EOMPO - Month End Postings (GL)
The purpose is to update bookkeeping for the month being closed such that the P&L (PLR) and Inventory Balance (BAL) reflect the trading records of the month-end database (FREEZE).
There are 2 menu options:
i) EOMPO executes on the end-of-month FREEZE and produces TA documents
ii) EODPO executes on the end-of-day FREEZE and produces IJ documents; with their reversal postings for the following working day.
EOMPO replaces the run of the last working day of the month. It automatically reverses the IJs created on that run. If EOMPO has been run, the EODPO may not be run for the last working day of the month unless the EOMPO run has been reversed.
On the front screen there is a View button to view the documents generated in previous executions with a feature to reverse the accounting entries. The reversal process of the documents will then aenable a rerun of the original procedure.
There are batch command procedures that Hivedome can setup to automate EODPO/EOMPO being executed; the command string sample is D:\itas\exec\e\e68 MenuBatch xx DEP /Report=EODPO/Postings=N /ReportTypes=REALISEDPhys,M2mFX,M2mFuts. Contact HDMCS for further assistance in setup and comprehension.
Definition of Physicals / Inventory positions
Purchase and Sale contracts with no Title assignment (see NOTE 1) date are classified as forward/unrealised P&L
Purchase contracts with Title assigned (see NOTE 1) but no Sale Title assignment (see NOTE 2) are classified as Inventory or Inventory in Transit
Purchase contracts, PROMAN stock and Sale contracts with Sale Title assignment (see NOTE 2) are classified as Realised P&L.
NOTE 1: TRADE/Status/Title date (phys01ae_ttd)
NOTE 2: TRADE/Status/ Sale Title date (phys01ae_salettd).
Recognition of Title Transfer is controlled in S01 (ctrl02_titletransfer) by either presence of BL date, presence of Invoice Date or strictly manual entry.
There are a number of General Ledger (NOM) accounts needed for output of accounting records, which are nominated in S01..View...Accrual Nominations (see full list end of this help) . In addition to these, expense codes are nominated in Tab 2 of EXP/Right Click... Maintain Control Expense Codes.
Part 1 of EOMPO is the accrual creation; to simulate invoicing the un-invoiced elements of P & S contracts that have their Title assigned (NOTE 1). This is the 'Realised Physicals’. The P&L accounts are ascertained using the expense code nominations (Nom A/c Column). The other element of part 1 is the 'Reverse Invoices on Unrealised Physicals'. With the completion of Part 1 all contracts with Title transferred will have their total value in the PLR (directly or via WIP control account being nominated in PLR). The PLR would subsequently, after PP posting of accounting records, include inventory bookkeeping which needs to be removed to the Balance sheet (BAL).
Part 2 is the 'Inventory Balance Adjustment' and 'Inventory In Transit' processes.
'Inventory' includes month end levels of PROMAN stock and purchase contracts with a delivery date but with NO sales delivery date (i.e. not released) and there is no Title assignment to a Sale contract (i.e. not sold and no transfer of risk has been executed).
'Inventory In Transit' includes:
i) Purchase contracts with Title transferred but with NO delivery date i.e. transfer of risk from the seller has occurred but the goods have not been received
ii) Purchase contracts that are allocated and there is a Sale delivery date but no Sale Title transfer i.e. goods have been released from Stock but transfer of risk to the customer has not yet occurred
iii) PROMAN stock which has been released from Stock but transfer of risk to the customer has not yet occurred
iv) PROMAN stock which is in transit between terminals i.e. internal transfers
With the completion of part 2, the balance sheet inventory value reflects the TRADE & PROMAN Inventory Value and the PLR value shows the TRADE & PROMAN realised value.
Part 3 is to post the mark-to-market values for Unrealised Physicals (Trade), Unrealised Inventory (PROMAN), Open Futures & Options and Open FX into the P&L.
Options
There are
Technical notes.
Inventory (Fact06)
)
| Purchase Title transferred | Purchase Delivery Date | Sale Delivery Date | Sale Title Transferred | Status |
| N/A | N/A | No | No | Inventory |
| N/A | N/A | Yes | No | Inventory in Transit |
| N/A | N/A | N/A | Yes | Realised |
Physicals (Phys01)
)
| Title transferred | Delivery Date | Sale Delivery Date | Sale Title transferred | Allocated | P/S | Status |
| No | No | No | No | N/A | N/A | Open |
| Yes | No | No | No | N/A | P | Inventory in Transit |
| N/A | Yes | No | No | N/A | P | Inventory |
| N/A | N/A | Yes | No | Yes | P | Inventory in Transit |
| N/A | N/A | Yes | No | N/A | S | Open |
| N/A | N/A | N/A | Yes | Yes | N/A | Realised |
Purchase Title Date {phys01_ttd}
Purchase Delivery Date {phys01_deliverydate}
Sale Delivery Date {phys01_saledd/fact06_saledd}
Sale Title Date {phys01_salettd/fact06_salebld}
Allocated {phys01_allocation}
P/S {phys01_contype}
The objective is to:
a) Move from P&L to B/S the inventory change in the month
b) Move to P&L any uninvoiced items on realised contracts
c) Move from P&L any invoiced items on unrealised contracts
d) Create P&L fair value adjustments in P&L for unrealised Physicals, Inventory, Futures & Options and FX.
The adjustments are temporary and are just for the purpose of month end so are executed as reversing journals or temporary adjustments (TAs)
General Rules
On TAs the closing leg (e.g. 31Jan13) will have the same ROE and $ equivalent as the opening leg (e.g. 01Feb13) i.e. No FX effect
After viewing the report the suggested postings are presented on a grid and can be edited,
On save the postings will be created. The document references are included in the report and it is saved to OPRINT for a permanent record.
All Accounting transactions will have the department; therefore all reporting/aggregating etc. is by department.
The Accounts applied are either provided from the expense code nomination or nominated in S01 as below.
Processes/Report
Inventory Balance Adjustment (A)
Posts the Inventory value from the Stock movements a/c P&L and Stock a/c BS
B/S Inventory is differentiated between stock held at owned terminals and that held at 3rd party owned terminals as nominated in S01/Accrual Nominations/Inventory Adj
Inventory In Transit (B)
Posts the value (not M2M) of inventory In transit from Stock movements a/c P&L to Stock in Transit – Inventory in Transit as defined in the table above.
Realised Physicals (C)
Contracts are included if they have Title date <= month being accrued
Sales in transit (delivery date but no Title date) are also accrued.
Accruals are not applied to tonnages which are closed, wash outs, cancelled, weight losses or write offs.
The process will accrue full contract value minus invoiced amount.
When a contract is invoiced and no final is expected the purchase/sale will not be accrued
When a cost/commission is 100% actualised it will not be accrued.
When the cost is flagged as ‘No Act’ (Not to be actualised/invoiced) – it will not be accrued
When the cost type is setup/nominated(PHYSCODES) as ‘no accrual’ – it will not be accrued
When the cost type is setup/nominated(PHYSCODES) as ‘until cash’ and the Goods invoice is cash matched – it will not be accrued.
The P&L account is the EXP nominated account for the cost type/Purchases/Sales/Commission. The BS accounts are S01 nominations for assets and liabilities. Each purchase/sale/cost/commission will generate 2 postings; 1 P&L and 1 BS (i.e. no aggregation) in its own currency with FRS23 currency equivalents based on the contracts Title transfer date.
Inter-company client accounts can have their own nominations set up, these will be used in place of the S01 nominations. The are 4 CLI nominated accounts: Realised Payables and Realised Receivables for both Balance Sheet and P&L.Realised costs on inter-company trades will also post to these accounts if they are flagged to do so in CLI (chr75_usecostsonaccruals).
Internals post to 4 S01 nominated accounts: Balance Sheet Profits, Balance Sheet Losses, P&L Profits and P&L Losses.
Reverse Invoices on Unrealised Physicals (D)
Any postings in nominal P&L whose linked contract number does not have a Title transfer date are removed from the P&L to the S01 nominated accrued expenses/liabilities accounts,
Unrealised Physicals & Inventory (Fair value adjustments)
Contracts which are not realised (and not closed) are accrued as M2M Gains/Losses.
The procedure is the same but the posting accounts are different for the 2 types.
M2M Unrealised Physical Forwards Gains/Losses (Fair value adjustments) (E)
Each contracts M2M (difference between market price and contract price) is calculated and posted individually.
when a Gain:
credits MTM Gains - cash contracts and
debits Derivative assets – cash contracts
When a Loss:
debits MTM Loss - cash contracts and
credits Derivative liabilities – cash contracts
Intercompany trades (whose counterparty is flagged as a Group account (chr20_group=Y)) will post their M2M to their own B/S and P&L accounts as nominated in S01/Accrual Nominations/M2M Physicals. If a client account has its own nominations set up, these will be used in place of the S01 nominations. The are 4 CLI nominated accounts for off-balance sheet notionals: Priced Credits, Priced Debits, Unpriced Credits and Unpriced Debits.
The ITAS entity has a feature to nominate (ctrl02_eomponopol) whether Sugar polaristion is to be excluded in M2M calculations; the standard is to include any polarisation calculation.
The ITAS entity has a feature to nominate (ctrl02_eompoeomroe) whether to apply EOM FX Rates instead of the standard, which is to use the FX rates at TT date.
M2M Unrealised Inventory (Fair value adjustments) (F)
The total inventory position (PROMAN Stock) is valued to market.
The user will be able to select aggregation level. Options will be are Unique ID, Stock Number or Dept/Terminal/Cmy/Crop Year.
Per selected aggregation:
If a gain (i.e. excess of market value over inventory at cost) it:
credits MTM gain – inventories
debits Trading inventory MTM and
if a loss (i.e. excess of inventory at cost over market value) it:
debits MTM loss – inventories
credits Trading inventory MTM
The transaction generated will be at the aggregation level.
B/S M2M Inventory is differentiated between stock held at owned terminals and that held at 3rd party owned terminals as nominated in S01/Accrual Nominations/M2M Inventory
M2M Open Futures and Options (Fair value adjustments) (G)
Will calculate the Variation margin less commission (TOPEN) and aggregate per broker and futures market.
When a Gain:
credits MTM gain – commodity futures
debits derivative assets – Futures and
When a Loss (i.e. excess of inventory at cost over market value) it:
debits MTM loss – commodity futures
credits derivative liabilities – Futures
M2M Open FX (Fair value adjustments) (H)
Will calculate the Variation margin (TOPEN) and aggregate per broker and currency pair.
When a Gain:
credits MTM gain – Currency futures forward
debits derivative assets – Forex and
When a Loss (i.e. excess of inventory at cost over market value) it:
debits MTM loss – Currency futures forward
credits derivative liabilities – Forex
EOMPO Account Nominations
To operate EOMPO the Accrual style is set to E – EOMPO in S01/Document Entry tab.
Account and expense code nominations are entered in S01…View…Accrual Nominations.
The form also has run time options of:
Transaction level for EOMPO; Dept, Cmy or Contract.
Transaction level for EODPO; Dept, Cmy or Contract.
Auto match transactions for EOMPO
Auto match transactions for EODPO