Accrual of ICCB Components

When the users are defining the interest, commission, charge or fee components (ICCB components) for an MM product, the user must specify whether accruals have to be done for the accruable ICCB components. The user can specify this through the Product ICCB Details screen.

If accruals must be done, the frequency of accrual must also be specified for the product (through the Product Preferences screen), at the time of product definition.

For all deals for which accruals fall due today, the Automatic Contract Update function will pass the accrual entries. Accrual of interest, commission, charge or fee is done during the end of day processing of the Automatic Contract Update function.

In some cases, for example, if a manual liquidation is done, the accrual entries is passed immediately by the system. If this falls on a holiday, the accruals is done as per your holiday handling specifications for automatic processes, in the Branch Parameters screen.

• If the user specified that processing has to be done today (the last working day before the holiday) for automatic events right up to the day before the next working day, the events falling on the holiday will be processed during end of day on the last working day before the holiday.
• If the user has specified that processing has to be done only up to the System Date (today), then only the events scheduled for today (the last working day before the holiday) will be processed. The events of the holiday will be processed on the next working day after the holiday, during beginning of day processing.

The accrual and income accounts will be picked up based on your definition in the Chart of Accounts. An Accrual Control Journal is generated by the Automatic Contract Update function, reporting the details of the accruals performed.

For a placement on which there is a default in payment, the user can specify that aging analysis must be done. This analysis involves the change of status of a deal. When the status is changed, the user can also specify that the accruals on the deal must be stopped. For such deals, the accrual entries will not be passed; they will only be calculated and reported in the Accrual Control Journal under ‘Memo Accruals’.

Contents of the Accrual Control Journal

The memo accrual function will give the user the latest accrual amounts for all components of a live deal without actually passing the accrual entries. The memo accrual function generates the Memo Accrual Control Journal that reports the accrued amounts for the various components of the deal, (like interest, commission, charge or fee) that are due on each deal as of the current system date.