13.9.9.2 Example #2
The same results from Example #1 above can be obtained from a Static Driver rule:
- Source = Instrument ending loan balances.
- Allocation Operator = “times 1.00”.
- Debit = < Same as Source > for all dimensions.
- Credit = < Same as Source > for Organization Unit and GL Account and N/A for Product.
The reason to use the Dynamic Driver rule type to perform the Management Ledger Reclassification is that the instruments do not always reconcile to General Ledger due to timing differences or other reasons. Your institution has a threshold tolerance level for such outages and tolerance levels will vary from one institution to another. Moreover, you may wish to product align expenses, fees, or other Management Ledger balances using instrument balances (or other measures) as proxies that would never reconcile to the Management Ledger balances.
Table 13-4 Summary of the Instrument Data that does not reconcile to the General Ledger data
| 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 | — |
| Loans | Commercial Loan | 1 | Land | $603 | 214 |
| Loans | Commercial Loan | 1 | Construction | $399 | 659 |
| Loans | Commercial Loan | 2 | Land | $1,401 | 814 |
| Loans | Commercial Loan | 2 | Construction | $604 | 907 |
| Loans | Consumer Loan | 1 | Auto | $2,106 | 273 |
| Loans | Consumer Loan | 1 | Personal | $903 | 622 |
| Loans | Consumer Loan | 2 | Auto | $2,597 | 861 |
| Loans | Consumer Loan | 2 | Personal | $1,399 | 590 |
Note that total Commercial Loans under Branch #1 is now $1,002 whereas the ledger balance is only 1,000. A simple Static Driver allocation that aggregated these balances to the Management Ledger would create one credit record for $1,002 and two debit records totaling $1,002. This would leave a net “unaligned” balance of $2. The Dynamic Driver allocation, however, would still create a single credit record for Commercial Loans under Branch 1 in the Management Ledger for $1,000; and it would still create two debit records for Commercial Loans under Branch 1 totaling $1,000.
Table 13-5 Summary of data Dynamic Driver allocation creates in Example #2
| 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 | $601.80 |
| Debit | Commercial Loan | 1 | Construction | $398.20 |
| Debit | Commercial Loan | 2 | Land | $1,397.51 |
| Debit | Commercial Loan | 2 | Construction | $602.49 |
| Debit | Consumer Loan | 1 | Auto | $2,099.70 |
| Debit | Consumer Loan | 1 | Personal | $900.30 |
| Debit | Consumer Loan | 2 | Auto | $2,599.60 |
| Debit | Consumer Loan | 2 | Personal | $1,400.40 |