Record Unique Ledger Postings for Income Received

 

Eagle’s investment accounting solution allows Insurance companies to reconcile the investment accounting activity reflected on their investment schedules to related ledger accounts on their trial balances. For income activity, insurance companies reconcile income due and accrued amounts, current year income amounts received, and interest/dividends paid on acquisitions reflected on the insurance investment schedules to related amounts on the trial balance. You can use the following two accounting-basis level options, Income Received Accounting Flag and Mark to Market Accounting Flag, allow insurance companies to effectively perform this analysis for income activity. 

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. 

Option

Tag

Description

Option

Tag

Description

Income Received Accounting Flag

16557

Determines whether the selected accounting basis uses the income posting treatment to create separate entries within the ledger to identify interest income received and/or dividend income received in unique income ledger accounts. This option is for use by Insurance companies that need to reconcile the investment accounting activity reflected on their investment schedules to related ledger accounts on their trial balances. Options include: 

  • Yes. Allows the system to use the income posting treatment to create separate entries within the ledger to identify interest income received and/or dividend income received in unique income ledger accounts. The system records unique ledger postings for interest received recorded in an income ledger account for interest income received and for dividend income received in an income account for dividend income received. When interest receivables and/or dividends receivables are reduced for cash received, additional postings entries are required to record interest or dividends received. 

  • No. The system does not use the income posting treatment to create separate entries within the ledger to identify interest or dividends received in unique income ledger accounts.

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.. 

Account Number

Account Name

GL Post Type

GL Post Type Desc

GL Sub Acct

GL Sub Acct Desc

Need Memo Account

Account Number

Account Name

GL Post Type

GL Post Type Desc

GL Sub Acct

GL Sub Acct Desc

Need Memo Account

5001000181

Swap Expense Paid

IE

B

5(expense)

Incstmt

Y

4001000109

Interest Income Received

II

B

4(income)

Incstmt

Y

4001100109

Interest Income Received - st

II

B

4(income)

Incstmt

Y

4001200109

Interest Income Received - ce

II

B

4(income)

Incstmt

Y

4001000605

Dividend Income Received

II

B

4(income)

Incstmt

Y

4001000911

Swap Interest Income Received

II

B

4(income)

Incstmt

Y

3006000703

Trade Date to Settlement Date Gain on Interest

CA

B

3(Capital)

Incstmt

Y

3006100703

Trade Date to Settlement Date Gain on Interest - st

CA

B

3(Capital)

Incstmt

Y

3006200703

Trade Date to Settlement Date Gain on Interest - ce

CA

B

3(Capital)

Incstmt

Y

3006000704

Trade Date to Settlement Date Loss on Interest

CA

B

3(Capital)

Incstmt

Y

3006100704

Trade Date to Settlement Date Loss on Interest - st

CA

B

3(Capital)

Incstmt

Y

3006200704

Trade Date to Settlement Date Loss on Interest - ce

CA

B

3(Capital)

Incstmt

Y

3006000705

Trade Date to Settlement Date Gain on Dividend

CA

B

3(Capital)

Incstmt

Y

3006000706

Trade Date to Settlement Date Loss on Dividend

CA

B

3(Capital)

Incstmt

Y

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.

Options

Tag

Description

Options

Tag

Description

Mark to Market Accounting Flag

16634

Determines whether the selected accounting basis uses the mark-to-market breakout. This breakout is for use by Insurance companies that need to reconcile the investment accounting activity reflected on their investment schedules to related ledger accounts on their trial balances. Options include: 

  • Yes. Uses the mark-to-market breakout. Eagle Accounting create separate mark to market unrealized gain/loss accounts for each foreign-denominated receivables and payables. This only includes interest receivables, interest payables, dividends receivables, dividends payables, investment receivables, and investment payables accounts. It applies to all accounting bases as well as the STAT basis. In addition, the offset to the mark to market record in unrealized gain/loss non-asset accounts has its own accounts related to the specific receivable/payable account in Eagle Accounting. 

  • No. Does not use the mark-to-market breakout. Eagle Accounting's mark to market (MTM) process creates one asset/liability combining all mark to market unrealized FX gains/losses.

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.. 

Account Number

Account Name

GL Post Type

GL Post Type Desc

GL Sub Acct

GL Sub Acct Desc

Need Memo Account

Account Number

Account Name

GL Post Type

GL Post Type Desc

GL Sub Acct

GL Sub Acct Desc

Need Memo Account

1002000101

UNREALIZED FOREIGN CURRENCY INVESTMENT RECEIVABLE

MDF

B

1(ASSET)

BALSHEET

Y

1007000201  

UNREALIZED FOREIGN CURRENCY DIVIDENDS

MIR   

B

1(ASSET)

BALSHEET 

Y

1007000501 

UNREALIZED FOREIGN CURRENCY INVESTMENTS INTEREST RECEIVABLE  

MIR

B

1(ASSET) 

BALSHEET 

Y

1007100501 

UNREALIZED FOREIGN CURRENCY INVESTMENTS INTEREST RECEIVABLE - ST 

MIR

B

1(ASSET) 

BALSHEET 

Y

1007200501 

UNREALIZED FOREIGN CURRENCY INVESTMENTS INTEREST RECEIVABLE - CE 

MIR  

B

1(ASSET) 

BALSHEET 

Y

2002000101 

UNREALIZED FOREIGN CURRENCY INVESTMENT PAYABLE 

MDT  

B

2(LIABILITY) 

BALSHEET 

Y

2004000201 

UNREALIZED FOREIGN CURRENCY DIVIDENDS PAYABLE 

MIP 

B  

2(LIABILITY)

BALSHEET 

Y

2004000401 

UNREALIZED FOREIGN CURRENCY INVESTMENT INTEREST PAYABLE 

MIP

B 

2(LIABILITY) 

BALSHEET

Y

2004100401 

UNREALIZED FOREIGN CURRENCY INVESTMENT INTEREST PAYABLE - ST

MIP

B 

2(LIABILITY) 

BALSHEET

Y

2004200401 

UNREALIZED FOREIGN CURRENCY INVESTMENT INTEREST PAYABLE - CE 

MIP

B 

2(LIABILITY) 

BALSHEET

Y

4003000801 

MARK TO MARKETS - INVESTMENT RECEIVABLE  

OI

B 

4(INCOME) 

INCSTMT

Y

4003100801 

MARK TO MARKETS - INVESTMENT RECEIVABLE - ST 

OI

B 

4(INCOME) 

INCSTMT

Y

4003200801 

MARK TO MARKETS - INVESTMENT RECEIVABLE - CE 

OI

B 

4(INCOME) 

INCSTMT

Y

4003000802 

MARK TO MARKETS - DIVIDENDS 

OI

B 

4(INCOME) 

INCSTMT

Y

4003000803 

MARK TO MARKETS - INVESTMENTS INTEREST RECEIVABLE 

OI

B 

4(INCOME) 

INCSTMT

Y

4003000804 

MARK TO MARKETS - INVESTMENT PAYABLE 

OI

B 

4(INCOME) 

INCSTMT

Y

4003000805 

MARK TO MARKETS - DIVIDENDS PAYABLE   

OI

B 

4(INCOME) 

INCSTMT

Y

4003000806 

MARK TO MARKETS - INVESTMENT INTEREST PAYABLE 

OI  

B

4(INCOME) 

INCSTMT 

Y

4003100806 

MARK TO MARKETS - INVESTMENT INTEREST PAYABLE - ST 

OI  

B

4(INCOME) 

INCSTMT 

Y

4003200806 

MARK TO MARKETS - INVESTMENT INTEREST PAYABLE - CE 

OI  

B 

4(INCOME) 

INCSTMT 

Y

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.

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