4.14.1 Extraction and Generation of Event based Accounting Entries

This topic describes about the extraction of event based accounting entries.

A batch process extracts the relevant accounting entries according to the GL setup for the fund, and generates the accounting entries that would be passed, automatically at EOD.

For cash nominee accounts, no theoretical entries are generated at the AMC when the GL extract is generated, since these accounts are of the Distributor.

The System checks whether the transaction date is a holiday in any of the calendars. The settlement date (Contractual Settlement Date) is derived based on the mode of payment, payment lag maintained for the fund.

As of the unitization or allocation date, the theoretical (cash flow indicator) entries, if indicated in the GL maintenance, are generated. At the Distributor, the accounting entries generated for the underlying transaction reflect the movement of funds to Distributor, unit holder and fund accounts. At the AMC, the accounting entries generated for the underlying transaction reflect the credit or debit to fund investment, fund manager, Distributor, rounding and transaction charge account.

The payment date for the underlying transaction is also arrived at according to the transaction payment mode. The settlement process is initiated on the date on which payment clearing is performed, which is tracked as the Actual Settlement Date. At the Distributor, the accounting entries generated reflect the movement of funds between the fund receivable account and the Distributor. At the AMC, the accounting entries generated reflect the movement of funds between the fund account and unit holder pooled investment account.

For cash based transactions, the unitization and payment date are the same and both theoretical and actual entries are passed as on this date.