Accounting Treatments

PURPOSE

To provide a link to detail documentation of CS Lucas standard accounting treatments.

WHY IS THIS IMPORTANT?

Accounting for Treasury instruments can be complex and various alternative approaches are available. This document summarized the various alternatives and provide links showing detail journals and computation.

LIST OF ACCOUNTING TREATMENTS

Instrument	Accounting Treatment	Link
Money Market	Money Market Deposit at Average Rate	Click Here
	Money Market Loan at Average Rate	Click Here
	Money Market Loan Rollover – Partial	Click Here
	Money Market Withholding Tax – Net	Click Here
	Money Market Withholding Tax – Gross	Click Here
	Money Market Loan Rollover – Full	Click Here
	Money Market – Deposit – Negative Interest Rate	Click Here
	Money Market – Loan – Negative Interest Rate	Click Here
	Money Market Loan at Spot Rate	Click Here
	Money Market Loan at Spot Rate – Alt	Click Here
Foreign Exchange	Foreign Exchange Outright Base	Click Here
	Foreign Exchange Outright Cross	Click Here
	Foreign Exchange Outright Cross Split Swap Cost from SRR	Click Here
	Foreign Exchange Swap Cross	Click Here
	Foreign Exchange Swap Base	Click Here
	Foreign Exchange Rollover	Click Here
	Foreign Exchange Outright Base – with TDate Journal	Click Here
	Foreign Exchange Outright Cross – with TDate Journal	Click Here
Non-Deliverable Forward	NDF Journal	Click Here
Interest Rate Swap	IRS Cross Ccy – Front and Back	Click Here
	IRS Cross Ccy – Notional	Click Here
	IRS Same Ccy – Notional	Click Here
	IRS Same Ccy – Notional – Hedging Derivatives	Click Here
Option	Option Long Journal	Click Here
	Option Short Journal	Click Here
Intercompany Funding	Interco Funding	Click Here
Term Loan	Term Loan with Interest Capitalisation	Click Here
	Term Loan Fee Amortisation	Click Here
	Term Loan – Borrow	Click Here
	Term Loan – Lend	Click Here
Investment – Equity	Investment in Equity	Click Here
	Investment in Equity FIFO	Click Here
Interest on MMF	Interest on Money Market Funds	Click Here
Investment – Bond	Investment in Bond – Average at Market Value	Click Here
	Investment in Bond – FIFO at Amortised Cost	Click Here

 

FREQUENTLY ASKED QUESTIONS

FAQ01. Should the ERP system revalue journals posted by CS Lucas?

ERP system must NOT revalue any General Ledger chart of accounts items (except “Cash at bank”) used for treasury transactions that CS Lucas system is posting to. If these journals are revalued or changed and booked (either manually or via integration), we will not be able to provide support to reconcile General Ledger balances (base and currency amount) to the CS Lucas system.

The reason revaluation is not necessary are as follows:

a) CS Lucas will book transactions using the appropriate accounting rate so that the base currency amount are correctly stated. Where necessary, CS Lucas will recompute the appropriate average period exchange rate from the archived end of day rate.

b) At month end, the CS Lucas system generates month end journals for the following purposes:

i) accruals for interest income and expenses
ii) amortization/accretion journals
iiii) revaluation journals to compute the FX gains and losses.
iv) revaluation if monetary assets and liability.

c) Unless otherwise stated, all month end journals above are reversing in nature posted on the following day of the month end.

d) Settlement journals for transactions booked in the CS Lucas assume these above month end journals and their reversal. These settlement journals computes the correct FX realized amount and analyze it between capital and revenue as appropriate.

e) The “Cash at bank” accounts are not revalued by CS Lucas. Therefore, the Cash at Bank account needs to be restated for month end revaluation in the usual manner by the ERP system.

RELATED INFORMATION

Chart of Accounts

Accounting Journals Management

CHANGE HISTORY