General Ledger - Allocate Interest

Pgm: GLINTALL – Allocate Interest; standard Treeview path: General Ledger > Transactions > Allocate Cost Pools

Interest allocation allows for interest earned on specific cash accounts to be distributed from a central disbursing company to the individual companies represented by the accounts.

Consider the situation where there are several companies with one company functioning as a central disbursing company. The other companies transfer cash to the central disbursing company to cover pending commitments on an on-going basis. The disbursing company then pays the obligations on their behalf as they come due.

Through this process, interest is earned on the cash balance held by the central disbursing company, which is due back to the companies represented by the accounts.

This screen allows for the calculation of interest, due to these companies daily, and generates the appropriate transactions between the companies.

Selection Criteria

Company

Select/verify the company code.

Batch

Select or create a batch using the [Create Batch] button.

Journal

Select the journal code to which the allocation transaction should post. The batch type created will be “X”.

Interest Amount

Department, Account

Enter the department and account from which the interest will be dispersed to the companies and accounts listed in the next section.

From Date, To Date

Enter the from and to date from which interest should be allocated. When interest is calculated, the module will use this date range to calculate the daily ratio.

Interest Amount

Enter the amount of interest to be disbursed amongst the companies listed in the next section for the period specified by the date range.

Allocation

Enter the company code and department/account combination for each company that will receive the interest allocation.

When the [Generate] button is pressed, the module will calculate the amount of interest to be allocated per day for the date range entered in the Interest Amount section.

The interest allocation calculation works as follows:

  • Calculate the closing account balance for each company/department/account for each day in the date range.

  • Sum all the values to get a total closing balance amount.

  • Divide each company/department/account daily closing balance by the total closing balance amount. This is the daily ratio for that company/department/account.

  • Multiply the daily ratio by the total interest amount to be allocated to get the company/department/account daily interest allocation amount.

[Print Report] – Button

Press the [Print Report] button to print a listing of the values that have been generated. This report will appear in spreadsheet format with the columns displaying the days in the date range, and the rows displaying each company/department/account. At the intersection, each cell will display two values, the daily closing balance and the daily interest allocation amount.

[Generate GL Transaction] – Button

Press the [Generate GL Transaction] button to create an unposted batch of GL transactions from the generated figures in the previous step.

Edit the GL Transactions

Edit the General Ledger transactions by recalling this batch within the standard General Ledger Transaction Entry screen.

Post the Batch

Post this batch through the standard Batch Posting screen.