5.3.1.3.9.1 Example #1
Commonly, General Ledger constitutes a starting point for building up Management Ledger. One way of enriching your Management Ledger is to exploit your Instrument level data to distribute balances to additional dimensions that are not present in your book-of-record General Ledger.
For this example, assume that your General Ledger Data is aligned in the Organizational Unit and GL Account Dimensions but is not aligned to the Product Dimension. For example:
- Your General Ledger records principal balances for Commercial Loans and Consumer Loans under 2 GL accounts for Branch 1 and Branch 2.
- Your Asset Instrument table contains thousands of loan records for the same 2 GL Accounts (Commercial Loans and Consumer Loans) for Branch 1 and Branch 2 for two different products.
Table 5-11 Summary of the Balances for Example 1
| Table | GL Account | Branch | Product | Balance | # of Loans |
|---|---|---|---|---|---|
| Management Ledger | Commercial Loan | 1 | — | $1,000 | — |
| Management Ledger | Commercial Loan | 2 | — | $2,000 | — |
| Management Ledger | Consumer Loan | 1 | — | $3,000 | — |
| Management Ledger | Consumer Loan | 2 | — | $4,000 | — |
| Asset Instrument | Commercial Loan | 1 | Land | $600 | 214 |
| Asset Instrument | Commercial Loan | 1 | Construction | $400 | 659 |
| Asset Instrument | Commercial Loan | 2 | Land | $1,400 | 814 |
| Asset Instrument | Commercial Loan | 2 | Construction | $600 | 907 |
| Asset Instrument | Consumer Loan | 1 | Auto | $2,100 | 273 |
| Asset Instrument | Consumer Loan | 1 | Personal | $900 | 622 |
| Asset Instrument | Consumer Loan | 2 | Auto | $2,600 | 861 |
| Asset Instrument | Consumer Loan | 2 | Personal | $1,400 | 590 |
Note that the Instrument balances and General Ledger balances reconcile perfectly. For example, the 214 Land loans and 659 Construction Loans under Branch 1 have balances totaling $1,000 that reconcile with the General Ledger balance of $1,000 for Commercial Loans under Branch 1.
To product align the Management Ledger:
- Build a Dynamic Driver Allocation Rule where the Source filters on the Management Ledger for the < Current Amount > macro for the Asset branch of your GL Hierarchy for Financial Element 100 (Ending Balance). Instead of utilizing a Rollup Node to filter on assets, construct a Data Element Filter for the Commercial Loans and Consumer Loans GL accounts. For this reason, only the Financial Element constraint is truly required.
- Set the Allocation Operator to Multiply.
- Set the Dynamic Driver to utilize Current Par Balance from your Asset Instrument Table. Set the Driver's Distribution Type to Percent Distribution. No dimensional constraints or other filters are necessary.
- Set the Credit Output to Management Ledger (Note: when posting outputs to Management Ledger, you must output to the < Current Amount > macro). Set < Same as Source > for each Key Processing Dimension.
- Set the Debit Output to Management Ledger; use < Match Source & Driver > for the GL Account and Organizational Unit dimensions, < Match Driver > for the Product dimension, and < Same as Source > for all other Key Processing Dimensions.
Written in this fashion, the Allocation Rule will (1) generate credit records that exactly offset the original ledger (debit) balances and (2) aggregate the instrument ending balances on a per GL Account, per Organization Unit, per Product basis and post the results to Management Ledger.
Table 5-12 Summary of the Management Ledger Rows before and after the Allocation Run
| Row Type | GL Account | Branch | Product | Balance |
|---|---|---|---|---|
| Initial Load | Commercial Loan | 1 | — | $1,000 |
| Initial Load | Commercial Loan | 2 | — | $2,000 |
| Initial Load | Consumer Loan | 1 | — | $3,000 |
| Initial Load | Consumer Loan | 2 | — | $4,000 |
| Credit | Commercial Loan | 1 | — | ($1,000) |
| Credit | Commercial Loan | 2 | — | ($2,000) |
| Credit | Consumer Loan | 1 | — | ($3,000) |
| Credit | Consumer Loan | 2 | — | ($4,000) |
| Debit | Commercial Loan | 1 | Land | $600 |
| Debit | Commercial Loan | 1 | Construction | $400 |
| Debit | Commercial Loan | 2 | Land | $1,400 |
| Debit | Commercial Loan | 2 | Construction | $600 |
| Debit | Consumer Loan | 1 | Auto | $2,100 |
| Debit | Consumer Loan | 1 | Personal | $900 |
| Debit | Consumer Loan | 2 | Auto | $2,600 |
| Debit | Consumer Loan | 2 | Personal | $1,400 |
Note the following:
- The original Ledger balances are exactly offset by the Allocation's Credit Records.
- The Allocation Rule produces a balanced accounting transaction- a set of Debit and Credit records that sum to zero.
- The Allocation Rule's Debit records effectively “product align” the Management Ledger.
Also, note that it was not necessary to supply any kind of GL Account or Organizational Unit filter in the Allocation's Source specification. The reason that doing so is not strictly speaking required is that your rule is written to < Match Source & Driver > in the GL Account and Organizational Unit dimensions. Since only 2 GL Accounts (Commercial Loans and Consumer Loans) and 2 Organizational Units (Branch 1 and Branch 2) are found in the driver data (the instrument records), the Source is effectively constrained to these values even if you do not explicitly filter on them in the Source specification.