fi331 investment accounting v9 rfp

Copyright United Nations

FI331 Umoja Investment Accounting

1

Umoja Investment Accounting Version 9

Last Modified: 31-May-13

Copyright United Nations Copyright United Nations

Agenda

2

Course Introduction

Module 1: Transaction Execution Investments

Module 2: Transaction Execution Foreign Exchange

Module 3: Investment Accounting Daily Process

Module 4: Investment Accounting Period-End Process

Course Summary

Course Assessment

Course Survey



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Introduction

3 Copyright United Nations


Please consider the following guidelines during the training session:

Turn your cell phone to silent mode. Please step out of the class to take any important phone call.

Please do not access your e-mail or the Internet outside of breaks.

Participate fully in the training session and respect each others contribution.

Breaks are included at the discretion of the trainer.

Ground Rules

4

X X

No Phones Ask Questions Participate Breaks Do Not Access E-mail


Course Overview

The purpose of the Umoja Investment Accounting course is to introduce you to Investment Accounting processes and transactions in Umoja. You will also go through relevant transaction simulations for Investment Accounting.

Prerequisite Review

You should have completed the following prerequisite courses:

Umoja Overview

Umoja Master Data and Coding Block Overview

Umoja Cash Management and Treasury Overview

Umoja SAP Navigation

Umoja BI Navigation

Course Duration: 6 hours

5


Course Objectives

After completing this course, you will be able to:

Explain the roles and responsibilities involved in the Investment Accounting processes

Review FOREX Exposure and perform spot transactions

Process foreign exchange investment decisions

Update the Umoja Security Master

Enter and approve Investment Transactions into Umoja and post derived flows

Account for Premiums and Discounts

Modify Investment Transactions

Generate, review and post accounting entries for accrued income and amortization of premiums/discounts

Update reference rates for Variable Rate Bonds (floating rate securities)

Distribute investment income and expense to the investment pool participants

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Agenda

7

Course Introduction





Course Summary

Course Assessment

Course Survey



Module 1 Objectives

After completing this module, you will be able to:


Enter Investment Transactions into Umoja

Approve Investment Transactions entered into Umoja

Post Derived Flows





Key Term Description

Business Partner Any third party participating in a trade. This would include brokers, custodians, issuers of Securities and Trade Counterparties.

Online Trading Platform/System

Software interface which allows a legally binding financial transaction to be performed on terminals or through desktop software. System communication is performed via closed networks or secure Internet connections.

Payment Requests

Payment messages created by the Umoja Treasury component after confirmation and settlement of the trade. Payment requests are cleared by Umoja, which results in a posting in General Ledger bank accounts and, where applicable, issuance of Payment Media (EFT, SWIFT and so on).

Key Terminology

9



Straight-Through-Processing

A sequence of events set into a logical automated process without the need of re-entering master or transactional data across the entire process.

SWIFT

Society for Worldwide Interbank Financial Telecommunication.

An industry cooperative that provides a standard format for transmitting payments and other financial messages to more than 7,500 member banks, broker dealers and organizations around the world.

Trade A contract between the UN Treasury and an approved counterparty to buy or sell a Financial Instrument.

Key Terminology

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Roles & Responsibilities

The following Umoja Enterprise roles are involved in the Investment Accounting process:

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Back Office Treasury User

Confirms all investment trades Issues daily investment reports and ensures distribution of net

income to participating funds and grants in overall IPSAS compliance Maintains custodian relationship Reviews/authorizes treasury related wire transactions Provides supporting documentation related to investments for

financial reporting

Cashier

Generates all payments (F110) in Umoja and manages Cash Control by fund/grant

Raises any issues identified through Cash Controller to Finance Managers for resolution

Ensures that bank data are reflected in SAP accurately and timely to allow Front Office to manage daily liquidity

Verifies that all bank communication files are processed and accepted by SWIFT/banks in a timely manner


Roles & Responsibilities

The following Umoja Enterprise roles are involved in the Investment Accounting process:

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Investment Cashier

Generate all payments (F111 ) in SAP Ensure that bank data are reflected in SAP accurately and timely to

allow Front Office to manage daily liquidity Verify that all bank communication files are processed and accepted

by SWIFT/banks in a timely manner


Introduction to UN Investment Pools

UN HQ Treasury is responsible for managing excess cash on the behalf of missions and OAH. The investment are made according to the CPPI guidelines. The objective of the investment pools in decreasing priority are:

1) Security

2) Liquidity

3) Return

To optimize investment returns and maintain liquidity, UNHQ Treasury pools the investments in two portfolios:

USD Investment Pool

EUR Investment Pool In addition, UNHQ Treasury also manages investments in CHF on behalf of UNSMIS.

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Review of IPSAS Compliance for Investment Accounting

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The Umoja Solution is designed to reinforce compliance of International Public Sector Accounting Standards (IPSAS). Compliance in UN investment accounting is achieved through the following parameters:

Fair Value through Surplus or Deficit

Adherence to Trade Date over Settlement Date


Contributing Factors to Investment Decisions

Front Office determination of appropriate investments is based on specific factors:

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UNHQ Treasury invests in the following types of financial instruments:

Time Deposits

Money Market Funds

Fixed/Variable Income Bonds (US Treasuries, Bonds, Notes and Bills)

The settlement process followed depends on the type of financial instrument being traded.

Interest Rates Duration Terms Risks Counterparty

limits


Processing Investments in Umoja

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Investment officers run the trades using Bloomberg Aim. Ultimately, trade details will be interfaced from Bloomberg to Umoja; however this interface is not being implemented for Pilot. Until the interface is in place, the trades will have to be manually keyed in Umoja.

Once a trade is recorded in Umoja, Investments back office will go through the trade settlement process, which includes confirming trade details with the counterparty, creating SWIFT confirmation / payment instructions and posting the trade.

If the trade involves a new financial instrument then the following steps need to be completed before the trade can be recorded in Umoja:

1. If the instrument is from a new issuer then the issuer has to be set up in BP as an issuer by the master data team

2. Once the BP is created then the security master details have to be set up in Umoja by the Investment back office


Processing Investments in Umoja

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The first part of this module reviews the different types of investments related transactions processed. Process steps conducted in Umoja are highlighted in blue. The second part of this module walks through the execution of Umoja-based activities conducted by Investment Operations and the Front Office.

Recording and settling Investment Pool Deposit

and Withdrawals

Recording, confirming and settling Money Market Investments

Recording, confirming and settling Fixed

Income Investments


Processing Investment Pool Deposit/Withdrawals

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Create deposit/withdrawal

blotter and submit to

Investment Operations

Confirm that the appropriate

Investment Account exists

Create the necessary

fund/business area/cost

center

Cashiers Office Investment Operations Master Data Team

No

Transaction is uploaded

using JVs

Balance sufficiency is

confirmed Ye

s No

Transaction is reviewed

for accuracy Ye

s

Post transactions and create

SWIFT messages

Release SWIFT

message


Processing Fixed Term Deposits

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Place investments

Release

SWIFT

message

Confirm counterparty

exists in Umoja No

Add bank in BP

as a counterparty

Record investment in

Umoja Confirm investment

with counterparty

Approve and post

investment, create

SWIFT message

Yes

Cashiers Office Investment Operations Investment Front Office Master Data Team


Processing Fixed Income Investments

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run trade in Bloomberg

Cashiers Office Investment Operations Investment Front Office

No

Master Data Team

Confirm broker/issuer exists

in Umoja No

Add broker/issuer to

Umoja as BP

Confirm if security exists in

Umoja Enter security master

details in Umoja

Confirm trade with

counterparty

Yes

Record trade in

Umoja

Release

SWIFT message

Authorize trade

settlement, create

SWIFT message

Yes


Investment Activities Conducted in Umoja

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The remainder of this module takes a detailed look at the activities conducted in Umoja to process different types of investments. These activities include:

Updating the Security Master

Entering Investment

Transactions

Approving Investment

Transactions

Posting Derived Flows

Accounting for Premiums and

Discounts

Modifying Investment

Transactions

Reversing Investment

Transactions


Update the Security Master

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Security Master details must exist in Umoja before a fixed income transaction can be recorded. Security Master would be automatically loaded from Bloomberg. However until the Bloomberg to Umoja interface is in place, the information would be maintained by the Investment Operations team. Please follow the steps below to add Security Master details: Step 1: Launch the security master screen: Enter FWZZ in the Command field Click Enter

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The Display Class Product Type screen appears.

Step 2: Click the Create icon

This launches a new Create Class window. Step 3: Enter the following information: security ID number product type short name of the security long name of the security

Unless an exact replica of an existing security is to be created, select Without reference option. Step 4: Click the Create icon

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The Display Class Product Type screen re-appears with the securitys information populated across seven tabs: Search Terms Basic Data Conditions Exchanges Notice Regulatory Reporting User Data Lets review the information modified in each tab.



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Step 5: Fill in the required fields located in the Basic Data tab: Issuer Currency Issue Start Date End of Term Date

Step 6: Press the Enter key to validate inputs before moving to the next tab. Step 7: Click the Conditions tab

Note: The maturity date is determined by the Issue Start and End of Term dates. The same date should be used for both of these fields.

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The Conditions tab contains all information related to coupon and final payment, such as interest rates, calculation method, interest payment frequency and schedule.

Step 8: Enter the following information: Percent Frequency

Step 9: Press the Enter key to populate the Calculation Date and Due Date.

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l

k l

Note: Information should be modified in Int. (per-quoted) only. Final repayment should not be modified.



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Step 10: Double-click the int. (per quotes) row to view condition details The Condition Details window appears. Step 11: Select the appropriate

Int.calc.method (specifies coupon calculation method)

Note: The due date listed must match the first payment date of the security (Eff. From date). If the dates do not match, modify the due date manually.



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The Exchanges tab specify the initial price (normally price at first purchase). Step 12: Click the Insert Row icon to open the Assign Exchanges window Step 13: Select OTC_US and click the Save icon Step 14: Highlight the OTC_US row and click the Market Prices button



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The Security Prices Change screen appears. Step 15: Click the Display Change icon Step 16: Enter price date and rate and click Save


Entering an Investment Transaction into Umoja

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The process followed to enter an investment transaction into Umoja differs depending on the type of financial instrument being traded. To demonstrate the process followed, a fixed-interest bond is entered into Umoja in the next slides. Treasury Front Office enters the trade information in Umoja via the following steps: Step 1: Access the Create Financial Transaction Screen Enter FTR_create in the Command field Click the Enter icon

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The Create Financial Transaction screen appears. The information entered in the Header section of this screen defines the product being traded.

The product selected determines the Transaction Types available:

Product Types

CPS Commercial Papers and Discounted Securities FIB - Fixed Interest Bonds VIB - Variable Interest Bonds FTD - Fixed Term Deposits

Product Types

PUR - purchase (Bonds) SAL - sale (Bonds) INV - investments (FTD)



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Step 2: Enter the required transaction data: Company Code (always 1000) Product Type Transaction Type Business Partner Transaction Currency Portfolio

The ID number automatically populates Step 3: Press the Enter key to

continue

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USDPOOL h

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The Create Security Transaction: Structure screen appears containing detailed information on the transaction being created across a series of tabs.

Lets review each of the

tabs and walk through the

information entered in

each when entering an

Investment Transaction in

Umoja.



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The Structure tab contains information that defines the terms of the transaction, including transaction nominal and payment amounts, valuation class, payment/value/posting dates, market price and accrued interest. Step 4: Enter the following information in the Structure tab:

Securities Account

Pos. Value Date

Nominal Amount

Step 5: Press the Enter key

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The Administration tab contains information that identifies where trading funds will be pulled from, required authorizations and investment type.

Step 6: Enter the following information in the Administration tab:

Portfolio

Fund

Grant (always GMNR)

Step 7: Press the Enter key

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The Other Flows tab contains information on interest, costs and charges that will be factored into the transaction total. Examples include Accrued interest and processing charges.

Step 8: Confirm the Accrued

Interest amount displayed in the Other Flows table is correct



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The Payment details tab displays specific information on where payment funds are being pulled from and whether or not a payment will be submitted with the trade settlement.

The House Bank Account from which the funds are being pulled is auto populated based on information entered earlier in the process.

Note: Today, payment is not submitted with each trade. The custodian handles payments for individual trades and is then paid is a bulk sum at the end of the day.

If trades are paid individually, the Payment Req. must be checked.



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The Cash flow tab lists all flows included in the transaction including the actual purchase and additional flows listed in the Other Flows tab.

Step 9: Confirm that the

Umoja generated flows

match that from the

Bloomberg ticket



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Step 10: Once all tabs have been reviewed and completed, click the Save icon

The Create Position Indicator window appears.

Step 11: Click the Create Automatically button

The Investment Transaction has been successfully entered into Umoja.


Approving an Investment Transaction in Umoja

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Once the investment transaction is created, it goes to the Investment Operations group for confirmation and settlement. The following steps are performed to approve and post the transaction: Step 1: Launch the Edit Financial Transaction screen Enter FTR_EDIT in the Command field Click the Enter icon

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Approving an Investment Transaction in Umoja

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The Edit Financial Transaction screen appears.

Step 2: Enter 1000 in the Company Code field Step 3: Enter the correct transaction number in the Transaction field Step 4: Click the Settle button Step 5: Verify the accuracy of transaction by reviewing each of the tabs on the Financial Transaction screen Step 6: Click the Save icon at the top of the screen to post the transaction


Posting the Derived Flows in Umoja

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Derived flows are created when the investment transaction is entered into Umoja, but these flows cannot be posted until the transaction has been approved. Once the transaction has been approved, the derived flows are posted using T-code TBB1: Step 1: Post the derived flows Enter TBB1 in the Command field Click the Enter icon

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b a b



The Treasury: Post Flows screen appears.

Step 2: Enter the following information:

Company Code

Transaction Number

Date

Step 3: Select the Test Run checkbox

Step 4: Click the Execute icon

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Note: A test run should be conducted first to make sure the correct postings are made

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The Posting Log: Posted Business Transactions screen appears displaying the accounting flows for the transaction as they will appear in the General Ledger.

After confirming that the information listed is correct, the flows must be posted (remember, this posting was run in test mode). Step 5: Click the Back icon Step 6: Uncheck the Test Mode checkbox Step 7: Click the Execute icon


Account for all Premiums and Discounts

45

Finally, all premiums and/or discounts applicable to the approved transaction must be accounted for. This transaction should also be run in test mode, first to review and confirm the information generated. Step 1: Access the Fix and Post Derived Business Transactions screen: Enter TPM18 in the Command field Click the Enter icon

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The Fix and Post Derived Business Transactions screen appears: Step 2: Enter the appropriate data: Select the Securities check box Company Code Investment Transaction ID Number Securities Account TRL Date (must match posting date) Step 3: Click the Execute icon

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A table containing the positions with Derived Business Transactions to be fixed appears on the screen. Step 4: Confirm the information is correct Step 5: Click the Fix button to post the flows



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The premium/discount flows are posted.


Modify or Reverse a Transaction

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Modifications / reversals of trade should be initiated by the person / group that recorded the trade. It is possible to modify a trade even after security flows have been posted so the need to reverse a trade should be very rare. Once a transaction is modified or reversed, accompanying flows must be reversed before re-posting the flows again. Investment Operations will be responsible for reversing the appropriate flows, depending on what stage the transaction is in. Example: If the trades do not match, Investment Operations will inform Front Office who will take the required action to by modifying or reversing the trade.

If reversal is required, initiate reversal

Clear all open items Confirm reversal

Reverse trade in Trading platform

Resolve differences with Counterparty

Correct trade in trading platform

Modify transaction in Umoja

Reconcile Trading

Platform position with

Umoja

Modify a transaction

Reverse a transaction

Note: If a transaction needs to be modified, but it has already been approved and its flows have been posted, then the transaction must first be reversed before it can be modified.


Modify a Transaction

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The process followed to modify an investment transaction varies, depending on where in the entry process the transactions is

If then The investment transaction is in contract state The transaction can be modified

The investment transaction has settled Reverse the transaction to contract state

The investment transaction has settled and the derived flows have been posted (TBB1 and TPM18)

Reverse the transaction to contract state and run TPM10 to reverse the postings which took place in TBB1 and TPM18

Accruals (TPM44) and amortization (TPM1) postings have been made

Delete the postings by running TPM45 and TPM2 respectively, Reverse the transaction to contract state and run TPM10 to reverse the postings which took place in TBB1 and TPM18

Note: To delete the transaction from Umoja entirely, reverse the transaction from contract state.



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Modify a transaction in Umoja: Step 1: Access the Edit Financial Transaction screen: Enter FTR_EDIT in the Command field Click the Enter icon

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The Edit Financial Transaction screen appears Step 2: Enter 1000 in the Company Code field Step 3: Enter the correct transaction number in the Transaction field Step 4: Click the Change button



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The Change [investment]: Structure screen appears. Step 5: Modify the data that needs to be updated, then click the Save icon at the top of the

screen


Reverse a Transaction

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Reversing a transaction whose derived flows have not been posted: Reversal of transactions should be initiated by the front office. Step 1: Access the Edit Financial Transaction screen: Enter FTR_EDIT in the Command field Click the Enter icon

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The Edit Financial Transaction screen appears. Step 2: Enter 1000 in the Company Code field Step 3: Enter the correct transaction number in the Transaction field Step 4: Click the Reverse button



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Reversing a transaction whose derived flows have been posted: Step 1: Access the Edit Financial Transaction screen Enter FTR_EDIT into the Command field Click the Enter icon

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The Edit Financial Transaction screen appears. Step 2: Enter 1000 in the Company Code field Step 3: Enter the correct transaction number in the Transaction field Step 4: Click the Reverse button Step 5: In the subsequent window, select the appropriate reversal reason and save



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If the derived flows have already been posted (TBB1 and TPM18) then they should be reversed by the Investment Back Office. Step 6: Access the Fix, Post or Reverse Transactions page: Enter TPM10 in the Command field Click the Enter icon

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The Fix, Post or Reverse Transactions screen appears.

Note: If a transaction is reversed or modified after the input date, that is, if TPM1and TPM44 have already run, then those postings have to be reversed using TPM2 and TPM45 respectively. The reversals have to be run one day at a time.


Reverse a Transaction Valuation and Accruals

60

Reversing a transaction for which amortization and accruals have been posted: Accruals and amortization will need to be reversed separately for each day since the settlement date of the transaction. Example: If today is June 15th and we want to reverse a transaction that was settled on June 12th, accruals and amortization must be reversed separately for the 15th, 14th, 13th and 12th respectively. Lets begin with Reverse Valuation. Step 1: Access the Reverse Valuation screen Enter TPM2 in the Command field Click the Enter icon

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Reverse Valuation

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The Reverse Valuation screen appears. Step 2: Confirm the Key Date for

Valuation is correct Step 3: Select the appropriate

Reason for Reversal Step 4: Select the Test Run checkbox

so that data can be verified before actual execution



Reverse Accrual/Deferral of Expenses and Revenues

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Step 1: Access the Reverse Accrual/Deferral of Expenses and Revenues screen: Enter TPM45 in the Command field Click the Enter icon

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Reverse Accrual/Deferral of Expenses and Revenues

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The Reverse Accrual/Deferral of Expenses and Revenues screen appears. Step 2: Confirm that the Accrual/Deferral

Key Date is accurate Step 3: Select the appropriate Reason

for Reversal Step 4: Select the Test Run checkbox

so that data can be verified before actual execution



Learning Checkpoint 1

True/False: If the security is new then security master details must be provided to back office to enter into the system

Select all that apply.

A. True

B. False

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True/False: If the security is new then security master details must be provided to back office to enter into the system

Select all that apply.

A. True

B. False

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This correct answer is True. A security must exist in the Security Master before it can be entered as an investment transaction in Umoja.



Which of the following t-codes is used to approve an investment transaction?

Fill in the blank with the correct option.

A. TPM_CREATE

B. TPM_EDIT

C. FTR_CREATE

D. FTR_EDIT

E. TPM1

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A. TPM_CREATE

B. TPM_EDIT

C. FTR_CREATE

D. FTR_EDIT

E. TPM1

Which of the following t-codes is used to approve an investment transaction?

Fill in the blank with the correct option.

Option D is the correct answer. The FTR_EDIT screen is accessed in order to approve an investment transaction that has already been created.


Module 1 Summary

The key points covered in this module are listed below:

Front Office determination of appropriate investments is based on specific factors such as interest rates, duration, terms, risks, and counterparty limits

Securities are setup in the Umoja Security Master prior to the execution of investment transactions

Enter Investment Transactions are entered in Umoja via the T-code FTR_CREATE and approved, modified and reversed via the T-code FTR_EDIT

Derived Flows, Premiums and Discounts must be reversed individually for transaction modifications and reversals

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Agenda


Course Introduction





Course Summary

Course Assessment

Course Survey


Module 2 Objectives


Review FOREX Exposure

Perform Spot transactions





Functional Currency It is an accounting concept relating to the currency in which the majority of transactions are performed.

Foreign Exchange (FX) These are transactions involving purchase and sale of other currencies.

FX Exposures The risk of loss stemming from exposure to adverse foreign exchange rate movements.

Spot Transactions These are transactions to buy or sell a particular currency on the spot date. In the FX market spot transactions normally settle two business days after the trade date.

Forward contract It is a financial contract between two parties to buy or sell an asset at a specified price at a future date after the spot date.

Option contract

It is a financial contract that provides the buyer the right, but not the obligation, to engage in a specific transaction, while the seller incurs the obligation to fulfill the transaction if so requested by the buyer.

Online Trading Platform

It is a software interface, which allows legally binding financial transaction to be performed on terminals or through desktop software, on closed networks or over secure Internet connections.

Key Terminology

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FX Transaction Execution Process: High-Level Process

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The FX Transaction Execution process comprises of three key steps:

Review FX exposure and requirement

Perform required

FX transactions

Confirm and settle transactions


Review FOREX Exposure

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The process begins with the review of FX requirements of missions and OAHs and any FX exposures to determine which currencies need to be purchased or sold.

As Umoja will allow for aggregation of FX requirements, it will lead to better forecasting of FX requirements and significant savings in transaction costs.

Review FOREX exposure and requirement

Perform spot transactions

Confirm and settle the process

Note: The investment portfolio will be marked-to-market twice a year (June & December). This will be done at the portfolio level (UNHQ Treasury), with allocations to portfolio participants.


Perform Spot Transactions

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Once the FX transaction requirements have been determined, the investment officer may perform the FX trade in the spot or forward market, depending on the requirement. Both spot and forward FX transactions are performed in FXAll, the FX trading platform used by UNHQ Treasury. Once the FX trade is performed, the trade details are re-entered in Umoja for settlement and accounting purposes.

Review FOREX exposure




Confirm & Settle the Process

75

After the transaction has been entered in Umoja by the trader, the settlement officer must perform the following steps to complete the trade.

1. Process the transaction and calculate the required cash flows 2. Confirm the trade with counterparty. If there are discrepancy then send the trade

back to the investment officer 3. Review the standard settlement instruction for the counterparty and generate SWIFT

message for payment to the counterparty 4. Post the trade, which updates the liquidity forecast and related cash flow information

Review FOREX exposure





Which of the following types of transactions are performed in FXAll?

Select the correct option.

A. Spot transactions

B. Forward Transactions

C. All of the above

D. None of the above

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Which of the following types of transactions are performed in FXAll?

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Option C is the correct answer. Both spot and forward transactions are performed in FXAll.

Select the correct option.

A. Spot transactions

B. Forward Transactions

C. All of the above

D. None of the above


Module 2 Summary

The key points covered in this module are listed below:

The FX Transaction process involves reviewing FX requirements and exposure, executing spot and forward transactions and confirming and settling the trade

While FX trades are performed in FXAll, they are also recorded in Umoja for accounting and settlement purposes. The settlement process brings the FX trade to closure by making the required payment to the FX counterparty

Investment officers may meet FX requirements by trading in the spot or forwards market

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Agenda

79

Course Introduction





Course Summary

Course Assessment

Course Survey



Module 3 Objectives


Generate, review and post accounting entries for cash flows related to maturities, redemptions, coupon and other interest income received






Investment Accounting: Daily Process

81

On a daily basis, four key activities need to be performed for accounting purposes:

1) Run TPM44 to account for Interest Accrual

2) Run TPM1 to account for amortization of premium and discounts

3) Update reference rates for Variable Rate Bonds (floating rate securities). The rates must be updated on the rate fix date. Until the Umoja Bloomberg interface is in place, this step will be done manually via OB83

4) Run ADB to distribute investment income and expense to the investment pool participants

Activities 1 and 2 are run automatically as part of a nightly batch job. Activities 3 and 4 are conducted manually. These daily processes are run for all three portfolios, but can be run for individual securities or portfolio if needed.

In this module, we review the process followed to recognize the receipt and posting of a coupon. We then walk through the process followed to complete each of the four daily activities in Umoja.


Process Interest Accruals/Deferrals

In order for interest accruals and deferrals to be calculated, all incoming coupons must be recognized and posted in Umoja.

Incoming coupons are recognized using a 2-step process:

This process is reviewed in detail over the next four slides.

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Recognize Receipt of

coupon

Post incoming coupons



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Recognize receipt of coupon:

Step 1: Access the Manual Debit Position Screen: Enter FWZE in the Command field

Click the Enter icon The Manual Debit Position screen appears. Step 2: Enter the appropriate information: Company Code ID Number Securities Account Settlement Currency Step 3: Press the Enter key

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The Manual Debit Positions appear. Step 4: Review the data generated and modify as needed Step 5: Click the Post business transaction button



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Post incoming coupons: Now that the coupon received has been recognized in Umoja, it can be posted. Step 1: Access the Securities Automatic Debit Position screen: Enter FWSO in the Command field Click the Enter icon

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The Securities: Automatic Debit Position screen appears. Step 2: Enter the following information: Company Code Product Type ID Number* Securities Account* Up to and including due

Date* Document Date* Step 3: Click the Execute

icon

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Note: Fields marked with a * are automatically populated based on the information entered when the coupon was recognized


Process Planned Interest, Dividend & Coupon Flows

Step 1: Run TPM44 to access Execute Accrual/Deferral of Expenses and Revenues screen

Step 2: Enter the following information: Company Code ID Number Securities Account Accrual/Deferral Key Date (must match purchase date)

Step 3: Select the Test Run checkbox Step 4: Click the Execute icon

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Note: A test run should be performed first to confirm that the postings are correct


Process Planned Interest, Dividend & Coupon Flows

Step 5: Review the information for accuracy, then click the Back icon, uncheck the Test Run box and click the Execute icon

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Process Amortization of Premiums & Accounts

TPM1 is run daily to process amortization of premiums and accounts also updates money market changes and FOREX changes

Step 1: Access the page:

Enter TPM1 in the Command field

Click the Enter icon

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The Execute Valuation screen appears.

Step 2: Enter the key date for valuation


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Note: A test run should be conducted first to confirm that the information is correct



The Valuation Log appears displaying the daily amortization.

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Process Interest Rate fixing for Floating Rate Instruments

Reference rates for Variable Rate Bonds (VRBs) are recorded using T-code OB83.

Step 1: Access the Change View Reference Interest Rate Values Overview screen: Enter OB83 in the Command field Click the Enter icon

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The Change View Reference Interest Rate Values Overview screen appears. The rates should be entered on rate fixing dates, which are normally two days before the value date. If there is a market data feed to Umoja then the rates would be updated automatically as needed. Step 2: Click the New Entries button

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The New Entries: Overview of Added Entries screen appears. Step 3: Enter the following information: Reference Description Valid from (fixing date) Interest rate Step 4: Click the Save icon

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d

e

f

c d e f


Process Net Revenue Allocation to Investment Fund Participants

FMADB_post is used to distribute income and expenses to the investment pool participants. The distribution can be run daily; however, initially it will be run once a month but run thirty times to capture daily balances.

As with all SAP processes, ADB can be run in test mode prior to posting the distribution. If any revenue or expense posting document is reversed then ADB_POST should be re-run for that date to account for the change.

Instead of accruing interest daily and capitalizing every six months, interest will be distributed on a daily basis based on daily balance.

Lets walk through this process in Umoja.

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Step 1: Access the Weighted Balance Distribution screen:

Enter FMADB_POST in the Command field

Click the Enter icon

The Enter ADB ID pop-up box appears.

Step 2: Enter the appropriate ADB rule and press the Enter key.

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a

b

a b



The Weighted Balance Distribution screen appears. The ADB Rule is populated based on the selection in the ADB pop-up box.

Step 3: Enter the From and To dates to define the Calculation Period

Step 4: Select Call account derivation

Step 5: Select the Test Run checkbox


The Weighted Balance Distribution appears.

Investment updates to the General Ledger occur automatically as other T-codes are run.

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Note: Calculation periods should be run one day at a time, not over extended duration.


Investment Portfolio Reconciliations

The asset reconciliation process will be automated in Umoja. MT-535 from the custodian would be uploaded into Umoja to compare the asset position in Umoja to that recognized by the custodian. After the comparison is run, a status e-mail will be sent to the back office staff nightly. If there are any failures, action must be taken immediately.

Similarly, when Bloomberg to Umoja interface is in place, positions in the two systems will also be reconciled.

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Module 3 Summary

Now that you have completed this module, you can:

Generate, review and post accounting entries for cash flows related to maturities, redemptions, coupon and other interest income received




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Agenda

100

Course Introduction





Course Summary

Course Assessment

Course Survey



Module 4 Objectives

After completing this course, you will be able to:

Run the Investment Accounting Period-End Process



Investment Accounting: Period-End Process

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The Investment Accounting Period-End process is comprised of two key activities:

Lets review the process followed to load market prices into Umoja.

1. Load market prices into Umoja

2. Confirm that all daily processes have been successfully run


Investment Accounting: Period-End Process

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To upload market prices:

Launch T-code TBEX.

Click the Spreadsheet tab

Click the new box

Copy and paste the rates as below


Module 4 Summary

Now that you have completed this module, you can:

Run the Investment Accounting Period-End Process

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Agenda

105

Course Introduction





Course Summary

Course Assessment

Course Survey



Course Summary

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Now that you have completed the course, you can:

Explain the roles and responsibilities involved in the Investment Accounting processes

Review FOREX Exposure and perform spot transactions



Enter and approve Investment Transactions into Umoja and post derived flows







Agenda

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Course Introduction





Course Summary

Course Assessment

Course Survey



Course Assessment

Now that you have completed all the modules in this course, you can test your knowledge by completing the Course Assessment.

To receive credit for completing this course, you must pass this assessment with a minimum score of 90%.

To complete the assessment you must return to the Learning Management System:

1. Log into Inspira

2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning

3. Search for the name of the course under the My Learning Activities section

4. Click the Start link of the course assessment

5. Click the Submit button once you have completed the assessment

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Agenda

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Course Introduction





Course Summary

Course Assessment

Course Survey



Course Survey

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Your feedback is important to the continuous improvement of our training program.

Please complete the evaluation for this course using the following steps:

1. Log into Inspira

2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning

3. Search for the name of the course under the My Learning Activities section

4. Click the Start link of the course survey

5. Click the Submit button once you have completed the course survey


Congratulations! You have successfully completed the

Investment Accounting course.

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fi331 investment accounting v9 rfp

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