B.4.12 DTAM: Contract Termination Amortization

Table B-39 Accounting Entries

Accounting Role	Amount Tag	Dr./Cr.
TRMN_EXP	TRMN_EXP_AMORT	DEBIT
TRMN_LOSS_DEF	TRMN_EXP_AMORT	CREDIT
TRMN_GAIN_DEF	TRMN_INC_AMORT	DEBIT
TRMN_INC	TRMN_INC_AMORT	CREDIT

Passed entries during the transfer of unrealized to realized income are as follows:

Table B-40 Realized Income

Gain/Loss	Dr./Cr.	Accounting Role	Amount Tag
Gain	Debit	TRMN_GAIN_DEF	TRMN_INC_AMORT
Gain	Credit	TRMN_INC_UNRLZ	TRMN_INC_AMORT
Loss	Debit	TRMN_EXP_UNRLZ	TRMN_EXP_AMORT
Loss	Credit	TRMN_LOSS_DEF	TRMN_EXP_AMORT

Table B-41 On Contract Maturity

Gain/Loss	Dr./Cr.	Accounting Role	Amount Tag
Gain	Debit	TRMN_INC_UNRLZ	TRMN_GAIN_PY
Gain	Credit	TRMN_INC	TRMN_GAIN_PY
Gain	Debit	TRMN_INC_UNRLZ	TRMN_GAIN_PY
Gain	Credit	TRMN_INC	TRMN_GAIN_PY
Loss	Debit	TRMN_EXP	TRMN_LOSS_CY
Loss	Credit	TRMN_EXP_UNRLZ	TRMN_LOSS_CY
Loss	Debit	TRMN_EXP	TRMN_LOSS_CY
Loss	Credit	TRMN_EXP_UNRLZ	TRMN_LOSS_CY

If the amount tag is of type Component_RLIQ/DLIQ_PY and if the accounting role pertains to unrealized income/expense, the head for the accounting role will be replaced by the previous year adjustment GL while passing accounting entries.

Note:

The transfer of income/expense from the previous year adjustment GL to the realized income/ expense GL happens only if the Track PY P&L Adjustment option is set as a branch preference through the ‘Branch Parameter’ screen.

For example, when processing an FRA contract which has the following interest components:

• DV_IN_INT – In leg
• DV_OUT_INT – Out leg

The previous year unrealized Income/Expense for the components are as follows:

• DV_IN_INT – 300 (Unrealized Income)
• DV_OUT_INT – 400 (Unrealized Expense)

Assuming the deal to be in net profit, with inflow as 500 and outflow as 275 the accounting entries passed during liquidation and final accrual are:

Table B-42 DILQ

Gain/Loss	Accounting Role	Amount Tag
Debit	CUSTOMER	500 (DV_IN_INT_DLIQ)
Credit	DV_IN_INT_RIA	500
Debit	DV_OUT_INT_PIA	275 (DV_OUT_INT_DLIQ)
Credit	Customer	225

Table B-43 DIAC

Gain/Loss	Accounting Role	Amount Tag
Debit	DV_IN_INT_RIA	75(DV_IN_INT_IAC)
Credit	DV_IN_INT_INC_UNRLZ	75
Debit	DV_OUT_INT_EXP_UNRLZ	45(DV_OUT_INT_EAC)
Credit	DV_OUT_INT_PIA	45

Table B-44 Moving Unrealized Income/Expense to real Income/Expense

Gain/Loss	Accounting Role	Amount Tag
Debit	Previous Yr AdjustmentGL	300 (DV_IN_INT_DLIQ_PY)
Credit	DV_IN_INT_INC	300
Debit	DV_IN_INT_INC_UNRLZ	200 (DV_IN_INT_DLIQ_CY)
Credit	DV_IN_INT_INC	200
Debit	DV_IN_INT_EXP	275 (DV_OUT_INT_DLIQ_PY)
Credit	Previous Yr AdjustmentGL	275

Note:

Use the Previous Year Adjustment GL maintained in Chart of Accounts to transfer income to the realized income GL from the unrealized GL when an arrears contract is liquidated, (DILQ event) or an advance contract completes accruals (DIAC event).

Because the previous year unrealized income would have already moved to the year ends P and L, (EYPL) GL after financial closure. The remaining amount if any is debited from the current year unrealized income GL