by bank
Credit SYN_POOL MAIN-INT_FRNT -
Debit CUSTOMER MAIN-INT_FNFR Liquidation of main interest component– Borrower to bank for fronting
Credit SIGHTING_FUND_GL MAIN-INT_FNFR -
Debit PNL Account COMP-INT_FUND Liquidation of main interest component – directly funded by borrower
Credit CUSTOMER COMP-INT_FUND -
Debit PNL Account COMP-INT_FRNT Liquidation of main interest component - fronted by bank
Credit SIGHTING_FUND_GL COMP-INT_FRNT -
Debit SIGHTING_FUND_GL COMP-INT_FNFR Liquidation of main interest component– Borrower to bank for fronting
Credit CUSTOMER COMP-INT_FNFR -
Debit CUSTOMER FEE-COMP_FUND Liquidation of FEE component – directly funded by borrower
Credit SYN_POOL FEE-COMP_FUND -
Debit SIGHTING_FUND_GL FEE-COMP_FRNT Liquidation of FEE component - fronted by bank
Credit SYN_POOL FEE-COMP_FRNT -
Debit CUSTOMER FEE-COMP_FNFR Liquidation of FEE component– Borrower to bank for fronting
Credit SIGHTING_FUND_GL FEE-COMP_FNFR -

PPMT Accounting Entry Setup for Participant Product

Table 13-67 PPMT Accounting Entry

Dr/Cr Accounting Role Amount Tag Remarks
Debit SYN_POOL FUND_LIQD Liquidation of amount funded directly without fronting.
Credit CUSTOMER FUND_LIQD -
Debit SYN_POOL FRONT_LIQD Liquidation of amount funded due to bank fronting.
Credit SIGHTING_FUND_GL FRONT_LIQD -
Debit SYN_POOL UNFUND_LIQD Liquidation of unfunded amount.
Credit SF_SUSPENSE_GL UNFUND_LIQD -
Debit SYN_POOL MAIN-INT_LIQD Liquidation of main interest component.
Credit CUSTOMER MAIN-INT_LIQD -
Debit CUSTOMER COMP-INT_LIQD Liquidation of compensatory component.
Credit PNL Account COMP-INT_LIQD -
Debit SYN_POOL FEE-COMP_LIQD Liquidation of FEE component.
Credit CUSTOMER FEE-COMP_LIQD -
The Payment message is linked to PPMT event for payment message generation at the time of repayment.

Accounting entry Examples:

Assume the contract is booked with amount of 2M with value date 01-JAN-2008, Maturity date 31-JAN-2008 with participants P1, P2, P3 with asset sharing ratio as 30, 20, 50 accordingly. (Example explained in appendix 3.4)

Table 13-68 Accounting entry

Participant Asset Sharing ratio Amount
P1 30 0.6M
P2 20 0.4M
P3 50 1M

New Disbursement INIT

On INIT of Drawdown, the following are the accounting entries:
  • Borrower:

    Table 13-69 Borrower

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    C1 01-Jan-08 SYN_POOL D 2M PRINCIPAL
    C1 01-Jan-08 SF_SUSPENSE_GL C 2M PRINCIPAL
  • Participants:
    • P1

      Table 13-70 P1

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P1 01-Jan-08 SYN_POOL C 0.6M PRINCIPAL
      P1 01-Jan-08 SF_SUSPENSE_GL D 0.6M PRINCIPAL
    • P2

      Table 13-71 P2

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P2 01-Jan-08 SYN_POOL C 0.4M PRINCIPAL
      P2 01-Jan-08 SF_SUSPENSE_GL D 0.4M PRINCIPAL
    • P3

      Table 13-72 P3

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P3 01-Jan-08 SYN_POOL C 1M PRINCIPAL
      P3 01-Jan-08 SF_SUSPENSE_GL D 1M PRINCIPAL
    Funding by few more investors and bank is fronting for few investors,
    • In Payment Processing Browser, Partial Fronting option is selected and only P2 is fronted with full amount.
    • P1 is not funding on 01-Jan-2008.
    • P2 is not funding on 01-Jan-2008.
    • P3 is funding full amount of 1M on 01-Jan-2008.
    The total amount to be disbursed to the borrower on value date will be 0.4M + 1M = 1.4M.

    Table 13-73 Total amount

    Participant Asset Sharing Ratio Amount Fronting Actual Receipt Date Funding amount Borrower Disbursement amount
    P1 30 0.6M N 01-Jan-08 0M 0M
    P2 20 0.4M Y 01-Jan-08 0M 0.4M
    P3 50 1M N 01-Jan-08 1M 1M

BPMT

BPMT accounting entry are as follows:

Table 13-74 BPMT

Ref No Value Date Accounting role DR/CR Amount Amount Tag
C1 01-Jan-08 SYN_POOL D 1M FUND_PRINC
C1 01-Jan-08 CUSTOMER C 1M FUND_PRINC
C1 01-Jan-08 SYN_POOL D 0.4M FRONT_PRINC
C1 01-Jan-08 CUSTOMER C 0.4M FRONT_PRINC

Participants:

  • P2

    Table 13-75 P2

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    P2 01-Jan-08 SYN_POOL C 0.4M FRONT_PRINC
    P2 01-Jan-08 SIGHTING_FUND_GL D 0.4M FRONT_PRINC
  • P3

    Table 13-76 P3

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    P3 01-Jan-08 SYN_POOL C 1M FUND_PRINC
    P3 01-Jan-08 CUSTOMER D 1M FUND_PRINC
New Payment LIQD
  • Assume Prepayment of 1M happens on 07-Jan-08.
  • Funding Amount Paid = 1M
  • Amount Paid = 1M*2M/1.4M = 1,428,571.43
  • Contract Balance = 2M - 1,428,571.43 = 571,428.57
  • Borrower Funded = 1.4M – 1M = 0.4M
  • Borrower UnFunded = 571,428.57 – 0.4M = 171,428.57
  • Rate= 10%
The accounting entries for the LIQD event is as follows:
  • Borrower:

    Table 13-77 P3

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    C1 07-Jan-08 SYN_POOL C 1,428,571.43 PRINCIPAL_LIQD
    C1 07-Jan-08 SF_SUSPENSE_GL D 1,428,571.43 PRINCIPAL_LIQD
  • Participants:
    • P1

      Table 13-78 P1

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P1 07-Jan-08 SYN_POOL D 428,571.43 PRINCIPAL_LIQD
      P1 07-Jan-08 SF_SUSPENSE_GL C 428,571.43 PRINCIPAL_LIQD
    • P2

      Table 13-79 P2

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P2 07-Jan-08 SYN_POOL D 285,714.29 PRINCIPAL_LIQD
      P2 07-Jan-08 SF_SUSPENSE_GL C 285,714.29 PRINCIPAL_LIQD
    • P3

      Table 13-80 P3

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P3 07-Jan-08 SYN_POOL D 714,285.71 PRINCIPAL_LIQD
      P3 07-Jan-08 SF_SUSPENSE_GL C 714,285.71 PRINCIPAL_LIQD

    P1 unfunded amount = .6M - 428,571.43 = 171,428.57

    P2 unfunded amount = 0.4M – 285,714.29 = 114,285.71

    Total Participant unfunded amount = 285,714.29

    Payment to the investors upon Borrower funding.

Payment to the Investors upon Borrower Funding PPMT

Accounting Entries for PPMT event is as follows:
  • Borrower:

    Table 13-81 Borrower

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    C1 07-Jan-08 CUSTOMER D 1,000,000 PRINCIPAL_FUND
    C1 07-Jan-08 SYN_POOL C 1,000,000 PRINCIPAL_FUND
    C1 07-Jan-08 SF_SUSPENSE_GL D 428,571.43 PRINCIPAL_UFND
    C1 07-Jan-08 SYN_POOL C 428,571.43 PRINCIPAL_UFND
  • Participants:
    • P1

      Table 13-82 P1

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P1 07-Jan-08 SYN_POOL D 428,571.43 UNFUND_LIQD
      P1 07-Jan-08 SF_SUSPENSE_GL C 428,571.43 UNFUND_LIQD
    • P2

      Table 13-83 P2

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P2 07-Jan-08 SYN_POOL D 285,714.29 FRONT_LIQD
      P2 07-Jan-08 SIGHTING_FUND_GL C 285,714.29 FRONT_LIQD
    • P3

      Table 13-84 P3

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P3 07-Jan-08 SYN_POOL D 714,285.71 FUND_LIQD
      P3 07-Jan-08 CUSTOMER C 714,285.71 FUND_LIQD

Funding by Few More Investors BPMT

At a later point of time on 08-Jan-2008, complete funding of 285,714.29 is happening from participant P1 and P2 for 171,428.57 and 114,285.71 respectively. BPMT event will be fired for Borrower and participant P1 and P2 on authorization of the funding information capturing in the Payment Processing browser.
  • Contract Balance = 571,428.57
  • Borrower Funded Amount = 0.4M + 171,428.57 = 571,428.57
  • Borrower UnFunded Amount = 571,428.57 - 571,428.57 = 0
The accounting entries for the new BPMT event will be as follows:
  • Borrower:

    Table 13-85 Borrower

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    C1 08-Jan-08 SYN_POOL D 171,428.57 FUND_PRINC
    C1 08-Jan-08 CUSTOMER C 171,428.57 FUND_PRINC
  • Participants:
    • P1

      Table 13-86 P1

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P1 08-Jan-08 SYN_POOL C 171,428.57 FUND_PRINC
      P1 08-Jan-08 CUSTOMER D 171,428.57 FUND_PRINC
    • P2

      Table 13-87 P1

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P2 08-Jan-08 SIGHTING_FUND_GL C 114,285.71 FUND_FRONT
      P2 08-Jan-08 CUSTOMER D 114,285.71 FUND_FRONT
  • P1 unfunded amount = 171,428.57- 171,428.57 = 0
  • P2 unfunded amount = 114,285.71 – 114,285.71 = 0
  • Total Participant unfunded amount = 0

Payment on Maturity Date LIQD

On LIQD of the remaining amount on Maturity Date 31-Jan-08,
  • Funding Amount Paid = 571,428.57
  • Amount Paid = 571,428.57*571,428.57 / 571,428.57= 571,428.57
  • Contract Balance = 571,428.57 - 571,428.57 = 0
  • Borrower Funded = 571,428.57 - 571,428.57 = 0
  • Borrower UnFunded = 0
  • Rate= 10%
The following will be the accounting entry.
  • Borrower:

    Table 13-88 Borrower

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    C1 31-Jan-08 SYN_POOL C 571,428.57 PRINCIPAL_LIQD
    C1 31-Jan-08 SF_SUSPENSE_ GL D 571,428.57 PRINCIPAL_LIQD
    C1 31-Jan-08 SYN_POOL C 7,045.01 MAIN-INT_LIQD
    C1 31-Jan-08 SF_SUSPENSE_ GL D 7,045.01 MAIN-INT_LIQD
  • Participants:
    • P1

      Table 13-89 P1

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P1 31-Jan-08 SYN_POOL D 171,428.57 PRINCIPAL_LIQD
      P1 31-Jan-08 SF_SUSPENSE_ GL C 171,428.57 PRINCIPAL_LIQD
      P1 31-Jan-08 SYN_POOL D 2,113.50 MAIN-INT_LIQD
      P1 31-Jan-08 SF_SUSPENSE_ GL C 2,113.50 MAIN-INT_LIQD
    • P2

      Table 13-90 P2

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P2 31-Jan-08 SYN_POOL D 114,285.71 PRINCIPAL_LIQD
      P2 31-Jan-08 SF_SUSPENSE_ GL C 114,285.71 PRINCIPAL_LIQD
      P2 31-Jan-08 SYN_POOL D 1,409.00 MAIN-INT_LIQD
      P2 31-Jan-08 SF_SUSPENSE_ GL C 1,409.00 MAIN-INT_LIQD
    • P3

      Table 13-91 P3

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P3 31-Jan-08 SYN_POOL D 285,714.29 PRINCIPAL_LIQD
      P3 31-Jan-08 SF_SUSPENSE_ GL C 285,714.29 PRINCIPAL_LIQD
      P3 31-Jan-08 SYN_POOL D 3,522.50 MAIN-INT_LIQD
      P3 31-Jan-08 SF_SUSPENSE_ GL C 3,522.50 MAIN-INT_LIQD

Payment to the Investors upon bank Fronting for the Maturity Schedule Payment PPMT

Bank is fronting for the maturity schedule payment on 31-Jan-08.
PPMT accounting entries are as follows:
  • Borrower

    Table 13-92 Borrower

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    C1 31-Jan-08 SIGHTING_FUND_GL D 571,428.5 7 PRINCIPAL_FRNT
    C1 31-Jan-08 SYN_POOL C 571,428.57 PRINCIPAL_FRNT
    C1 31-Jan-08 SIGHTING_FUND_GL D 7,045.01 MAIN-INT_FRNT
    C1 31-Jan-08 SYN_POOL C 7,045.01 MAIN-INT_FRNT
    C1 31-Jan-08 SIGHTING_FUND_GL C 1,033.27 COMP-INT_FRNT
    C1 31-Jan-08 PNL Account D 1,033.27 COMP-INT_FRNT
  • Participants:
    • P1

      Table 13-93 P1

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P1 31-Jan-08 SYN_POOL D 171,428.57 FUND_LIQD
      P1 31-Jan-08 CUSTOMER C 171,428.57 FUND_LIQD
      P1 31-Jan-08 SYN_POOL D 2,113.50 MAIN-INT_LIQD
      P1 31-Jan-08 CUSTOMER C 2,113.50 MAIN-INT_LIQD
      P1 31-Jan-08 PNL Account C 1,033.27 COMP-INT_LIQD
      P1 31-Jan-08 CUSTOMER D 1,033.27 COMP-INT_LIQD
    • P2

      Table 13-94 P2

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P2 31-Jan-08 SYN_POOL D 114,285.71 FUND_LIQD
      P2 31-Jan-08 CUSTOMER C 114,285.71 FUND_LIQD
      P2 31-Jan-08 SYN_POOL D 1,409.00 MAIN-INT_LIQD
      P2 31-Jan-08 CUSTOMER C 1,409.00 MAIN-INT_LIQD
      P2 31-Jan-08 PNL Account C 688.85 COMP-INT_LIQD
      P2 31-Jan-08 CUSTOMER D 688.85 COMP-INT_LIQD
    • P3

      Table 13-95 P3

      Ref No Value Date Accounting role DR/CR Amount Amount Tag
      P3 31-Jan-08 SYN_POOL D 285,714.29 FUND_LIQD
      P3 31-Jan-08 CUSTOMER C 285,714.29 FUND_LIQD
      P3 31-Jan-08 SYN_POOL D 3,522.50 MAIN-INT_LIQD
      P3 31-Jan-08 CUSTOMER C 3,522.50 MAIN-INT_LIQD

      Note:

      In the above case the residual amount in the PNL account will be the bank PNL for the fronting amount.

Borrower Funding for the Maturity Schedule Payment PPMT

On 31-Jan-08, Borrower funds for the maturity schedule payment.
The new PPMT accounting entries are as follows:
  • Borrower:

    Table 13-96 Borrower

    Ref No Value Date Accounting role DR/CR Amount Amount Tag
    C1 31-Jan-08 CUSTOMER D 571,428.57 PRINCIPAL_FNFR
    C1 31-Jan-08 SIGHTING_FUND_GL C 571,428.57 PRINCIPAL_FNFR
    C1 31-Jan-08 CUSTOMER D 7,045.01 MAIN-INT_FNFR
    C1 31-Jan-08 SIGHTING_FUND_GL C 7,045.01 MAIN-INT_FNFR
    C1 31-Jan-08 SIGHTING_FUND_GL D 1,033.27 COMP-INT_FNFR
    C1 31-Jan-08 CUSTOMER C 1,033.27 COMP-INT_FNFR
There are no entries on the participant side.

Parent topic: Appendix A – Events, Advices and Accounting Entries