1.56 Maintain MIS Cost Codes

This topic explains systematic instructions to maintain MIS cost codes.

An MIS cost code represents the notional cost incurred for a transaction. An MIS cost code can be attached either to an account or to a contract, in the following manner:

1. The user can link a Cost Code to an account class. This will default to the accounts maintained under the account class. The user can change this default. Alternatively, the user can link an MIS Cost Code to an account when maintaining it.
2. When creating a product, the user can identify the cost codes against which contracts involving the product should be reported.
3. When processing a contract, the Cost Code identified for the product (the contract involves) will automatically default. These defaults can be changed. If cost codes have not been identified for the product, the user can identify one for the contract.

The notional cost will be reported in the profitability report.

Note:

The fields which are marked in asterisk are mandatory.

1. On Homescreen, type MIDXCODE in the text box, and click Next.
   The MIS Cost Code Maintenance screen displays.

   Figure 1-57 MIS Cost Code Maintenance

   
   

   
   Description of "Figure 1-57 MIS Cost Code Maintenance"

   
   
2. On the MIS Cost Code Maintenance screen, specify the fields.

   For more information on fields, refer to the field description table.

   Table 1-71 MIS Cost Code Maintenance - Field Description

   Field	Description
   Type	Specify the type from the drop-down list. Number of Transactions - This applies to calculating the cost of processing a transaction involving an account. The user can indicate the amount to be considered as the notional cost for each transaction. For example, The user may incur a certain amount for every transaction process of savings account in a particular category. This cost could be different for processing transactions in a different type of savings account or for current accounts. The user should define different MIS Cost Codes and link them to the appropriate account classes. Number of Events - The notional cost applicable for processing an event can be defined as a cost code. This applies to a contract. For example, for processing an event in the life-cycle of a loan, the user may want to attach a certain cost. The user can define a cost code for it and link it to the product. Similarly, The user can define a different notional cost for different events in the life cycle of a contract. Thus, the user can have a cost code for initiating a loan, one for liquidating interest, and so on, and link them to the product with the appropriate event codes. The defined notional cost will be taken as the cost per event. Duration - These changes are applied to a contract. The notional cost, in this case is calculated on the basis of a specific duration. This notional cost is defined by a cost code. The following example illustrates how this cost is applied to a contract. For example, if a loan is live for a month, the notional cost incur is a specific amount. The user would define a duration-based cost code, define the periodicity as monthly. For every month a loan linked to the cost code is live, the notional cost will be applied.
   Cost Code	Specify the cost code. The notional cost, along with the currency in which it is expressed should be indicated in the cost code. The cost will be applied based on the Cost Code type, Refer to the following table unresolvable-reference.html#GUID-C1C4BE2C-FC39-49AB-8F74-A342A9F1B8CE__TABLE_AQM_4D4_BTB If a currency conversion is involved during reporting, the prevailing conversion rate will be used.
   Description	Enter the description of the cost code.
   Periodicity	Select the periodicity from the drop-down list: Monthly Quarterly Half Yearly Yearly This is the periodicity at which the costs defined have to be applied. In the profitability report, the notional cost reported would depend on the periodicity defined for the cost code. For a Quarterly, Half Yearly, or Yearly periodicity, specify the first month of application. The subsequent application months would be computed based on this.
   Currency	Click Search and specify the currency from the list of values.
   Amount	Specify the amount.
   Applied Month	Select the applied month from the drop-down list. January February March April May June July August September October November December

   Table 1-72 Cost Code and Description

   Cost Code Type	Description
   Number of Transactions	The amount is taken as the cost per transaction.
   Event	The amount is taken as the cost per event.
   Duration	The amount is taken as the cost for the period defined as the periodicity, for the cost code.

   On an existing MIS Cost Code record, the user can perform any of the following operations (if any function under the Actions menu is disabled, it means that the function is not allowed for the record):

   • Amend the details of an MIS Cost Code
   • Authorize an MIS Cost Code
   • Copy the details the MIS Cost Code onto a new one
   • Print the details of an MIS Cost Code
   • Delete an MIS Cost Code

   Refer to the manual on Common Procedures for details of these operations.
3. Click Exit to end the transaction.