Accounting

Accounting entries are the backbone of Aura. Any financial activity on any client or general ledger account is recorded by means of accounting entries into the appropriate account. These postings are in-built for each module and are automatically triggered as and when the activity takes place or as part of the Close-of-Business (COB) processes. In addition, Bank can also pass manual journal entries using the Station Journal, Day Journal and Cross-currency Journal options.

Note regarding Dates:

• Each installation of Aura (one database) will have its audit log dates that are taken from the server dates. This is constant and cannot be changed. This will be used in the audit logs and hence is not subject to any change by any user

• Each installation can have multiple Entities. It is possible to set a business date for every Entity in the system. The business date is taken into consideration for COB processing.

• The same installation can have multiple Entities each with their own business dates and hence can run COB independently.

• However all audit trail (change logs) in all the Entities will always have the server date.

Main Components in an Accounting Entry:

Any accounting entry / transaction posting has the following main components:

Book Date: This is the business date of the Entity on which the transaction is posted. This is derived by the system and cannot be set by the User.

Value Date: This is the value date for that leg of the transaction and can be different from the Book Date. In general, a user has an option to set the value date of a transaction as per business needs.

Account Number: The Client Account number or the General Ledger account number which will be affected by the transaction.

Transaction Code: The Transaction Code under which this leg of the accounting entry has been passed. This will determine the Debit / Credit indicator as well as the Description that will be displayed / printed for the transaction in any statement.

Debit / Credit Indicator: This indicates if the Account will be debited (DB) or credited (CR) for this leg of the transaction. It is derived based on the Transaction Code used in that leg of the transaction.

Amount: The amount of debit / credit. This can be either positive or negative. In general, in case of reversal transactions, this will be negative.

Currency: The currency in which this leg of the Transaction is posted.

Contract Reference Number: The reference number for the contract that has triggered this set of entries. Examples: Payment Reference Number, Loan Account Number and Current Account Number.

Transaction Reference Number: The unique reference number for a given set of entries.

Account Branch: The Owner Branch of the Account which will be debited / credited for this leg of the transaction.

Transaction Branch: The Branch of the Entity from where the transaction entries were initiated.

Event: The Event code that triggered the entry.

Related Transaction Reference Number: Depending on certain conditions, each accounting entry may trigger a few additional entries. All such entries will have the Transaction Reference number of the Main Accounting entry as the Related Transaction Reference number.

External Reference Number: If any external system needs to put in their reference number which should be preserved while posting, the same is recorded under External Reference Number.

Module: Indicates the Aura Module id.

Group id: This is an identifier for a set of debit and credit transactions, which are balanced

Main entry

Transactions and Events trigger the main accounting entry. The entries are posted to the relevant General Ledger or Client Accounts as appropriate.

Any accounting entry into a Client Account will also result in a Master GL entry. Master GL is a GL that is mapped to a Client Account, through its Product. The GL for the Master entry is set up in the respective Products and cannot be changed. The Master GL thus gives a consolidated picture of all the balances of all the accounts under that Master GL.

Subsidiary entries

Depending on certain conditions, each accounting entry may trigger a few additional entries.

Inter-Branch entries : If the account branches of both the legs of the transaction are different then, Aura will automatically post accounting entries for inter-branch transactions using the GL maintained for the same at the Branch level.

Position entries : If the main entry is a multi-currency transaction, then Aura will generate the position entries for the foreign currency legs using the GL defined as the Position GL for those currencies.

Transaction-wise profit and loss: In case of multi-currency transaction, Aura will derive and pass the Profit or Loss entries in the debit leg currency using the GLs defined for the Profit (Loss) on currency exchange (cash / non-cash)

Clear to base currency entries: The above calculated Profit or Loss entry, will get converted into the Base Currency entry as per Entity level maintenance, using the same GL in the main entry. The original entry is reversed by adding a contra entry to the group. And a new entry with base currency and Base Currency equivalent amount is added as transaction amount.

Trace entry : A Trace entry is specific to Cards Module. If an account is created as a Transaction Account, any entries affecting the Transaction Account just leaves a Trace Entry in the Transaction Account, and the actual accounting entry is posted to the corresponding Billing Account. Thus the trace entry is in fact not an accounting entry at all – it does not trigger any additional / subsidiary entries and is posted into the Transaction Account only to arrive at the Balance in the account during the Billing Cycle. However, if there are charges associated with the Transaction Code, these charges will be triggered by the trace entry.

Reinstatement entry : A reinstatement entry is specific to Cards Module. This is used to reinstate the limit of a Transaction account at the end of the billing cycle. The reinstatement entry is passed for the book balance in the transaction account as at the end of the billing cycle.

Transaction-based Charges: If a Transaction Code has been associated with charges, any accounting entry under that Transaction Code will automatically trigger the charges as well.

Note:

Book-dated and Value-dated balances for Client accounts and General Ledger accounts are updated as and when accounting entries are posted and / or as part of COB process.

In case the value date is in a closed accounting period, it will be processed as follows:

The value date for the client account leg will be the back-dated value date (of the closed accounting period)

The value date for the offset leg and the Master GL leg will be the current date