6.3 Events and Accounting Entries for Discount Accrual

While defining the accounting entries for the Loans and Bills modules you must identify the events and accounting entries that are required for discount accrual fee accounting. One of these is the YTM based Discount Accrual (YACR) event. It is meant to indicate the periodic discount accruals for the contract.

The Accounting Roles that should be associated with the event YACR are:

Accounting Role	Description	Acquisition Type	Product Type
EIMDISCRIA	Effective Interest Based Discount To Be Accrued	Discount	Asset
EIMDISCINC	Effective Interest Based Discount Accrued Till Date	Discount	Asset
EIMPREMPIA		Premium	Asset
EIMPREMEXP		Premium	Asset
EIMINTAD-JREC		Par	Asset
EIMINTADJINC		Par	Asset
EIMDISCPIA		Discount	Liability
EIMDISCEXP		Discount	Liability
EIMPREMRIA		Premium	Liability
EIMPREMINC		Premium	Liability
EIMINTAD-JPAY		Par	Liability
EIMINTADJ-EXP		Par	Liability

The Amount Tags for the YACR event:

Amount Tag	Description
EIMDISC_ACCR	Net Discount Accrual amount for the processing day
EIMDISC_ADJ	Discount Accrual Refund Amount

The following entries should be maintained for the YACR event:

Accounting Role	Amount Tag	Dr/Cr Indicator
EIMDISCRIA	EIMDISC_ACCR	Debit
EIMDISCINC	EIMDISC_ACCR	Credit

Note:

The account head mapped to the accounting role EIBDISCOUNT_RIA and account heads mapped to the subsystem specific RIA (Received in Advance) accounting roles should be maintained as the same account. For discount accrual, you must also maintain the following accounting set-up for the Charge Liquidation (LIQD/INIT/VAMI/ROLL/CAMD) event. This is in addition to the normal accounting set-up that you would define for the charge liquidation event.

Accounting Role	Description
component_RIA*	Charge amount Received in Advance
Charge comp_RIA	Charge amount Received in Advance
<Charge Comp>PIA	Charge amount Paid in Advance
<Fee Comp>RIA	Fee Amount Received in Advance

* The component is replaced by the appropriate Charge Rule.

Amount Tag	Description
component_DISC*	Charge Amount to be discounted
<Charge comp>_DISC(Existing Tag)	Charge Discount Amount
<Charge Comp>_PREM	Charge Premium Amount
<Fee Comp>_DISC	Fee Discount Amount

* The component is replaced by the appropriate Charge Rule.

You should maintain the following for the normal accounting entry setup for LIQD event:

Amount Tag	Description
EIMDISC_ADJ - (Existing Tag)	Discount Accrual Refund Amount
EIMPREM_ACCR	Net Premium Accrual amount for the processing day
EIMINTADJ_ACCR	Interest Adjustment Amount
EIMPREM_ADJ	Premium Accrual Refund Amount

You should maintain the following accounting roles for setting up accounting entries for the YACR event:Along with the normal accounting entry setup for the LIQD event, you must also maintain the following accounting entries.

Accounting Role	Amount Tag	Dr/Cr Indicator
EIMDISCRIA	EIMDISC_ADJ	Debit
CUSTOMER	EIMDISC_ADJ	Credit
EIMDISCRIA	EIMDISC_ADJ	Debit
CUSTOMER	EIMDISC_ADJ	Credit
CUSTOMER	EIMPREM_ADJ	Debit
EIMPREMPIA	EIMPREM_ADJ	Credit
EIMPREMRIA	EIMPREM_ADJ	Debit
CUSTOMER	EIMPREM_ADJ	Credit
CUSTOMER	EIMDISC_ADJ	Debit
EIMDISCPIA	EIMDISC_ADJ	Credit

The following entries should be maintained for the liquidation event.

Accounting Role	Amount Tag	Dr/Cr
<Charge rule>_RIA	<Charge rule>_DISC	Credit
CUSTOMER	<Charge rule>_DISC	Debit
<Charge rule>_INC	<Charge rule>_LIQD	Credit
CUSTOMER	<Charge rule>_LIQD	Debit
CUSTOMER	<Charge rule>_DISC	Debit
<Charge rule>_RIA	<Charge rule>_DISC	Credit
CUSTOMER	<Charge rule>_PREM	Credit
<Charge rule>_PIA	<Charge rule>_PREM	Debit
CUSTOMER	<Charge rule>_PREM	Debit
<Charge rule>_RIA	<Charge rule>_PREM	Credit
CUSTOMER	<Charge rule>_DISC	Credit
<Charge rule>_PIA	<Charge rule>_DISC	Debit

You should maintain the following accounting entries for the YACR event:

Accounting Role	Amount Tag	Dr/Cr
EIMDISCRIA	EIMDISC_ACCR	Debit
EIMDISCINC	EIMDISC_ACCR	Credit
EIMPREMEXP	EIMPREM_ACCR	Debit
EIMPREMPIA	EIMPREM_ACCR	Credit
EIMINTADJREC	EIMINTADJ_ACCR	Debit
EIMINTADJINC	EIMINTADJ_ACCR	Credit
EIMPREMRIA	EIMPREM_ACCR	Debit
EIMPREMINC	EIMPREM_ACCR	Credit
EIMDISCEXP	EIMDISC_ACCR	Debit
EIMDISCPIA	EIMDISC_ACCR	Credit
EIMINTADJEXP	EIMINTADJ_ACCR	Debit
EIMINTADJPAY	EIMINTADJ_ACCR	Credit