IFRS Deposits

Purpose

The Deposit System will allow the spreading of brokerage over the life of each account.  The realisation method used is Straight Line.

The Unexpired Brokerage Report will detail how brokerage is spread.

This report will show:

1. Deposit open date        
2. Deposit 
3. The duration of the deposit in days – used for the straight line calculation
   
4. The original amount of brokerage on each account
   
5. The unexpired brokerage at the start of the month 
6. Brokerage on accounts added during the month
   
7. Brokerage clawed back on accounts early matured
   
8. The unexpired brokerage at the end of the month – this will be reconciled to a General Ledger Code balance 
9. The amount of brokerage expensed in the month
   
10. The month end reset routine will post a journal entry between the General Ledger Balance Sheet Unexpired Brokerage Expense account and the Profit and Loss Brokerage Expense account
    

Access

1. Accounts  | Edit/View Account Types
   

Dialog Details

There is a button on each Deposit System Account Type that needs to be set up for the brokerage commission expense spread to take place.

This will be completed as follows:

Details Specific Fields

Field	Explanation
Unexpired Brokerage Expense Balance Sheet	This is a new Balance Sheet GL Code that must be created and selected into this field It will be set up with a General Ledger Type of Current Asset or Balance Sheet Accounts Current – For Reconciliation This GL account must be unique for each deposit system account type. [F2] in this field to display the General Ledger Browse  the new GL Code and  into this field
Brokerage Expense - Profit and Loss	Either a new Profit and Loss GL Code can be created for this Direct Expense item and selected into this field, or the existing GL Code that the brokerage commission currently posts to can be selected into this field [F2] in this field to display the General Ledger Type the new GL Code and  into this field
Brokerage Realised Method	There is only one option available being Straight line
Brokerage Paid Transaction Type	[F2] and  the Transaction Type that will be used to post brokerage from the Deposit System Calculate and Payout Dealer Brokerage menu option This Transaction Type must be unique for each Deposit System Account Type This Transaction Type should post to the Profit and Loss Direct Expense code
Brokerage Clawback Transaction Type	[F2] and  the Transaction Type that will be used to post brokerage clawback on Early Maturity of a Deposit Account This Transaction Type must be unique for each Deposit System Account Type This Transaction Type should post to the Profit and Loss Direct Expense code

General Ledger Implications

Month End Processing

During each month end the system will process a General Ledger Journal entry that will force the balance sheet unexpired brokerage expense code balance to be the same as the unexpired brokerage month end total from the Unexpired Brokerage Report.  The other side of the entry will post to the profit and loss GL Code for brokerage expense. 

If you have multiple account types set up for deposit brokerage IFRS spread, then a separate General Ledger Journal will be posted for each account type.

Important Note

The Dealer System month end MUST be run before the Deposit System month end.

This is so that the brokerage clawback transactions are posted to the Unexpired Brokerage Expense GL Code.  When the journal recognising brokerage expensed is posted from the deposit system month end it will then account for the clawback transactions correctly.

If the month end resets are run in the wrong order it will be necessary to process a manual General Ledger Journal transferring the clawback balance out of the Unexpired Brokerage Expense code to the Brokerage Expense code.

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