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Use Unique Ledger Postings for Interest and/or Dividend Income Received

Eagle Accounting recognizes interest income through accrual processing, which results in an interest receivable and interest income postings. For stocks, Eagle Accounting recognizes dividends receivable and dividends income by establishing and then processing a corporate action for dividends to be received. The system updates the interest income ledger account on an accrual basis and updates the dividend income account on ex-date. When the system records cash entries for interest and/or dividends, it reduces the receivables for interest and/or dividends. However, there are no separate entries within the ledger to identify interest or dividends received in unique income ledger accounts.

For companies that need to post and record interest and dividend amounts received in unique ledger accounts that can be reflected on the trial balance, you can select the accounting basis election, Income Received Accounting Flag (tag 16557), in the panels that allow you to create or edit an entity, master fund, or accounting basis. A description of this option follows. 

When you use the Income Received Accounting Flag option's income posting treatment, the following occurs at a more detailed level.

• When Eagle Accounting recognizes interest income, it records it in the ledger as a debit to interest income receivable and a credit to investment interest income. It recognizes the interest income on an accrual basis within the ledger. When the system receives the interest income, it reduces the interest income receivable account with a credit entry and debits the cash account for the interest income received.

• When Eagle Accounting reduces the interest receivable account for cash receipts of interest, an additional ledger posting is required. The system debits the interest income account and credits a ledger account for interest received for the same amount. As a result of this additional entry, insurance clients can more effectively reconcile interest received amounts reflected in the ledger to annual statement schedules and exhibits that reflect interest received during the reporting period.

• When Eagle Accounting reduces the dividend receivable account for cash receipts of dividends an additional ledger posting is required. The system debits the dividend income account and credits a ledger account for dividends received for the same amount. As a result of this additional entry, insurance clients can more effectively reconcile dividends received amounts reflected in the ledger to annual statement schedules and exhibits that reflect dividends received during the reporting period.

• When you recognize interest and or dividend income without an offset to an interest and/or dividend receivable account, the interest or dividend income is recognized in only the income ledger accounts you created for either interest received or dividends received. Alternatively, you can create ledger accounts for capitalized interest and dividend income. For example, this can occur for income recognized in a taxable spinoff.

• When the cash is received/paid for swap income/swap expense, you can identify income/expense amounts in unique/new swap income paid or swap income received accounts. Swaps reclass cash dividends and coupons from the Swap Income ledger account to the Swap Income Received ledger account upon settlement. When cash dividends and coupons are processed on the pay leg of a swap, then the Swap Expense ledger account is reclassed to the Swap Expense Paid ledger account upon settlement. This reclass entry is made when settling manually, automatically, or via contract cash.

• The system can recognize interest and/or dividend income received amounts when tax reclaims are part of accounting transaction. When cash payments for tax reclaims are recorded, you can record interest or dividend received amounts with an offset to either interest or dividend income.

• You can record interest received amounts with an offset to interest income for disposition transactions for bonds.

• You can record interest and/or dividend received amounts with an offset to interest or dividend income when you recognize lot-specific miscellaneous income/expense cash transactions.

• The ledger postings for income received apply only to the STAT accounting basis.

• The system can use a separate trade date to settlement date gain/loss account for interest income. Otherwise, the trade date to settlement date gains and losses include both interest income and gains and losses resulting from settlements on foreign denominated investment receivables/payables. The separate identification of trade date to settlement date gain/loss for interest income can assist in the reconciliation to the statutory schedules for interest received. A separate trade date to settlement date gain/loss account is also available for dividend income. This applies for all accounting bases rather than just STAT.

The following accounts were added for the Income Received Accounting Flag option's income posting treatment. Related accounts were added to the STAR and Holding Term chart of accounts, along with IFRS custom charts.. 

Separate Mark to Market URGL Accounts for Foreign-Denominated Receivables/Payables

You can select the accounting basis election, Mark to Market Accounting Flag (tag 16634), in the panels that allow you to create or edit an entity, master fund, or accounting basis. A description of this option follows.

To support the use of the Mark to Market Accounting Flag option, the following accounts were added. Related accounts were added to the STAR and Holding Term chart of accounts, along with IFRS custom charts.. 

Report on Unique Ledger Postings for Interest/Dividend Income Received

All standard investment accounting reports reflect the accounts used when you select these basis-level options, including the Trial Balance report and the Working Trial Balance report, The Ledger Subledger Reconciliation report breaks out income on the ledger to income and income received.