Accounting & Reporting

Jethro Ltd Smart Solutions ™

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FINANCIAL ACCOUNTING & REPORTING IN T24

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COURSE PROGRAMS • • • • • •

OVERVIEW T24 FINANCIAL REPORTING MAIN TRANSACTION FILES PARAMETER FILES ON T24 GL CREATION AND MAINTENANCE OF A GL REPORT ON T24 ASSETS AND LIABILITIES - REVALUTION GL MISMATCH – DIAGNOSTICS AND RESOLUTION

PLEASE NOTE: Emphasis on practical sessions, Learn by doing approach

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OVERVIEW T24 FINANCIAL REPORTING

FINANCIAL REPORTING FROM IT

Timeliness All financial reports generated from the system, must be available when needed Accuracy All financial reports must be accurate; e.g. the Gen ledger must be balanced and all schedules must be readily available and reconcilable with the GL position. Meaningfulness All financial reports must be meaningful and easily understood; there should be no ambiguity in the output 4

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The reporting consolidation Module maintains the CONSOLIDATION REPORTING BASE (CRB)from which financial reports such as the General Ledger, Balance sheet, Profit & Loss, Central Bank reports are produced. The module consist of two main components the UPDATE and the Report PRODUCTION components. There TWO main sources of transaction Input USER/CUSTOMER INITIATED – These are mainly through the following application in T24 - DATA CAPTURE - FUNDS TRANSFER - TELLER (ATM) SYSTEM INITIATED - ACCRUAL INTEREST & CHARGES - COMMISSIONS - REVALUATION 5

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T24 ACCOUNTING FILES/ENTRIES • STMT.ENTRY This file contains Debit/Credit entries that are posted into all All accounts (both customer and internal accounts) on the system. A daily transaction file ACCT.ENT.TODAY is maintained as a transit file and cleared during COB on a daily basis. • CATEG.ENTRY All Profit & Loss entries are posted in this file; the entries are then aggregated on the file CONSOLIDATE.PRFT.LOSS. There is no actual General Ledger account for these entries. A daily transaction file CATEG.ENT.TODAY is maintained as a transit file and cleared during COB on a daily basis. • RE.CONSOL.SPEC.ENTRY All entries on Contracts and other Special entries are posted in this file. A daily transaction file CONSOL.ENT.TODAY is maintained as a transit file and cleared during COB on a daily basis.

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 CONSOLIDATION PARAMETER

• T24 does not require General Ledger accounts to

facilitate financial reporting, so how does it maintain a General Ledger system? The problem associated with systems that use General Ledger accounts will better explain this; • An account must be opened for each currency you deal. •You may have different types of loans for example; Personal Loan, Interbank loan, Corporate Loan. If you need those to be further broken down by Residence, Nationality, Industry, you may require several accounts and the administration would require a lot of effort. •In T24 the transaction Data (STMT.ENTRY, CATEG.ENTRY & RE.CONSOL.SPEC.ENTRY) is used to feed the General Ledger, this is accomplished by telling T24 how the data should be analyzed. One of the first files setup on implementation is the CONSOLIDATE.COND, which has two records viz; ASSET&LIAB and PROFIT&LOSS.

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CONSOLIDATE .COND One of the first files to setup on implementation is the CONSOLIDATE.COND, which has two records viz; ASSET&LIAB and PROFIT&LOSS. In this file you specify where T24 searches for consolidation variables required, such as Industry, Account officer, Residence, Nationality, Sector etc Once this file and the application parameters are in place, T24 is ready to create the General Ledger. • The set up of CONSOLIDATE.COND will be treated in practical session • The creation of a GL report will be treated in a practical session

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CRB UPDATE

CONSOLIDATE.COND

- ASSET& LIAB - PROFIT&LOSS

REPORT PRODUCTION RE.STAT.REP.LINE RE.STAT.REPORT.HEAD RE.STAT.RANGE RE.STAT.COLUMN,RANGE

REPORTS

CONSOLIDATE.ASST.LIAB CONSOLIDATE.PRFT.LOSS

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CHART OF ACCOUNTS TOOLS

RE.STAT.COLUMN.TYPE RE.STAT.REPORT.HEAD RE.STAT.REP.LINE RE.STAT.RANGE

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CHART OF ACCOUNTS TOOLS RE.STAT.COLUMN.TYPE This is table use to develop details for each column that can be printed. It is use indicate whether a movement amount or balance amount is to be printed.

RE.STAT.REPORT.HEAD This is use to create heading details indicating the columns to be printed, the amount size, whether reports are by currency or all currencies

RE.STAT.REP.LINE This is the main engine for building each line on the chart of account. The tables uses parameters like category, DAO, Sector etc. This is where most formatting and development take place.

RE.STAT.RANGE The table is required when there are numbers of product need to be mapped or report on a single line, the table helps in grouping various parameter together to report on a single line.

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ASSET AND LIABILITY PARAMETERS

 FOUR FIXED PARAMETERS • APPLICATION ID – e.g AC, LD, MM, MD, • CURRENCY MKT • POSITION TYPE • CURRENCY  TWELVE GENERAL PARAMETERS e.g. Category, Industry, Sector, DAO, Residence, Time,  Maximum Length of 65

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PROFIT AND LOSS PARAMETER  ONE FIXED PARAMETERS – APPLICATION ID – PL  TWELVE GENERAL PARAMETERS e.g. Category, Industry, Sector, DAO, Residence, Time

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FILE STRUCTURE CONSOLIDATE.ASST.LIAB R8 MODEL BANK

Consolidate Asset Liabilities SEE

CONSOL.KEY........ AC.1.TR.CHF.1001.1001.GB.....1000 -----------------------------------------------------------------------------1 APPLIC.ID......... AC 2 CURRENCY.MARKET... 1 Currency Market 3 POSITION.TYPE..... TR TRADING POSITION 4 CURRENCY.......... CHF Swiss Franc 5 CATEGORY.......... 1-001 Current Account 6 SECTOR............ 1001 Individual 7 RESIDENCE......... GB Great Britain 12 INDUSTRY.......... 1000 Private Person (Name) 17 DATE.LAST.UPDATE.. 07 JAN 2008 18. 1 TYPE........... CREDIT 19. 1 BALANCE........ 10,000,000.00 22. 1 LOCAL.BALANCE.. 8,431,703.20

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FILE STRUCTURE CONSOLIDATE.PRFT.LOSS R8 MODEL BANK

Consolidate Profit Loss SEE

CONSOL.KEY........ PL.50000.6001.2001.60.US... -----------------------------------------------------------------------------1 APPLIC.ID......... PL 2 PLCATEGORY........ 50-000 ***Interest Expense 3 PLPRODUCT......... 6001 4 PLSECTOR.......... 2001 Corporate 5 PLDEPARTMENT...... 60 Risk Manager 6 PLRESIDENCE....... US United States of America 14 DATE.LAST.UPDATE.. 07 JAN 2008 15. 1 CURRENCY....... USD US Dollar 16. 1 BALANCE........ -919.26 17. 1 DEBIT.MOVEMENT. -306.41

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REVALUATION ASSET AND LIABILITIES  At the end of each run and prior to the production of reports all non-contingent foreign currency records are revalued. This excludes all FORWARD Loans and Deposits. The process involved revaluing each foreign currency by type. The total new local equivalent from all currency records with the same market and position type is checked against the LOCAL.EQUIVALENT from the Assets and liabilities records on the Position file . If there is a difference then the last record for the currency on the Assets and Liability Consolidate file is adjusted by that amount.  Special Movement entries are raised for the amount of each revaluation based upon settings in REVALUATION.PARAMETER

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CHART OF ACCOUNTS TOOLS

A Practical and Interactive Session on Chart of Account Development

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GL MISMATCH – DIAGNOSTICS AND RESOLUTION  ASSETS + LIABILITIES = 0  Double entry Accounting system  What is GL difference? Where the summation of Asset and Liabilities does not equal Zero

 TOOLS TO IDENTIFY EB.SYSTEM.SUMMARY TRANS.JOURNAL EB.JOURNAL.SUMMARY

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DIFFERENCES

CONTRACT BALANCE & CRF BALANCE When a Contract is inputted and authorized • Contract File • Contract Balance file • Accounting Entries will be generated After an EOD • Balance Look-up file • Update the CONSOLIDATION KEYS • Consol Look-up file -------------------------------------------------------------------------------------Balance in the Look-up file is the Contract Balance Balance in the Consolidation Keys is the CRF Balance

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Date 1st Oct 2007

Trans New contract

Stmt

Categ

10,000

Spec -10,000

Key/asst type AC.1.TR.USD…DEBIT LD.1.TR.USD……LIVEDB

2nd Oct 2007

ACCRUAL

10

-10

PL…… LD.1.TR.USD.….51000

3rd Oct 2007

ACCRUAL

10

-10

PL…… LD.1.TR.USD.….51000

4th Oct 2007

ACCRUAL

10

-10

PL…… LD.1.TR.USD.….51000

5th Oct 2007

ACCRUAL

10

-10

PL…… LD.1.TR.USD.….51000

6th Oct 2007

ACCRUAL

10

-10

PL…… LD.1.TR.USD.….51000

7th Oct 2007

Maturity

10,000

AC.1.TR.USD…DEBIT

-10,000

LD.1.TR.USD……LIVEDB 7th Oct 2007

Cap

-50

50

AC.1.TR.USD…DEBIT LD.1.TR.USD.….51000 20

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BALANCE FILES FOR VARIOUS APPLICATIONS Details of the Balance file and lookup files for various applications: Application

Balance file

Lookup File - Balances

Account Money Market (MM) Loans and Deposits (LD) Letter of Credit (LC) Drawings (DR) Mortgage (MG) Payment Dues (PD) Fiduciary (FID) Swaps (SW) Forex (FX) FRA Securities (SC) Miscellaneous Deals (MD)

Account LMM.ACCOUNT.BALANCES ACCBAL LETTER.OF.CREDIT DRAWINGS MG.BALANCES PD.BALANCES FD.BALANCES SWAP.BALANCES FOREX FRA SC.TRADING.POSITION MD.BALANCES

Account RE.LMM.BALANCES RE.LD.ACC.BAL RE.CONTRACT.DETAIL DRAWINGS RE.MG.BALANCES RE.CONTRACT.BALANCES RE.FD.BALANCES RE.CONTRACT.BALANCES RE.FOREX.OPTION FRA SC.TRADING.POSITION RE.MD.BALANCES

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Details of the Balance file and lookup files for various applications

Application Account Money Market (MM) Loans and Deposits (LD) Letter of Credit (LC) Drawings (DR) Mortgage (MG) Payment Dues (PD) Fiduciary (FID) Swaps (SW) Forex (FX) FRA Securities (SC) Miscellaneous Deals (MD) www.jethroltd.com www.jethroltd.com

Lookup File - Consol Keys RE.CONSOL.ACCOUNT RE.CONSOL.MM RE.CONSOL.LOAN RE.CONSOL.LC RE.CONSOL.LC RE.CONSOL.MG RE.CONSOL.PD RE.CONSOL.FID RE.CONSOL.SWAP RE.CONSOL.FOREX RE.CONSOL.FRA RE.CONSOL.SEC RE.CONSOL.MD

REASONS FOR A MISMATCH

1.Wrong update of CONTRACT BALANCES 2. Incorrect Accounting Entries (RE.CONSOL.SPEC.ENTRY) 3.Cal update problem

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EFFECTS OF MISMATCH  Wrong update of Contract Balances  Wrong Interest & other calculations  Maturity of Contract  Incorrect Accounting Entries GL differences Revaluation Error (- if foreign currency 24

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HOW IT HAPPENS? GL Difference

Mismatch

Position

Single side Entries

Yes

Yes

Yes

CAL not updated

Yes

Yes

Yes

CPL not Updated

Yes

No

No

AC/Contract Not Updated

No

Yes

No

Problem in Position Update

Yes

No

Yes

RE.CONSOL.CONTRACT

No

Yes

No

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Analysis of Mismatch Tools used in Globus  General Ledger (GLSTD, MBGL…) RE.STAT.MISMATCH RE.STAT.BAL.REC

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Correction of Mismatch On finding the reason & fixing it: Correct the Contract Balance Correct the CAL through Accounting Entry (SPEC & STMT/CATEG Entries)

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Correction of Accounting Entries Update CONSOLIDATION KEY  Input CONSOL.ENT.TODAY entry  Raise RE.CONSOL.SPEC.ENTRY  Update the Consolidation Key

Update STMT / CATEG Entry  Input entries thru DC

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FILE STRUCTURE STMT.ENTRY • •

R8 MODEL BANK STMT.ENTRY SEE STMT.ENTRY.ID..... 146910000361803.020001

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

------------------------------------------------------------------------1 ACCOUNT.NUMBER.... 37397 David 2 COMPANY.CODE...... GB-001-0001 R8 MODEL BANK 3 AMOUNT.LCY........ 2,000,000.00 4 TRANSACTION.CODE.. 52 Cash Deposit 6. 1 NARRATIVE...... Cash Deposit at HO 8 CUSTOMER.ID....... 111119 David 9 ACCOUNT.OFFICER... 2002 Corporate Banking 10 PRODUCT.CATEGORY.. 6-001 Savings Account 1 11 VALUE.DATE........ 05 DEC 2007 12 CURRENCY.......... USD US Dollar 16 POSITION.TYPE..... TR TRADING POSITION 19 EXPOSURE.DATE..... 05 DEC 2007 20 CURRENCY.MARKET... 1 Currency Market 22 DEPARTMENT.CODE... 1 Implementation 23 TRANS.R TT07339V2MWG 24 SYSTEM.ID......... TT TELLER 25 BOOKING.DATE...... 05 DEC 2007 26. 1 STMT.NO........ 146910000361803.02 26. 2 STMT.NO........ 1-2 29 CURR.NO........... 1 30. 1 INPUTTER....... 3_SEAT.USER___OFS_SEAT 31. 1 DATE.TIME...... 21 MAR 08 17:10 32 AUTHORISER........ 3_SEAT.AUTH 36 CRF.TYPE.......... CREDIT 39 CONSOL.KEY........ AC.1.TR.USD.6001.1001.US.....1000 43 DEALER.DESK....... 00 63 CHQ.COLL.ID....... 01 100 PROCESSING.DATE... 05 DEC 2007 104 ORIG.CCY.MARKET... 1

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Smart Solutions™

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THANK YOU

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