Professional Documents
Culture Documents
Introduction
This section covers the basic of the accounting for each T24 module in order to provide
an overview in a centralised place. This document will be expanded upon for new and
existing applications and feedback from users would be appreciated.
In order to understand the accounting details in each application it is necessary to
understand the concept of accounting in T24 ; accordingly the next few sections will
provide a short explanation.
CRB Keys/Files
As mentioned earlier, T24 does not require General Ledger accounts, so how does it
maintain a General Ledger system? In order to understand this let us consider the
problems in systems that use General Ledger accounts. An account must be opened in
each currency you deal in. For transactions such as loans you may have many different
types such as corporate loans, inter-bank loans, personal loans, to name just a few. If you
need these broken down by residence, nationality and industry, which would mean for a
basket of 12, active currencies there would need to be at least 108 accounts! Obviously
you may not open these all at once, but over a period you will accumulate many accounts
and their administration would require a lot of effort.
In T24 the transaction data is used to feed the General Ledger, this is accomplished by
telling T24 how you wish to analyse the data. One of the first files set-up on
implementation is the CONSOLIDATE.COND , which has just two records viz.
ASSET&LIAB and PROFIT&LOSS . Here you specify where T24 searches for the
required data such as Industry code, Nationality, and Residence.
Once this file and the application parameters are in place, T24 is ready to create and
maintain a General Ledger. See the Reporting section of the User Guide for more details
on setting up the CRF system in T24 .
CONSOLIDATE.ASST.LIAB file
This is easier to explain in an example, as the examples below should prove, but in
essence consider this as a record in a simple database. The key is decided by T24 when
the underlying transaction is entered. In its simplest form it could represent just one
ACCOUNT where the conditions for the accountare unique (e.g. you only have one
Albanian Lek current account for a Mexican national who is a resident of Australia).
The record has details of the debit balance or credit balance in the account currency
together with the local equivalent and the last movements and the total accruals for the
matching accounts.
Now consider we want to report all debit balances for accounts, we can simply sum the
records in local currency or by account currency. In reality we would report them by
account type; industry; sector and so on.
The same concept is used when the transaction is a Money Market deal instead of an
account.
CONSOLIDATE.PRFT.LOSS file
Similar in concept and use to the CONSOLIDATE.ASST.LIAB , this file records the
balance and movements based on the P/L categories.
Again when building the General Ledger we can sum records or report them based on our
required decisions. For example income earned on current accounts by industry.
CRB Examples
Account based example
An ACCOUNT is opened and an entry is passed creating a debit balance, several days
pass and daily accruals are passed to reflect the overdraft interest being calculated.
The entries would be:
STMT.ENTRY
Credit
Account
STMT.ENTRY
Debit
Account
During the COB process T24 will create two records with CRF types of CREDIT (for the
Nostro account) and DEBIT (for the customer account) respectively. Accruals for the
overdrawn customer account are raised by T24 creating:
CATEG.ENTRY
RE.CONSOL.SPEC.ENTRY
At Month end
RE.CONSOL.SPEC.ENTRY
So during the accrual period the CONSOLIDATE.ASST.LIAB record will show the
balance as a DEBIT with the accrual increasing from USD 10.00 up to USD 100.00 at
application time when it will be cleared by the payment from the client, thus making the
new debit balance USD 100,100.00 . The P/L balance will be reflected on the
CONSOLIDATE.PRFT.LOSS increasing from day one until it is left with the USD
100.00 as actual income received.
Transaction based example
We agree (on the 20 April) to take on deposit a USD 1million Money Market contract
from 21 April to 25 April 1997.
USD 1million
dr
RE.CONSOL.SPEC.ENTRY
LIVECR for
cr
CATEG.ENTRY
RE.CONSOL.SPEC.ENTRY
Credit
Payable
to
The same each day until maturity when the accruals will be cleared and the interest paid
to the customer.
Maturity Date
STMT.ENTRY
Credit client
(prin.)
STMT.ENTRY
Credit
(int.)
RE.CONSOL.SPEC.ENTRY
RE.CONSOL.SPEC.ENTRY
client
At the end of the process we have paid interest of USD 4000 which is reflected on the
CONSOLIDATE.PRFT.LOSS record.
Fiduciary Accounting
Accounting entries are generated at various stages throughout the life of the contract.
These are all contingent as the deposit and placement are off balance sheet items for the
bank.
1) Order Unplaced
Only forward entries are raised i.e.
Dr
Drawdown A/C
Cr
Principal
A/C
Dr
Commission
(principal)
Liquidation (principal)
(commission)
Liquidation A/C
Cr
Interest
A/C
Liquidation (interest)
2) Order Placed
Forward Valued Order
Cr
CRF
FWDCONTCR
type (principal)
CRF
FWDCONTDB
type (principal)
3) Drawdown
Drawdown Order
Dr
Drawdown A/C
(principal)
Cr
(principal)
Commission in Advance
Dr
Commission
Liquidation A/C
(commission)
Cr
(commission)
(principal)
Cr
Drawdown A/C
(principal)
Cr
5) Interest Payment
Order
(accrued commission)
Cr
Interest
A/C
Liquidation (interest)
Commission
Liquidation A/C
Cr
CRF type
Comm
(commission)
PL Accr (commission)
Placement
Dr
Interest
A/C
Liquidation (interest)
Dr
Cr
Principal
A/C
6) Maturity
Order
(principal)
Liquidation (principal)
Commission in Arrears
Dr
Commission
Liquidation A/C
(commission)
Cr
(commission)
Placement
Dr
Principal
A/C
Liquidation (principal)
Cr
(principal)
Letters of Credit
Detailed Trade Finance accounting entries
This section outlines the accounting entries that can be passed for each event. The section
has been split into three. The first covers import letters of credit, the second covers export
letters of credit and the third covers charges.
Charges may be taken at any time but are shown here in a separate section to avoid
repeating the information against each transaction.
For each entry the following details are shown:
Amount.
For the following, the transaction code will be taken from the LC.PARAMETER file:
NEW
ISSUE
INC
ISSUE
DEC
ISSUE
LIQ
ISSUE
LIQ
ISSUE
ACPTCONTRA
Special
100,000
MAT
ACPTCONTRA
A drawing for 350,000 payable at sight sent for collection/acceptance by the customer for
whom the letter of credit was opened.
On day sent for collection:
Credit Items sent for collection"
Special
350,000
NEW
COLL
NEW
LIQ
ISSUE
LIQ
ISSUE
TRCOLL
PAY
COLL
LIQ
TRCOLL
A drawing for 225,000 payable at sight is sent for collection to the customer for whom
the letter of credit was opened and it is not paid.
On day sent for collection:
Credit "Items sent for collection"
Special
225,000
NEW
COLL
NEW
LIQ
TRCOLL
ISSUE
NCP
COLL
Special
225,000
LIQ
TRCOLL
REV
ISSUE
A drawing for 150,000 payable in 90 days is sent for collection to the customer for whom
a letter of credit was opened and is accepted or paid.
On day sent for collection:
Credit "Items sent for collection"
Special
150,000
NEW
COLL
NEW
LIQ
TRCOLL
ISSUE
If only payment received on after payment date the process as for a sight collection paid.
Otherwise if acceptance received before payment date then process as follows.
On day acceptance received:
Debit "Items sent for collection"
Special
150,000
PAY
COLL
LIQ
ISSUE
Special
150,000 NEW
Or "Acceptances executed by subsidiaries"
Special
150,000 NEW
ACPTHO
ACPTSUBS
LIQ
TRCOLL
A drawing for 175,000 payable in 90 days is sent for collection to the customer for whom
the letter of credit was opened and it is not accepted or paid.
On day sent for collection:
Credit "Items sent for collection"
Special
175,000
NEW
COLL
NEW
TRCOLL
LIQ
ISSUE
NCP
COLL
LIQ
TRCOLL
REV
ISSUE
When a LC matures with a balance of 250,000 yet to be drawn, then on the maturity date:
Debit "Outstanding credit unused".
Special
250,000
Collection Documents
MAT
ISSUE
Special
100,000
NEW
COLL
NEW
TRCOLL
NEW
COLL
LIQ
TRCOLL
DEC
TRCOLL
LIQ
COLL
Requested to advise a letter of credit which has been opened for 2 million. On the day the
letter of credit is input to T24 :
Credit "LC advised"
Special
2,000,000
NEW
ADVICE
Request to confirm
Requested to confirm a letter of credit, which has been opened for 1.5 million. On the day
the letter of credit is input to T24 :
NEW
CONFIRM
Request to open
NEW
OPEN
We are originally requested to advice a letter of credit for 2.5 million. We are
subsequently asked to confirm the same letter of credit.
On the day the original letter of credit is input to T24 :
Credit "LC advised"
Special
2,500,000
NEW
ADVICE
2,500,000
CON
ADVICE
ADV
CONFIRM
2,500,000
NEW
ADVICE/CONFIRM
1,500,000
NEW
ADVICE
1,000,000
NEW
CONFIRM
2,500,000
REV
ADVICE/CONFIRMN
A drawing for 300,000 payable at sight is made then on the day payment is made:
Debit "Outstanding credit unused"
Special
300,000 LIQ
ADVICE/CONFIRM
A drawing for 300,000 payable at sight is made where the available confirmed portion
under a partially confirmed LC is 200,000, then on the day payment is made:
Debit "Outstanding credit unused"
Special
200,000
Debit "Outstanding credit unused"
Special
100,000
LIQ
CONFIRM
LIQ
ADVICE
PAYCR
Debit nostro through which payment will be received from the other
bank.
Stmt
300,000
PAYDR
Note: A message (Swift, telex, etc.) will be sent to this bank to advise that payment has
been made under a letter of credit and requesting reimbursement.
CONFIRM/ADVICE
NEW
ACPT
A drawing for 100,000 payable in 90 days is accepted where the confirmed portion
available under a Partially confirmed LC is 75,000.
On day of acceptance:
Debit "Outstanding credit unused".
Special
75,000
LIQ
CONFIRM
Debit "Outstanding credit unused".
Special
25,000
LIQ
ADVICE
Debit "Customers liabilities for acceptance".
Special
100,000 NEW
ACPTCONTRA
Credit "Outstanding acceptances"
Special
100,000
NEW
ACPT
MAT
ACPT
The following entries will be raised online if the status is changed to MA online.
Otherwise entries will be raised as part of the Close of Business processing.
PAYCR
Debit nostro through which payment will be received from the other
bank.
Stmt
100,000
PAYDR
Discount of own acceptance (without a load amount)
A drawing for 200,000 is accepted payable in 90 days and is then presented for discount.
On day of acceptance:
Debit "Outstanding credit unused".
Special
200,000
LIQ
ISSUE
NEW
ACPT
On day of discounting assume this to be the same as acceptance day and that the amount
for discount is 75 per day, which gives a total of 6,750 over the 90 days:
The special entries will be raised as part of the Close of Business, but the Stmt entry will
be raised online.
Note, for the "Own acceptances discounted" and "Discount received not yet earned" the
CRF key will need to be created using the customer to whom the discount has been
given.
Debit "Own acceptances discounted".
Special
200,000 NEW
Credit "Discount received not yet earned".
Special
6,750 CAP
LIVEDB
At the first month end as part of the Close of Business run an accrual will be made for the
current month assuming 10 days in month 1:
Debit "Discount received not yet earned".
Special
750 ACC
Credit profit and loss for discount earned using the discount category
code from LC.PARAMETER.
Categ
750 DISPL
At the other two month ends as part of the Close of Business run an accrual will be made
for the current month assuming 31 days in each of the months:
Debit "Discount received not yet Earned".
Special
ACC
2,325
Credit Profit and loss for discount earned using the discount category
code from LC.PARAMETER.
Categ
2,325 DISPL
On day expiry of 90 Days:
These entries will be raised as part of the Close of Business run:
Credit "Customers liabilities for acceptance".
Special
200,000 MAT
ACPTCONTRA
Debit "Outstanding acceptances"
Special
200,000
MAT
ACPT
Credit P&L for discount earned using the category code from
LC.PARAMETER.
Categ
1,350 DISPL
Credit "Own acceptances discounted".
Special
200,000 MAT
LIVEDB
Debit nostro through which payment will be received from the other
bank.
Stmt
200,000 PAYDR
Discount of own acceptance (with a load amount) .
A drawing for 400,000 is accepted payable in 90 days and is then presented for discount.
On day of acceptance:
Debit "Outstanding credit unused".
Special
400,000
LIQ
ISSUE
NEW
ACPT
On day of discounting assume this to be the same as acceptance day and that the amount
for discount works out at being 150 per day giving a total of 13,500 over the 90 days and
the extra load amount is 50 per day giving a total of 4,500 over the 90 days:
The special entries will be raised during Close of Business, but the Stmt entry will be
raised online.
Note for the "Own acceptances discounted" and "Discount received not yet earned" the
CRF key will need to be created using the customer to whom the discount has been
given.
Debit "Own acceptances discounted".
Special
400,000 NEW
Credit "Discount received not yet earned".
Special
13,500 CAP
LIVEDB
Discount
Category
from LC Parameter.
At the first month end as part of the Close of Business run an accrual will be made for the
current month assuming 10 days in month 1:
Debit "Discount received not yet earned".
Special
ACC
1,500
Credit profit and loss for discount earned using the discount category
code from LC Parameter.
Categ
1,500 DISPL
Debit "Discount (load) received not yet earned".
Special
ACC
Load category from LC
500
Parameter.
Credit profit and loss for discount (load) earned using the load category
code from LC Parameter.
Categ
500 DISPL
At the other two month ends as part of the Close of Business run an accrual will be made
for the current month assuming 31 days in each of the months:
Debit "Discount received not yet earned".
Special
ACC
4,650
Credit Profit and loss for discount earned using the discount category
code from LC Parameter.
Categ
4,650 DISPL
Debit "Discount (load) received not yet earned".
Special
ACC
Load category from LC
1,550
Parameter.
Credit Profit and loss for discount (load) earned using the load category
code from LC Parameter.
Categ
1,550 DISPL
On day of expiry, of 90 Days, these entries will be raised as part of the Close of Business
run:
Credit "Customers liabilities for acceptance".
Special
400,000
MAT
MAT
ACPTCONTRA
ACPT
Credit profit and loss for discount earned using the discount category
code from LC Parameter.
Categ
2,700 DISPL
Debit "Discount (load) received not yet earned".
Special
ACC
Load category from LC
900
Parameter.
Credit profit and loss for discount (load) earned using the load category
code from LC Parameter.
Categ
900 DISPL
Credit "Own acceptances discounted".
Special
400,000 MAT
LIVEDB
Debit nostro through which payment will be received from the other
bank.
Stmt
400,000 PAYDR
Sight collection paid
A drawing for 350,000 payable at sight sent for collection to the Bank that opened the LC
and payment is made.
On day sent for collection:
Credit "Items sent for collection"
Special
350,000
On day payment received:
Debit "Outstanding credit unused".
NEW
COLL
Special
350,000
LIQ
ISSUE
PAY
COLL
PAYCR
Debit nostro through which payment was received from the other bank.
Stmt
350,000 PAYDR
Sight collection - not paid
A drawing for 225,000 payable at sight is sent for collection to the bank that opened the
letter of credit but it is not paid.
On day sent for collection:
Credit "Items sent for collection"
Special
225,000
NEW
COLL
NCP
COLL
A drawing for 350,000 payable at sight sent for collection to the bank that opened the
letter of credit. Payment is made to the exporter under reserve and payment is received
from the opening bank.
On day sent for collection:
Credit "Items sent for collection"
Special
350,000
NEW
COLL
PAYRES
350,000
RESCR
LIQ
ISSUE
PAY
COLL
PAYRES
A drawing for 225,000 payable at sight is sent for collection to the bank that opened the
LC. Payment is made to the exporter under reserve and the payment is not received from
the opening bank.
On day sent for collection:
Credit "Items sent for collection"
Special
225,000
NEW
COLL
PAYRES
225,000
RESCR
NCP
COLL
PAYRES
A drawing for 150,000 payable in 90 days is sent for collection to the customer for whom
the letter of credit was opened and is accepted or paid.
On day sent for collection:
Credit "Items sent for collection"
Special
150,000
NEW
COLL
If the payment is received on or after the payment date then accounting is the same as for
a sight collection paid. Otherwise if the acceptance is received before payment date then
process as follows.
On day acceptance received:
Debit "Items sent for collection"
Special
150,000
PAY
COLL
LIQ
ISSUE
NEW
ACPT
NEW
ACPT
The following entries will be raised online if the status is changed to MA online.
Otherwise entries will be raised as part of the Close of Business processing.
Credit customer requesting payment.
Stmt
150,000
PAYCR
Debit nostro through which payment was received from the other bank.
Stmt
150,000
PAYDR
Usance collection - not accepted or paid
A drawing for 175,000 payable in 90 days is sent for collection to the customer for whom
the letter of credit was opened and is not accepted/paid.
On day sent for collection:
Credit "Items sent for collection"
Special
175,000
NEW
COLL
NCP
COLL
For export letter of credit it is possible that payment can be made to the customer at the
time the documents are presented. This payment is made under reserve meaning that if
there is any problem the money can be claimed back.
For sight collections the entries that will be raised are shown.
Similar processing can happen in Usance collections.
When a letter of credit matures with a balance of 250,000 yet to be drawn, then on the
maturity date:
Debit "Outstanding credit unused".
Special 250,000
MAT
ISSUE
Charges
Charges applied immediately and not accrued
Where a charge for 500 is applied directly and not accrued then the following entries are
raised on the date of the charge. These entries will be raised online, when the charges are
entered.
Debit Customer paying
Stmt
FTDR
500
Credit profit and loss using the category code from the charge (see note
1)
Categ
FTCR
500
Charges applied immediately and amortised
Where a charge for 600 is applied directly and accrued over 3 months then the following
entries are raised.
At time of charge (stmt entry raised online, special entry raised as part of the Close of
Business run):
Debit Customer paying
Stmt
Credit "Charges received not yet earned".
Special
CAP
600
600
FTDR
At each month end, as part of the Close of Business run, assuming charges accrued over
three equal months:
Credit profit and loss for charges using the category code from the
charge (see note 2)
Categ
AMRT
200
Charges claimed from beneficiary and paid
Where charges for 700 are claimed from some one else then the following entries are
raised.
At time of claiming charge (Categ raised online, special during Close of Business):
Debit "Charges claimed"
Special
CLM
700
Credit profit and loss for the charges using the category code for charge
(see note 1)
Categ
CENCPL
700
When charges are paid (Stmt raised online, special during Close of Business):
Credit "Charges claimed"
Special
PAY
700
CENCPY
Category
code
claiming charges
PARAMETER)
Customer
charge.
for
(LC.
paying
Where charges for 800 are claimed from some one else but are not paid.
At time of claiming charge (Categ raised online, special during Close of Business):
Note 1
Note 2
Teller Accounting
It is possible to raise entries through the TELLER application that have exposure splits on
them. This has been illustrated with an example shown below:
Customer A makes a deposit for $12,000 of which $4,000 in cash and a $1,000 Cashiers
Check is made immediately available. The transactions made are described as under:
The total current asset and liability position for each foreign currency is revalued at spot
rate, and the profit or loss is posted as specified in the AL section of the
REVALUATION.PARAMETER record.
Deal revaluation
Where contracts other than Foreign Exchange generate forward FX positions and
consequent revaluation profit and loss they can be revalued separately. The requirements
can be specified in REVALUATION.PARAMETER .
REVALUATION.PARAMETER
The revaluation is calculated on spot or rebate basis as specified for the application in the
parameter record.
Asset/Liability revaluation is specified in the revaluation parameters as a special
application.
It is now possible to mask accounting entries, where entries have either been posted
incorrectly and had to be reversed out, or other financial postings that customers do not
want on their statements.
Masking is also necessary because some customers reconcile directly against the
statements they receive from the banks and unexpected entries can cause confusion to
their reconciliation. This is especially true when the statement is delivered electronically
and the customer uses it to reconcile internally within their computer systems.
Masking will only apply to statements only. The entry will not be removed from the
account and the transaction will not be deleted it, it just wont show on the statement.
Setting up the statement masking
A new field called MASK.PRINT has been added to the STMT.ENTRY file, which will
indicate whether certain statement entries should be masked from printing, or not. To
update the MASK.PRINT field a new application called AC.PRINT.MASK has been
produced to allow users to manually go in and flag statement entries that customers do
not want to see on their statements. The selection of entries to be masked for a particular
account will be assisted by the provision of STMT.ENTRYenquiries.
Once the statement entries have been captured into AC.PRINT.MASK application, the
system will then perform routine validations on the selected entries, firstly to ensure the
integrity of the selected items and to also make sure that the net movement of the selected
entries is zero.
Once all the routine validations have taken place, the statement print programs or
formatting enquires must now check the MASK.PRINT field on the STMT.ENTRY
record, if the value of the field is true then the entry should not be displayed.
AC.PRINT.MASK
When all the entries have been captured you can then commit and authorise the record,
but the system will make sure that the net movement between the statement entries
captured is zero.
Once the authorisation takes place the relevant STMT.ENTRY records will be either
masked or unmasked for printing at a later stage.