End of Month/Day Accrual procedures
Overview:
EOMPOK uses TTD as the control to define contracts as either forward, inventory or realised. The trigger to set/unset TTD will probably be invoice date (ctrl02_titletransfer of blank). Transfer of risk will be set to Title Transfer (ctrl02_xferofrisk of T)
Forwards are contracts with no TTD
Inventory is Purchase Contracts with a TTD and no sales TTD and with a warehouse date and no release date.
Inventory in Transit is Purchase Contracts with a TTD and no sales TTD and with either a blank warehouse date or with a warehouse date and release date.
TRADEs with any of the following attributes are excluded from the month end process:
Closed (phys01_status not O)
Written off (phys01_afi flagged as write off)
Zero contract qty
3rd Party
Brokerage
EOMPOK - The postings are TA type documents, which post to last day of the month being closed and reverse on the 1st day of the following month.
EODPOK - The postings are JL type documents, which post to the day being processed with the reversal posted to the next day. Can only be executed when both days are in the same accounting period.
These procedures can be executed for reporting ONLY thereby enabling preview before final accrual posting.
These procedures can also be applied to the current/operational data BUT no accounting documents will be produced.
Reports - Detail
1. Accrue Executed Physicals
Includes: Purchase and sale contracts with a TTD.
Process: Locates un-invoiced values (goods or costs) on the contract and simulates invoicing them
‘CLI’ Posting: Nominated accounts from S01/Accrual Nominations/Executed (Accruals) tab (ctrl02_acrealisedpay, ctrl02_acrealisedrec)
Intercompany (contract’s c/party flagged as group) posts to the client a/c directly
Expense Code is ctrl06_accrualcosts.
Other Side Posting: Goods posts to the contract’s WIP A/c or WIP catch all (ctrl02_acexwip)
Costs on purchase flagged as in stock (cmy25_instk) post to WIP or WIP Catch all.
Other Costs post to P&L. Expense code linked to cost (cmy101_nominal, cmy101_othpl)
Extra process for Sales
If a sale is ‘invoiced’ in the process, as well as accruing to the sale’s WIP a/c the P&L component is moved from the Wip to the P&L (ctrl30_pl and ctrl30_costofsales) with expense code (ctrl06_saleinvpnl).
The P&L transfer is proportional to the sale invoice %age, for example if the sale was already 90% invoiced the P&L transfer would be 32,000 @10% =$3,200CR and 29,000@10%=$2,900DR
If the sale is on the transit wip (ctrl50_transitwip), costs of sales is taken from from Exped/Completion details, otherwise it’s from the allocated purchase contract value+costs.
Costs on the sale are not moved to p&L as they post directly to the P&L instead of the Wip.
All postings are in the functional currency, converted to the functional currency using the TT date Roe.
2. Reverse Invoices on non-executed Physicals
Includes: Purchase and sale contracts with no TTD.
Process: Locates any invoices (goods or costs) on the contract and reverses them
‘CLI’ Posting: Nominated accounts from S01/Accrual Nominations/Executed (Accruals) tab (ctrl02_acrealisedpay, ctrl02_acrealisedrec)
Other Side Posting: Goods posts to the contract’s WIP A/c or WIP catch all (ctrl02_acexwip)
Costs on purchase flagged as in stock (cmy25_instk) post to WIP or WIP Catch all.
Other Costs post to P&L. Expense code linked to cost (cmy101_nominal, cmy101_othpl)
3. Inventory Balance Adjustment (Stock)
Includes non Prosched Purchase contracts in stock i.e. with a TTD and no Sale TTD and with a warehouse date and no release date and a blank toll flag.
The value transferred is the contract value plus costs flagged as in stock value and in P&L.
Invoiced components will be converted to USD at invoice ROE.
Un-invoiced components will be converted to USD at forward ROE (FWDFXR) based on its ROE Target Date (phys01_roetargetdate).
The process transfers the value out of the contract's WIP to the nominated Inventory account (ctrl30_invacc)
4. Inventory in Transit Adjustment
Includes: Purchase contracts with a TTD and no Sale TTD and either no warehouse date or a warehouse and release date.
Process: Moves the adjusted contract value between the 2 nominated Accounts
Debit: S01/Accrual Nominations/Inventory in Transit tab (ctrl02_transitstk)
Credit: WIP Catch all account (ctrl02_acexwip)
5. M2M Physicals.
Separate sections for Open, Inventory and Inventory in Transit as below.
a) M2M Open
Includes: purchase and sale contracts with no TTD.
Process: Standard M2M to functional currency and local currency if set up. Conversion to functional currency will use locked in ROE (phys01_roe) if set and ctrl02_eomporoeccy is selected. Otherwise conversion done using EOM system ROEs.
B/S Posting: Nominated B/S accounts in S01/Accrual Nominations/M2M Physicals tab (ctrl02_namtmgainsphys, ctrl02_namtmlossesphys, ctrl02_mtmintbs, ctrl02_mtmintbslosses, ctrl02_mtmintercogainsbs and ctrl02_mtmintercolossesbs)
P&L Posting: ‘Unrealised Physicals’ account for the department as maintained in ‘DEPT’
Expense Code: ctrl06_m2mphys. If blank ctrl06_accrualcosts
b) M2M Inventory
Includes: Purchase Contracts with a TTD and no sales TTD and with a warehouse date and no release date.
Process: Standard M2M as per M2M Open.
B/S Posting: Nominated B/S accounts as per S01/Accrual Nominations/M2M Inventory tab (ctrl02_namtminventory or ctrl02_mtm3ptyinv). Stock at terminals whose owner is MyCli are classified as owned terminals otherwise its stock at 3rd party owned terminals
P&L Posting: Nominated P&L accounts as per S01/Accrual Nominations/M2M Inventory tab (ctrl02_m2mlosessinvpl or ctrl02_m2mgainsinvpl)
c) M2M Inventory in Transit
Includes: Purchase Contracts with a TTD and no sales TTD and either without a warehouse date or with a warehouse date and release date.
Process: Standard M2M as per M2M Open.
B/S Posting: Nominated B/S accounts as per S01/Accrual Nominations/M2M Inventory tab (ctrl02_transitstkm2m)
P&L Posting: Nominated P&L accounts as per S01/Accrual Nominations/M2M Inventory tab (ctrl02_m2mlosessinvpl or ctrl02_m2mgainsinvpl)
6. M2M Futures & Options
Separate sections for Open F&O and reverse M2M of unrealised settled as below
a) M2M Open
Includes: Open F&O
Process: Standard M2M to functional currency and local currency if set up. Conversion to functional currency at EOM system ROEs.
B/S Posting: Nominated B/S accounts as per S01/Accrual Nominations/M2M F&O tab (ctrl02_mtmgainsfut, ctrl02_mtmlossesfut, ctrl02_mtmgainsopt, ctrl02_mtmlossesopt)
P&L Posting: Nominated P&L accounts as per S01/Accrual Nominations/M2M F&O tab (ctrl02_mtmgainsfutpl, ctrl02_mtmlossesfutpl, ctrl02_mtmgainsoptpl, ctrl02_mtmlossesoptpl)
b) Reverse M2M of Unrealised Settled F&O
Includes: Settled futures linked to an unrealised contract (blank Sales TTD)
Process: Standard M2M as for open futures but posting with the opposite sign.
B/S Posting: As open F&O with sign reversed
P&L Posting: As open F&O with sign reversed
7. M2M FX
Separate sections for forward FX deals and reverse M2M of unrealised matured deals
a) M2M of Forward FX deals
Includes: Forward FX
Process: Standard M2M to functional currency and local currency if set up. Conversion to functional currency at EOM system ROEs.
B/S Posting: Nominated B/S accounts as per S01/Accrual Nominations/M2M FX tab (ctrl02_mtmgainsfx, ctrl02_mtmlossesfx)
P&L Posting: Nominated P&L accounts as per S01/Accrual Nominations/M2M FX tab (ctrl02_mtmgainsfxpl, ctrl02_mtmlossesfxpl)
b) Reverse M2M of Mature FX
Includes: Mature FX linked to an unrealised contract (blank Sales TTD)
Process: Standard M2M as for forward FX but pro prata’d down to the amount linked to the unrealised Physical, and posting with the opposite sign.
B/S Posting: As forward FX with sign reversed
P&L Posting: As forward FX with sign reversed
For example a deal is £100,[email protected]=$130,000 of which £20,000 is assigned to unrealised physicals
Mkt=1.32, M2M=$132,000, P&L=$2,000
so P&L posted back is:
2,000 X 20,000 / 100,000 = $400
8. Realised and Un-Realised P&L Transfer
This report separates Realised and Un-Realised in the accounts
Physicals; Includes contracts which are sales invoiced but whose WIP A/c is not closed. The sales invoice value and its COS are moved from the balance sheet transfer account to the nominated P&L accounts. The sales invoice value is single ccy value i.e. the USD equivalent posted (phys06_singleamt)
On a back to back, the COS is the single ccy value of the goods and in stock costs on the purchase contract allocated to the sale.
The uninvoiced parts of the purchase contract and in stock costs are converted to target currency at forward rates if running forward Roes Explicit (ctrl02_applyextraproe=F), otherwise they are converted at month end ROEs.
On a PROSCHED allocation the COS is the contract value (phys01_conval) of the stock contracts (8/M/T) allocated to the sale
The COS is proportioned to the sales invoice %age (phys01_invpc). The COS is already in functional currency so no conversion is necessary.
F&O; is the trade value and commission value of the proportion of futures linked to a physical converted to the functional currency either at at month end rate if not posted or at posting date rates for those items which are posted
FX; is the M2M of the proportion of FX linked to an unrealised physical (no sale TT) converted to the functional currency at month end rates
Physicals postings
The sales value and COS posts from the contract’s WIP A/c to the P&L accounts nominated in the Realised tab in S01/Accrual Nominations according to whether the physical is an internal, an intercompany trade or a normal trade.
F&O Postings
The Commission value on open F&O posts from the dept nominated ‘Mode 3 Commissions’ (cmy102_mode3settlec) to the nominated Open futures clearance P&l (ctrl02_unropenfutspl)
The Commission value on settled F&O posts from the dept nominated ‘Mode 3 Commissions’ (cmy102_mode3settlec) to the nominated Settled futures clearance P&l (ctrl02_unrsetfutspl)
The settled value (fut02_conval) on settled F&O posts from the dept nominated ‘Mode 3 F/Setts’ (cmy102_mode3settle) to the nominated Settled futures clearance P&l (ctrl02_unrsetfutspl)
FX Postings
Forward FX linked to contract with sales TT; Show in report in own column (Fwd Fx M2M STTD). Post 4 legs per contract in document.
Profitable: ctrl02_mtmgainsfxpl, ctrl02_mtmgainsfxplr, ctrl02_mtmgainsfxr, ctrl02_mtmgainsfx
Loss Making: ctrl02_mtmlossesfxpl, ctrl02_mtmlossesfxplr, ctrl02_mtmlossesfxr, ctrl02_mtmlossesfx
Mature FX linked to contract without sales TT; Show in report in own column (Mat Fx M2M No STTD)
Post between ctrl02_ffccacc and ctrl02_unrmaturefxpl
9. Settled Pre-Hedge Adjustment.
Includes F&O settled <= the cut off date
The Value is the trade value and commission. The value is posted in the functional converted at the settlement rate taken from the accounting transactions.
The posting is out of the settlement accounts nominated in DEPT (cmy102_mode3settle, cmy102_mode3settleO and cmy102_mode3settleC) into the accounts nominated on the 'Pre Hedge' tab of S01/Accrual Nominations