Accruals Calulation Method Setup

Principles

The Accruals Calculation Method settings determine the generation and posting of accruals for individual subjects of the payment calendar or for individual calculation inputs to the contract.

Dependencies and assumptions

The dependency is on the settings of the General Bus-Posting Group and the General Posting Group (Gen. Bus. Posting Group and Gen. Prod. Posting Group) and Currency Contracts.

The assumption for RC must be set up for each type of HF in such a way that it corresponds to the required methodology, what should be distinguished and what should not.

Description of the documented area

The Accruals Calculation Method Setup table has two purposes:

• Set whether and under what conditions the individual parts of the payment should be accrued

  • To generate an accrual repayments (principal incl. down payment, interest), insurance and Contract Servicesmust be in Accruals Calculation Method Setup based corresponding line (Gen. Bus. Posting Group + Gen. Prod. Posting Group + Accrual Object + Accounting Area) (General Business Posting Group + General Product Posting Group + Accrual Object + Accounting Area).

  • If a line is not created for these accrual objects, the Contract Accrual Lines calendar will not be generated (for calculation inputs the creation of a row is not important, because calendars are generated based on the flags on the Calculation input - Calc. input accruals local = Yes and Calc. input accruals = Yes)

• Set how payments and calculation inputs should be accrued   

  • Setting up the accrual method is mandatory for all courses for which accruals are required

  • The objects of accruals are

    • Accrual Subjects:

      • Down Payment

      • Principal

      • Interest

      • Insurance Contract

      • Contract Service

    • Accrual Objects of Calculation Inputs:

      • Expense Input Fee

      • Income Input Fee

      • Expense Subsidy

      • Income Subsidy (Income Subsidy)

      • Expense Commission

      • Income Commission (Income Commission)

  • If accruals are set for the given calculation input type in the Gen. Posting Groups and CI Type Relations, the accruals method must be set here.

Open

Here's how you set up fields:

• Gen. Business Posting Group

  • Gen. Bus. Posting Group from the Financing Contract header (Insurance Contracts and Services Contracts must have the same posting group as the Financing Contract)

• General Product Posting Group

  • General Posting Group of Goods by Accrual Objects:

    • From the Header of the Financing Contract

      • For the subjects: Down Payment, Principal, Interest, Expense Flat Fee, Income Input Fee, Expense Subsidy, Income Subsidy, Expense Commission, Income Commission, Simple Insurance, and Simple Fee

    • From the Insurance Contract

      • For Subject: Insurance Contract

    • From Contract Service

      • For Subject: Contract Services

• Accrual Object

  • Down Payment

    • Principal on the line of the repayment calendar that is marked as "Down Payment Line"

  • Principal

    • principal on the "regular" line of the payment calendar ("Down Payment Line" = No and "Selling Price Line" = No)

  • Interest

    • Interest on Installments

  • Insurance Contract

    • Insurance premium from the client's insurance calendar

  • Contract Service

    • Detailed service used in operational leasing with services or in fleet management

  • Expense Input Fee

    • Calculation Input Type = Cost, Variant = Fee

  • Income Input Fee

    • Calculation Input Type = Revenue, Variant = Fee

  • Expense Subsidy

    • Calculation input type = cost, variant = subsidy

  • Income Subsidy (Income Subsidy)

    • Calculation input type = yield, variant = subsidy

  • Expense Commission

    • Calculation input of type = cost, variant = commission

  • Income Commission (Income Commission)

    • Calculation Input Type = Yield, Variant = Commission

• Accounting Area

  • Specifies the accounting system for which the accrual method is valid. For one accrual object, two accrual calendars can be generated according to the accounting system:

    • Local

      • The set method is valid for accruals in the local accounting system

    • IFRS (IFRS)

      • This setting is valid for accruals in IFRS

• Accruals Calculation Method

  • Specifies how accruals will be calculated for the subject and accounting system:

    • Linear

      • The amount is budgeted evenly according to the number of months of the reference period (instalment or contract); e.g. interest on the quarterly instalment will be calculated over 3 months, the down payment will be calculated over 36 months for the duration of the contract)

      • The "Linear" method can be set for all accrual objects

    • By Interest

      • The amount is divided into periods (installments or contracts) in proportion To the course of interest

      • The "By interest" method can only be set for down payment and calculation inputs accruals

• Condition of Accruals

  • The setting is relevant only for contract accrual objects and specifies what the Financing Contract or Insurance Contract must be for the object to start accruals

  • This setting is not taken into account for accruals of calculation inputs (subsidies, fees, commissions).

  • Options are available:

    • Always

      • If set for items based on a payment, these items will always be accrued, regardless of the periodicity of the payments or the irregularity of the contract

      • For courses based on calculation inputs, the default value is set to "Always", as this setting is not taken into account   

    • Modality>1 (Modality > 1)

      • Items based on the instalment will be accrued only on contracts with a payment periodicity of more than 1 month (e.g. quarterly contracts)

    • Not Regular

      • Items based on the payment will be accrued only if the contract is marked Irregular Contract for Accruals = Yes.

    • Modality>>1 or Not Regular

      • Items based on the payment will be accrued on a contract with a payment periodicity of more than 1 month or if the contract is marked as a Non-Regular Contract for accruals

• Difference Posting Method

  • When recalculating accruals, a difference may arise in the booked part of the payments (e.g. a change in the financing period or an exchange rate difference in a contract in a foreign currency, if the accruals were converted to local currency and posted before the payment was posted). This setting determines which row the difference is added to:

    • First Non-Posted

      • The difference is added to the first unposted and at the same time unlocked line of the Contract Accrual Calendar. For the exchange rate difference, the calculated difference is added to the first unposted line of the calendar.

    • Last

      • The difference is added to the last line of the contract accrual calendar

  • The setting will also apply to the difference caused by the extraordinary payment

• Source Data

  • The setting is relevant only for calculation inputs and determines which data from the Calculation input should be used as the source for calculating accruals. The options are:

    • Base Amount

      • It is always filled in on the calculation input

    • Financed Amount

      • Usually the same as the Base Amount, only the purchase price of the loan agreement can be reduced by the amount paid by the customer

    • Calculation Amount

      • The amount is filled in only if the calculation input enters the calculation

  • The setting of the source data for accruals should match the settings of the source data of the calculation input for calculation input posting (in OneCore Posting Settings) if the calculation input is posted as an accrual "recipe".

• Exch. Rate Difference Calculation Method (Exch. Rate Difference Calc. Method)

  • This functionality is not part of the standard solution, it can be added as a customer modification. The following options are prepared for this modification:

    • Standard

    • Balance Adjustment

  • The expected functionality for calculating exchange rate differences in the accrual period of the contract is described in the document "Finance"

Overview of Enabled Setup:

The settings are copied to the calendar lines of the Contract Accrual Lines. If the setting is changed and at least one line is already posted in the calendar, the change of the setting does not affect the calendar, the accruals continue with the original method, even in the case of contract recalculation.