T24 Business Induction Financial Accounting and Reporting – R18 G 1

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 The first topic on our agenda is the learning objectives

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 These are the learning objectives of this course.
Basics of Transactions and Entry
Interlink between T24 Applications and Category Codes
Understand the Types of Entries in T24
To read and understand balances in T24
Linkage between T24 Dates and Balances
Accounting Setup in T24
Examples of Consolidation of AL and PL items
Basics of Reporting and how to view reports

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 The first topic on our agenda is the learning objectives

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 A transaction is any business activity, which can be explained in terms of money. It
can be interpreted as to what a business receives and what a business pays. In a Bank,
the following are some examples of transactions :
Cash deposited by Customer into Savings account
Loan given to a Customer by the Bank
Customer buys a Demand Draft
Every business transaction is analyzed and the net effect of the transaction to the
firm’s assets/ liabilities / income and expenses.
This process of analyzing the transactions to derive the financial effect is called
posting of journals.
Double entry accounting is the process of analyzing transaction taking into the
account both the sides of a transaction.
Accounting entry is a systematic manner of recording a transaction. In T24, updating
the balance as a result of a transaction is an accounting entry.

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 In this workshop, let us transfer funds between two customer accounts.
You may also use the Funds transfer record that you had earlier created.

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 You may open the Funds Transfer record which you created in the earlier session and
try to look at the accounting entries raised.

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 Accounting Entry in T24, in this case is a STMT.ENTRY. The file STMT.ENTRY contains
the account number that is credited or debited. The sign of transaction and amount
of transaction along with the value date, transaction code, currency, reference
numbers are available in the STMT.ENTRY

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 The first topic on our agenda is the learning objectives

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 All business process applications refer to the Customer record during processing.
Therefore it must be opened before any Customer business activity.
T24 distinguishes its business applications as Account based and Contract based. This
comes from the underlying business of Banks which do allow balances in accounts to
switch from positive to negative sign on the one hand and a loan remaining always a
loan and a deposit always a deposit. Balances in these contracts never switch their
accounting sign

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 The importance of financial accounting to banks need not be over emphasized. Banks
are usually subject to very rigorous regulatory norms for reporting and their
disclosure requirements vary from country to country.
In keeping with its general design for maximum flexibility, the financial accounting
and reporting in T24 is very flexible and has a very unique design. It does not have
any predefined chart of accounts. This enables the banks to construct their General
Ledger in any manner they desire.
One of the important aspects of T24 is that all dealings with customers are classified
either as ‘Accounts’ or ‘Contracts’. There are also Profit and Loss headings (All these
products are Categories in T24).
Please recollect that contingent situation was discussed as part of introduction to
general accounting. Contingent is something that depends on an uncertain event
taking place. The uncertainty could be on the event happening itself – Not sure
whether it will happen or not, or simply on the “time” element – not knowing when
exactly it is going to happen

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 The first topic on our agenda is the learning objectives

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 STMT.ENTRY: Non contingent entries posted to Accounts which appear in the account
statement of customer and Internal Accounts
CATEG.ENTRY: Entries affecting Profit and Loss heads, both contingent and non-
contingent, are stored in CATEG.ENTRY file. These entries update consolidation
straight from Category codes without any intermittent accounts. Instead, during close
of business, they go and directly update the consolidation for PL heads.
RE.CONSOL.SPEC.ENTRY:
All entries other than those affecting non contingent balances in Accounts and
contingent and non contingent balances of Profit and Loss heads are grouped
together in RE.CONSOL.SPEC.ENTRY file.
The nature of entries in this file is quite varied.
All accounting entries raised for generating contracts, contingents as well as non
contingents are all in this file. When a loan transaction is input on the value date, it
generates non contingent loan. When it is input before its value date, it generates a
contingent loan. When a letter of credit or a guarantee is issued, they remain as
contingents till the Bank meets its obligation. Likewise, in the case of a three months
forward contract, till delivery, the obligation is contingent.
In a value dated accounting set up for Accounts, contingent entries raised are in the
nature of RE.CONSOL.SPEC.ENTRY.
All other entries affect contracts or accounts uniformly, like the entries for accruals or
capitalisation that affect the Assets and Liabilities side.
When positions are revalued, one side affects profit and loss while on the other side,

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 the Assets and Liabilities are revalued. The change in values of Assets and Liabilities is
done through entries in RE.CONSOL.SPEC.ENTRY .
The movement entries for updating transfer of balances between consolidation keys
are stored here. These are special entries and are unique to T24 set up of
consolidation keys.

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 In this workshop, let us open corporate loan and look at the accounting entries.
Use User Menu, Corporate Operations, Loans, Create Loans, Corporate Loans.

Here,
Input a loan for USD 10000 with Fixed interest rate of 5%.
Value date of loan is today. Maturity date is 4 days from the value date.
Debit an administrative charge of USD 50.
Authorise the record.

View the accounting entries of the contract after authorising the record using option
List of Today Entries Authorised.

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 We can find the Loan being booked here.

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 The accounting entries for this deal are seen here . Let us drill down and look into
each entry that is generated.

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 For the Loan creation we can find the deal booked under RE.SPEC.ENTRY.DETAIL.
Please remember that RE. SPEC.ENTRY.DETAIL is a consolidated form of
RE.CONSOL.SPEC.ENTRY

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 For the entries to the customer account we have a STMT.ENTRY generated
For the profit being booked as charges a CATEG.ENTRY is generated.

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 The first topic on our agenda is the learning objectives

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 Asset types help us to know whether the balance under a key is contingent or non-
contingent or accrued income or expenditure in nature.
Contingent and Non contingent Asset types are hard coded.
Accrued income and expenditure Asset types (other than for Account interest
accruals) take value from respective application level parameter tables. These will use
the underlying Profit and Loss category codes and not any alpha values.
You may recollect that Accruals are posted between the asset types and the PL on the
predefined frequencies. On captialisation the balance from the asset types is posted
to the account or contract balances.
When PL Category code 53000 is used to post the income/expense, the accruals are
posted between Asset type 53000 and PL53000.
FORWARDCR is an asset type for credit contracts prior to Value Date.
FORWARDDB is an asset type for debit contracts prior to Value Date.
CREDIT and DEBIT are the asset types for Credit and Debit balances in Accounts
respectively. New accounts will be opened under the asset type NILOPEN and then
move to the respective asset type based on the balance during COB.
LIVECR and LIVEDB are asset types for Credit and Debit Contracts from Value to
Maturity date.
50000 (interest payable) and 51000 (interest receivable) are the asset types for
accrual balances. These asset types are hard coded. It is not parameterised
anywhere.
You may note that Asset types replaces the usage of GL heads for payables and

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 receivables and principal balances in T24 virtual accounting.

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 In this workshop, let us open corporate loan for future value date and analyse the
contingent balances.
Use User Menu, Corporate Operations, Loans, Create Loans, Corporate Loans.

Here,
Input a loan for USD 5000 with Fixed interest rate of 5%.
Value date of loan is future date . Maturity date is 4 days from the value
date.
Authorise the record.

View the updates for contingent balances in ECB record of the contract.

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 We can find loan is booked with a future start date (value date). This is a contingent
transaction.

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 We can find the contingent asset types in ECB namely FORWARDDB and
FORWARDDBBL.
Pls note: FORWARDDBBL is self-balancing entry for contingent sheet item and this
would dealt in an advanced accounting course.

For the non-contingent contract created earlier you can see the non-contingent asset
type LIVEDB

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 Booking date: Otherwise called as Transaction date. Date on which the transaction is
booked in the system. System date on which the Entry was generated that is Today
Field in the DATES record for the Company being processed. The booking date is
normally, but not necessarily the actual date at the time the Entry is generated, e.g. if
the previous day's business is still being processed after midnight, the actual date
changes, but the run date is still the previous day.
Value date: The date on which the entry is to be given value for interest purposes. If
the Value Date is not entered in the originating transaction, a default date may be
generated by the system depending on rules specified in the application.
Exposure Date: The date on which Account’s cleared balance will be credited. Date
can be present in Credit Entries or Debit Entries which are reversals of Credit Entries.
If this field is blank, the Exposure Date is assumed to be the same as the Booking
Date but cannot be less than the value date. Please note that this date does not
affect the Value Date on which the Entry updates the Balance for interest purposes.
Processing Date – The date on which transaction is to be processed. This can be
current or future date but cannot be back dated.

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 T24 Account table stores only the static information of the account. The financial data
is updated in EB.CONTRACT.BALANCES. Account table can be enabled to hold the
balance related fields along with the account static information.

Actual balance contains the actual (un cleared) balance of the account as of now
from all authorized transactions. It can also be defined as total of cleared balance and
credit entries with future exposure date

Cleared balance includes values of all authorised entries over the Account except any
credit or reversal of debit entries with future exposure dates.

Working balance is value of cleared balances and unauthorised debit entries over the
account. Working balance is useful for checking of limits attached to an Account.

Available balance is maintained as a ladder to show date wise cash flow in an

account.

The opening balance for a day is recorded under open actual balance and open
cleared balance while the current online balance during the day is available under
online actual balance and online cleared balance.

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 The associated currency tables are CURRENCY.PARAM, CURRENCY.MARKET and
CURRENCY.
CURRENCY.PARAM is the parameter file and defines the numeric code and the
decimal points for the currency.
CURRENCY.MARKET is used to create different forms of money available in the
particular currency. Eg: cash, card, etc.
Upto 99 currency markets possible in T24.
The buy and sell rate for each currency market can be different and is defined in
CURRENCY table

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 In this workshop, let us view account balances using EB.CONTRACT.BALANCES

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 From the ECB record we can find the balances of the account under the asset type,
working balance, actual balance, cleared balance, Available balance in the form of
cash-flow ladder.
The unauthorised entries for the account can also be identified from ECB.

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 From the ECB record we can find the balances of the contract under the principal
asset type, and accrual asset type.

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 Entries for accruals, capitalisation and contract maturity are generated during COB .

A Bank may like to prepare its Profit and Loss accounts on a daily basis. Hence, every
day it would accrue interest. These accruals are not passed on to Customer accounts
if the Bank wants to settle the interest on a different frequency. For accruals in a loan,
Interest receivable is debited and Profit and Loss is credited.
In T24, Interest Accruals are stored in ASSET.TYPEs . So there is no need to open any
account head for Interest Receivable. If the loan is consolidated as Corporate Loan to
Shipping industry, then the interest due on these loans will also be consolidated
under the same heading but as a different Asset type – Interest receivable.
For debiting this Asset type, a RE.CONSOL.SPEC.ENTRY is generated and to credit the
PL, a CATEG.ENTRY is generated.
When the bank settles the accrued interest, accruals till the date are reversed
through a RE.CONSOL.SPEC.ENTRY and to settle it to the customer account,
STMT.ENTRY is generated

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 The first topic on our agenda is the learning objectives

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 The general ledger is the main accounting record of a business.
Accounting entries are generated for all the transactions and the account balances
are updated.
During COB, the balances are replicated to the General Ledger (GL) heads.
Characteristics of the traditional GL are:
1) Multiple GL Account heads
2) All desired combination of accounts to be opened whether required or not.
3) Any further classification very difficult.

Under the traditional way of maintaining General ledger accounts, an account needs
to be opened in every currency, for every product, and for every further sub-
classification.
Assume that a Bank deals in 5 currencies, has 10 products, maintains them by
industry wise (say 30 industries), it needs 1500 accounts (5 X 10 X 30).
Further sub-classifications like Sector or Dealing officer, etc would increase the
number of accounts.

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 Assets and Liabilities are balances from Customer accounts, Internal accounts and
Contracts.
Entries affecting non contingent Account balances are stored in STMT.ENTRY file for
Customer accounts and Internal accounts. These entries are used to produce
Statements for Customers and for internal accounts.
All other entries affecting Assets and Liabilities are stored in RE.CONSOL.SPEC.ENTRY
file.
T24 does not open accounts for Profit and Loss items. The balances are consolidated
straight from Category codes.
Entries affecting Profit and Loss heads, both contingent and non-contingent, are
stored in CATEG.ENTRY file. These entries update consolidation straight from
Category codes without any intermittent accounts. Instead, during close of business,
they go and directly update the consolidation for PL heads.

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 STMT.ENTRY generated for non contingent balance of Accounts and
RE.CONSOL.SPEC.ENTRY generated for all other assets and liabilities are consolidated
into GL heads called Asset and Liabilities Keys.
Contingent and non-contingent entries generated for updating PL heads are
consolidated into GL Heads called PL Keys

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 The first topic on our agenda is the learning objectives

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 Here we can find a screenshot of the CAL key

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 We can find a sample CPL key here
Under a PL key, the consolidated balance appears as balance for the current month
and also balance from year beginning to last month end. If these two figures are
added, it gives the balance from year beginning till date.
Some Banks present the current month earnings, from year beginning till month
beginning and then the total earnings. To enable such presentation, T24 holds
balances like this.
The balances are held currency wise, in the currency in which they were earned or
incurred. Local currency equivalent value is also provided.

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 The first topic on our agenda is the learning objectives

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 Accounting entries generated under these three broad headings can be
consolidated into user definable AL and PL groupings called as Keys. The
design of keys is driven by reporting requirements. They are called Central
reporting Files. From these, any user defined report could be generated –
closing balance type or movement type; showing residual maturity or
without; profit and loss in currency in which earned or in local currency etc.
In Accounting, choice is available to choose Trade dated or value dated
accounting and Category codes. In consolidation, key design is done with
reporting requirements in view and is unique to every implementation site.
The keys have some parts of a standard structure. Information under a key is
also standard. Reports are fully user defined with in-built flexibilities.

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 This diagram maps out the flow for creating financial reports.
You can see, the financial data resulting from transactions, have been consolidated by
the system according to the consolidation criterion defined in CONSOLIDATE.COND.
The T24 concept does not have General Ledger accounts, but the selection criterion
of CONSOLIDATE.COND enable us also to create reports, respectively lines. The
consolidated records are stored in CAL and CPL tables.

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 In T24, a report is built like a traditional house.
To build a house, first we build a strong foundation, upon which we build the
Columns, then the Roof and finally the Walls. Of course, we build the house
depending upon the requirements and specifications.
Extending this analogy, for a T24 financial report, the foundation or the primary
source of information is the CRF (Central Reporting File), which as you know
comprises the two consolidation tables CAL and CPL (CONSOLIDATE.ASST.LIAB and
CONSOLIDATE.PRFT.LOSS).
A T24 financial report is like any other report, a two dimensional array of columns
and rows. In T24, we refer to the rows as lines. Similar to building a house, to design a
T24 financial report, you have to first design its Columns and Lines. The Columns are
the type of information to be reported across a report column. In T24, once you
design a column, you can use it across any report. It could represent an opening
balance, a closing balance, total credit transactions, total, etc.
Finally, the Lines decide which information is reported in a row. For example, in the
first row, you may decide to report deposits and in the second row the loans.

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 You will now see some of the financial reports generated in T24 to learn their
important design components. Various types of reports can be produced from T24
Central Reporting File (CRF) balances. The screenshot shows the specimen of a
report produced.
This report shows the Closing Balances under different groupings like Cash, Due from
Banks, etc. Above the Line 0030 CASH, you can see individual CAL keys listed with
balances. Such a report which reports CAL keys and information from them, are
known as CRF reports.
If you further analyse the report, you can see that it has three Columns and multiple
Lines. The first column holds sequence Nos. and the second column is the
description of Lines. You can see that they do not hold any financial information,
and thus we will refer to them as “Descriptive Columns”. While the third one, which
reports financial amounts will be referred to as a “Financial Column”.
If you look at the first and second Lines, there is no amount under the financial
column, and we will refer to such Lines as “Heading” Lines. You can see that in the
Line 0030 Cash Balance, there is an amount, and we will refer to it as a “Detail” Line.
Finally, you can see that in the TOTAL CASH Line, though there is a financial amount,
no keys are listed above that. Why? Because, it is not reported from CAL keys, but a
calculated total is printed here. We will refer to such Lines as “Total” Lines.
To recap, CRF reports contain amounts only from CRF i.e. CAL and CPL tables. A
report comprises of some descriptive and some financial columns. Similarly some
Lines are just Headings, some report financial amounts and some just report totals.

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 If you compare this report, with the previous one, you can see that this report gives
the details of individual cash account balances under the row Cash Balance. For
instance, details like Customer, Account Number, Interest rate, Interest Day basis,
Value date etc. which are fetched from T24 Balance files/Applications like Accounts
and Contracts. Such a report, which gives the balances of individual accounts and
contracts under a consolidation key, is referred to as a CRB report.
CRB reports are also based on the CRF base i.e. CAL and CPL tables, and in addition
they report the balances of underlying contracts and accounts.

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 The screenshot shows a CRD (Difference) report containing the balances of
underlying contracts and accounts.
The report lists the difference, if any, between consolidation records’ balances and
balances of underlying contracts and accounts.

CRF GLSHORT shows the Asset and Liabilities position balancing against the P&L and
net position equals to zero

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 Combined CRF reports can be produced for a group of Companies. The reports are
known as CRC reports, and the Report Id will be pre-fixed with CRC.

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 During Close of Business, system generates a variety of reports. A sample of such a
report is seen here.

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 This is an example of Close of Business report on credit lines to be reviewed.

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 In this workshop, let us learn how to search and view a report.

In Command line type “ ENQ REPORT.LIST”

In REPORT.LIST enquiry, search for a CRF and view the report.

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 The search and some sample results are found here.

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 On drilling down further we can see the report as seen here.

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 In this workshop, we can view the Model bank Balance sheet and P&L (Income)
statement.
We can also view the currency-wise GL report.

Use User Menu, Finance, Finance – Operations, View UMB (universal model bank)
General Ledger Reports, View Balance Sheet.

Use User Menu, Finance, Finance – Operations, View UMB General Ledger Reports,
View Profit & Loss.

Use User Menu, Finance, Finance – Operations, View UMB General Ledger Reports,
View CCY wise General Ledger report.

PMB – Private model bank

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 Use User Menu, Finance, Finance – Operations, View UMB General Ledger Reports,
View Profit & Loss.

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 The Profit and loss report is seen here.

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 Use User Menu, Finance, Finance – Operations, View UMB General Ledger Reports,
View Balance Sheet.

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 The General Ledger report, the balance sheet is seen here,

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 Use User Menu, Finance, Finance – Operations, View UMB General Ledger Reports,
View CCY wise General Ledger report.

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 The currency wise report prepared is seen here.

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 In this workshop, we can find the GL report and PL report mapping to the respective
Line records defined.

Use User Menu, Finance, Finance – Operations, GL Line Mapping

Use User Menu, Finance, Finance – Operations, PL Line Mapping

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 In this workshop, we can find the details of the CAL record that would be pulled up
the for the respective lines in each report. This is the mapping of the Line to selection
of CAL items.

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 In this workshop, we can find the details of the CPL record that would be pulled up
the for the respective lines in each report. This is the mapping of the Line to selection
of CPL items.

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T24 Account

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