JP2011204253A - Conversion engine and financial reporting system using the same - Google Patents

Abstract

PROBLEM TO BE SOLVED: To provide a financial reporting system for adjusting a difference among different GAAPs in various countries, and to provide a method.SOLUTION: A computerized management system is provided. The system includes a routine for accessing journal entries stored in a memory and an automated journal entry generating routine for generating journal entries for a first set-of-books and for a second set-of-books based on the accessed journal entries. The journal entries for the first set-of-books are in accordance with a first reporting standard and the journal entries for the second set-of-books are in accordance with a second and different reporting standard.

Description

(Related application)
This application is based on US Provisional Patent Application No. 60/171, filed Dec. 16, 1999.
, 097 and claims priority in the United States. The entire contents of US Provisional Patent Application No. 60 / 171,097 are incorporated herein by reference.

(Technical field to which the invention belongs)
The present invention relates generally to financial reporting systems and methods, and more particularly to financial reporting systems and methods for creating financial statements for different reporting criteria.

A financial reporting system for a company is generally composed of a plurality of applications. For banks, these applications include a general ledger application and a loan processing application. These applications create financial statements in accordance with reasonable generally accepted accounting principles (GAAP). GAAP refers to a set of rules, agreements, standards, and procedures for reporting financial information. For example, the US GAAP has a Financial Accounting Standards Board (
FASB).

In general, there are differences between GAAP in different countries. Given that many companies operate in a multinational environment, it is desirable to provide a financial reporting system and method that adjusts for differences between different GAAPs in different countries.

According to one aspect of the present invention, a computer-implemented routine for a management system to access journal entries stored in computer-readable memory;
And a computer-implemented journal entry creation routine that automatically creates journal entries for the first set of books and the second set of books based on the accessed journal entries. The journal entry for the first set of books follows a first reporting standard, and the journal entry for the second set of books follows a different second reporting standard.

The management systems and methods described herein provide a single workflow that can be applied to convert an initially completed book in one accounting system to another report book in a different accounting system. . This system and method allows a user to establish accounting methods for various items according to, for example, GAAP of any country. For example, the management systems and methods described herein provide an automatic conversion engine for loan transactions. The conversion engine processes a transaction from a lending application and applies a set of rules that automatically create journal entries that adjust for differences between US GAAP and Japan (JP) GAAP. For example, US GAA
Under P, the non-refundable fees associated with the term loan agreement are deferred and amortized over the term of the loan. Under JP GAAP, such fees are treated as immediate income. When the processing for the payment of the prepayment fee is entered into the US GAAP commercial lending application, the commercial lending application creates an entry to defer and amortize the fee. When the conversion engine of the present invention detects these transactions, it cancels the deferral and treats the fee as revenue for JP GAAP. The conversion engine also cancels any subsequent amortization since this fee has already been recognized.

The conversion engine is configured to perform similar conversions for other differences between US and JP GAAP.

The accompanying drawings, which are incorporated in and constitute a part of this specification, illustrate various features of the present invention, and together with the foregoing general description and the following detailed description,
It is used to explain the principle of the present invention.

The system according to the present invention includes a routine for accessing a journal entry stored in memory and a first set of books and a second based on the accessed journal entry.
An automatic journal entry creation routine for creating a journal entry for a first set of books, wherein the journal entry for the first set of books is in accordance with a first reporting standard and the second book The journal entry for the set follows a different second reporting standard and thereby achieves the above objective.

The journal entry creation routine also creates a journal entry for a third set of books based on the accessed journal entry, the journal entry for the third set of books being the first and second reporting criteria. Adjustments due to differences between them may be included.

The journal entry stored in the memory is in accordance with the first reporting criteria, the journal entry creation routine including a conversion routine, and the journal entry stored in the memory is converted to the first reporting criteria. It may be converted from conformity to conformity to the second reporting criteria.

The conversion routine may select a journal entry stored in the memory based on one or more predetermined evaluation criteria.

The predetermined evaluation criterion may be selected from the group consisting of risk type, portfolio type, and account.

The first reporting standard may be a generally accepted accounting principle in the United States, and the second reporting standard may be a generally accepted accounting principle in Japan.

The journal entry stored in the memory may include an entry for a loan being sold.

The journal entry stored in the memory may include an entry for a loan being traded.

The journal entry stored in the memory may include an entry for a default loan.

The journal entry stored in the memory may include an entry for a prepaid loan fee.

The journal entry stored in the memory may include an entry for direct costs related to loan execution / approach.

The journal entry stored in the memory may include an entry for a contingent liability.

The journal entry stored in the memory may include an entry for a loan premium / discount offer.

The journal entry stored in the memory may include an entry for a provision for allowance for credit losses.

The journal entry stored in the memory may include an entry for a loan balance account.

The method according to the invention comprises accessing a previously stored journal entry;
Creating a journal entry for a first set of books and a second set of books based on the accessed journal entry, comprising a management method performed by a computer or with the assistance of a computer, The journal entry for the first set of books is in accordance with a first reporting standard, and the journal entry for the second set of books is in accordance with a different second reporting standard, thereby achieving the above objectives.

Further comprising creating a journal entry for a third set of books based on the journal entry stored in the memory, wherein the journal entry for the third set of books includes the first and second reporting criteria. Adjustments arising from differences between them may be included.

The first reporting standard may be a generally accepted accounting principle in the United States, and the second reporting standard may be a generally accepted accounting principle in Japan.

The journal entry stored in the memory may include an entry for a loan being sold.

The journal entry stored in the memory may include an entry for a loan that is being traded The journal entry stored in the memory may include an entry for a default loan The stored in the memory Journal entries may include entries for prepaid loan fees.

The journal entry stored in the memory may include an entry for direct costs related to loan execution / approach.

The journal entry stored in the memory may include an entry for a contingent liability.

The journal entry stored in the memory may include an entry for a loan premium / discount offer.

The journal entry stored in the memory may include an entry for a provision for allowance for credit losses.

The journal entry stored in the memory may include an entry for a loan balance account.

The present invention includes a computer readable medium having computer-executable instructions for performing the method of the present invention, whereby the above objective is accomplished.

The management systems and methods described herein provide a single workflow that can be applied to convert a book in one accounting system to another report book in a different accounting system. This system and method allows a user to establish accounting methods for various items according to, for example, GAAP of any country.
For example, the management systems and methods described herein provide an automatic conversion engine for loan transactions. The conversion engine processes a transaction from a lending application and applies a set of rules that automatically create journal entries that adjust for differences between US GAAP and Japan (JP) GAAP. For example, under US GAAP, non-refundable fees associated with periodic loan agreements are deferred and amortized over the term of the loan. Under JP GAAP, such fees are treated as immediate income. When the processing for the payment of the prepayment fee is entered into the US GAAP commercial lending application, the commercial lending application creates an entry to defer and amortize the fee. When the conversion engine of the present invention detects these transactions, it cancels the deferral and treats the fee as revenue for JP GAAP. The conversion engine also cancels any subsequent amortization since this fee has already been recognized.

1 is a simplified block diagram of a conversion system 10 according to the present invention. 1 is a diagram illustrating a general architecture of a financial reporting system 100 using a conversion engine according to an embodiment of the present invention. It is a flowchart regarding a conversion engine. FIG. 5 illustrates accounting and description flexfields. 1 illustrates a computer system 200 suitable for implementing a conversion system according to an embodiment of the present invention. It is a flowchart which shows the GAAP conversion with respect to a prepaid fee by the conversion engine. It is a flowchart which shows the preparation for conversion journal entry with respect to a prepaid fee. It is a flowchart which shows the program 1 for preparing conversion journal entry (sale) with respect to a prepaid fee. It is a flowchart which shows the program 2 for preparing the conversion journal entry (loss process) with respect to a prepaid fee. It is a flowchart which shows the program 3 for preparing the conversion journal entry (fee recognition) with respect to a prepaid fee. It is a flowchart which shows the GAAP conversion with respect to the loan currently put on sale and the trading loan. It is a flowchart which shows the GAAP conversion with respect to SBLC sold. It is a flowchart which shows the preparation of the conversion journal entry with respect to SBLC sold.

FIG. 1 is a simplified block diagram of a conversion system 10 according to the present invention. The conversion system 10 includes a conversion engine 12 supplied with the data record. These data records can be of various types including, but not limited to, records from commercial lending systems, deposit systems, treasury systems, trade finance systems, accounts payable systems, inventory systems, or accounts receivable systems. Each of these records includes one or more fields, and these fields are combined to form a record. For example, in the case of a record from a commercial lending system, the field is one or more fields (for example, business type identifier (domestic, international), branch identifier, department identifier, etc.) for specifying information related to the banking business that caused the record ) One or more fields to identify customer information related to the record (
For example, customer identifiers) and one or more fields (loans, standby credits, etc.) to specify the nature of the transaction.

The conversion engine 12 follows the rules stored in the rules database 14.
These data records are selectively processed. This process is selective in that the conversion engine validates one or more of the predetermined fields in the data record and determines whether there are rules in the rules database 14 for “converting” the data record. It is. The rules in the rules database 14 are data records that should take into account different processes for data stored in the data records due to different regulatory authorities, different taxing authorities, different statutory accounting requirements, different generally accepted accounting principles, etc. Is used to "convert".

For example, under US GAAP, non-repayable fees for term loan agreements are deferred and amortized over the loan term. Under JP GAAP, such fees are treated as immediate income. Applications used by US based financial institutions typically create data records for loan agreements where non-returnable fees are deferred and amortized. A data record for the payment of the prepayment fee is provided to the conversion engine 12. This data record, in which non-refundable fees are deferred and amortized, is converted through the conversion engine 12 into the US book set (SoB) 1
6-1. The conversion engine 12 stores this data record in JP SoB16-
2 and determine whether any rules in the rules database 14 are applicable to this data record. In this case, as described above, under JP GAAP, non-refundable fees related to the term loan agreement are treated as immediate income.
Therefore, there is a rule in the rules database 14 for canceling the deferral reflected in the corresponding data record in US SoB 16-1, and the fee is JP G
Treated as revenue for AAP. Conversion engine 12 also cancels any subsequent amortization since the fee has already been recognized. Therefore, the data record is JP
Write to JP SoB 16-2 according to GAAP.

The conversion engine 12 is also configured to create a data record for the adjustment SoB 16-3 that reflects the adjustment generated by the conversion engine 12.
Coordinating SoB 16-3 maintains the audit trail, the controller,
Simplify cumulative adjustments for subsequent inspections by auditors, inspectors, etc. US So
B16-1, JP SoB16-2, and Reconciliation SoB16-3 are combined to serve as the basis for financial reporting.

The conversion engine 12 can also be used without limitation to create data records for other SoBs, as suggested in FIG.

As described above, the conversion system 10 can be used with commercial lending systems, deposit systems, treasury systems, trade finance systems, accounts payable systems, inventory systems, or accounts receivable systems. The following is a detailed description of the conversion engine used in connection with the commercial lending system. This detailed description is made for illustrative purposes and is not intended to be limiting.

The conversion engine described below is typically provided as a component of a management system for a specific company such as a bank. The management system may include a variety of commercially available software applications and conversion engines, which are described herein (possibly using “middleware”) to interface with these other applications. Use data generated and output by other applications. The following description is given with reference to certain software applications (eg, commercial loans, general ledger) for performing certain functions. These software applications are identified for illustrative purposes and are not limiting. Accordingly, those skilled in the art will appreciate that the conversion engine of the present invention can be efficiently utilized with many different software applications that together comprise a management system for a particular enterprise.

In particular, the conversion engine described herein is an International Bu.
A commercial lending application known as LS2 (“LS2”) ™, jointly developed by siness Machines and Bankers Trust, also known as Loan IQ ™ or LIQ ™, and Ora
It is used with a general ledger application known as cle General Ledger ™ (“Oracle GL”) and a middleware application MQSI from Neon.

The general architecture of a management system 100 that includes a conversion engine according to one embodiment of the invention will be described with reference to FIG. 2A. Commercial commercial lending application 1
02 (such as the LS2 commercial loan application described above) creates a journal entry based on the transaction performed by the user. The commercial lending application 102 may have its own account record and place the journal entry in a table such as an Oracle GL-Out Table. For US based institutions, these journal entries typically conform to US GAAP. Journal entries that are accumulated in detail by accounts, transactions, and customers in the table are stored in the middleware application 106 (NEO described above).
N MQSI software, etc.) and sent to the interface table 108 of the general ledger application (eg, the above mentioned Oracle GL software). For example, LS2 commercial lending application and Oracle GL
In this particular case using the general ledger software, the conversion of data during journal entry by middleware 106 is probably from the LS2 GL account to the Oracle GL
It doesn't exist other than converting to an account number.

Each journal entry includes an accounting flexfield (AFF) and a description flexfield (DFF). In certain implementations,
The AFF is composed of a combination of a branch (business) number, a department identifier, a GL account number, and a supervisory branch number. Each journal entry has an AFF composed of these elements. DFF is context dependent, ie its elements depend on the type of journal entry. Each journal entry has a descriptive flexfield, but its elements vary based on the type of journal entry. D for journal entry of specific types
Examples of elements included in the FF include a risk type, a customer number type, a security ID, a product, and a portfolio. As described below, the portfolio plays the role of a conversion process.

When the batch entry to the journal entry interface 106 is complete, the automatic import procedure imports the journal entry into the US SoB 110. Imported journal entries are collected using a journal entry header. A journal entry under one journal entry header is a common business transaction code (business transaction code).
ion code), accounting (effective date), currency, and risk type. U
If generation of the journal entry header is successful in S SoB110, US SoB1
The entry is copied from 10 to JP SoB114. The conversion engine 108 then performs an analysis based on, for example, business transaction codes and / or portfolios,
Determine whether any rule affects the duplicated entry.

  The conversion engine 108 comprises the following logical functionality.

1. The selective conversion-conversion engine 108 screens journal entries to identify risk types,
Based on a portfolio type and / or a category such as an account, it is configured to select entries that are affected by the corporate rules described below. As used herein, “
“Selective conversion” includes the ability to bring adjustments only to the journal entry part.

2. The minimum / maximum logic-conversion engine 108 includes logic for determining the minimum or maximum value of an array. This logic is used to calculate the gain or loss in selling a loan with a premium or discount.

3. The cross-reference-conversion engine 108 is configured to look up the amount by referring to a table outside the conversion program. This is used for general ledger accounts that may have been changed to recalculate gains or losses due to GAAP differences.

As described above, after the US GAAP-based journal entry is replicated in JP SoB 114, conversion engine 108 converts the conversion journal 1 into the replicated journal entry.
Determine if any rule in the rule database associated with 08 is applicable. In one implementation, these rules are organized into two database tables: an exclusion rule table and a reclassification rule table. The exclusion rule in the exclusion rule table cancels the journal entry, i.e. excludes the journal entry from the target book set, and the reclassification rule in the reclassification table contains items in the AFF (e.g.
GL account) is changed or replaced. If there are rules in the rules database that are applicable to the duplicate journal entry, the conversion engine 108 applies these rules, so
The journal entry in JP SoB 114 follows JP GAAP. The conversion engine 108 also generates an appropriate journal entry for the adjustment SoB 112. Adjustment SoB112
Maintains audit trails and simplifies cumulative adjustments for subsequent inspections by supervisors, auditors, inspectors, etc. Reconciliation SoB 112 is a comprehensive audit that records transactions affected by expense code, portfolio, risk type, transaction reference number, pre-conversion and post-conversion deduction accounts, and the purpose of the adjustment (eg, canceling deferred prepaid fees) Further supplementation is provided by tracking conversion reports. US SoB110, JP
The SoB 114, the reconciliation SoB 112, and the audit tracking report are combined to serve as the basis for financial reporting.

In order to reconcile transactions that cannot be covered by the conversion rules in the conversion database associated with the conversion engine 108, certain manual journal entries are adjusted soB 112 and JP So
Can be delivered to B114. Manual journal entry is performed by building an interface that allows the user to selectively hand over entries to a specific SoB.

Accordingly, the conversion engine 108 selectively applies the conversion logic to provide a plurality of different S
It is a rule-compliant engine that automates the creation of journal entries for oB. The conversion engine is a single flow process that can operate while the data record is being processed. That is, the conversion engine always applies the appropriate rules from the rule database whenever it detects a data record having a particular property.

The conversion engine 108 may be implemented using an Oracle Workflow ™. Oracle Workflow allows users to define and automate enterprise processes, where each business process consists of a series of activities and is inter-activity dependent. Oracle Workflow Builder is a tool that allows the user to create, observe and / or modify enterprise processes with mouse movements. The Oracle Workflow Engine observes the state of the workflow and coordinates the route assignment of activities to the process. “Activity” in the process definition is an automatic function defined by the PL / SQL storage procedure,
It can be a notification to the user (which optionally requests a response) or a subflow that itself breaks down into a smaller set of activities. A workflow process is invoked when an application calls a set of Oracle Workflow Engine APIs (Application Programming Interfaces).
Oracle Workflow Engine divides the appropriate work items defined by the application through the definition of a specific workflow process. According to the workflow process definition, the Workflow Engine executes an automatic process and calls an appropriate agent when external processing is required. The following detailed description is provided by those skilled in the art (eg, Oracle Workflow Build)
It is possible to create an enterprise process for implementing the conversion engine according to the invention (using der).

  The LS2 commercial lending application can run on the IBM3272.

Oracle FINANCIAL STATEMENT GENERATO
r (trademark) is a report creation tool that allows a user to develop various reports without programming. This tool is an Oracle database (e.g., running on IBM RS6000 / SP by the AIX operating system)
Version 8.05). This tool presents current financial information by reclassifying and grouping applicable accounts, for example, and handling GAAP conversion items that do not require computation, such as presenting certain balance sheet items. Can be used.

Finally, NEON ™ MQSI software can be used as a middleware tool to provide a data interface between various applications. NEON software is an IBM operating system based on the IBM operating system.
On the Oracle database executed by RS600 / SP (for example, Ver.
sion 8.05). For the purpose of GAAP conversion, this middleware verifies the integrity of the data required for the conversion and sends a given LS2-specific data value to Ora.
Translate to cle GL value. This middleware application includes an important part of daily data posting and data matching during the GAAP conversion process. The purpose of matching using middleware tools has two aspects. (1) From LS2 to US GAAP, no data manipulation is required (the main purpose is to confirm the completeness and accuracy of the data). (2) From LS2 to JP GAAP, an applicable conversion procedure is executed.

FIG. 2B shows a system flow chart for the conversion engine 108. The batch file 120 of cumulative journal entries is sent to the interface table 106 of the general ledger application (such as Oracle GL software) via the middleware application 104 (FIG. 2A). Within Oracle GL, an event alert is triggered whenever any data for a US or JP SoB ID is inserted or updated (122). The trigger is based on the data in the interface table 106 and the journal import routine 124 that batches directly to the appropriate SoB (ie US SoB 110, Adjustment SoB 112,
Or, call JP SoB 114). This program imports journals and batches into the GL_INTERFACE table for the appropriate SoB based on the appropriate arguments.

If a new journal header is generated in US SoB110, an alert is 12
Triggered at 6. This alert configures the conversion engine 108 and 12
Trigger the PL / SQL package that processes 8 and replicate the entry in US SoB 110 for JP SoB 114.

The Oracle table used in the conversion engine 108 is as follows.

GL_INTERFACES This table is an interface table to Oracle GL loaded with different data: different SoB, debit and credit amounts, GL accounts, specific journal entry line information, and source. It is.

GL_JE_BATCHES
GL_JE_HEADERS
GL_JE_LINES
GL_JE_CATEGORIES
GL_JE_SOURCES
GL_JE_BATCHES, GL_JE_HEADERS, GL_JE_L
INS, GL_JE_CATEGORIES, and GL_JE_SOURCE
The ES is used to obtain batch / header / line / source / category details of a batch.

The conversion engine 108 refers to the custom table 130 (SUMI_RUL
E_ADJUSTMENTS) evaluates whether the next replicated entry is processed differently under US GAAP and JP GAAP (128).
The table 130 stores adjustment names, rule types, and other segment values. The conversion engine 108 uses the data in this table and the journal entry category is US.
Check if it is processed differently under GAAP and JP GAAP. If a journal entry category exists in the table 130, there is a different process between US GAAP and JP GAAP. The conversion engine 108 determines at 132 whether this different process is based on an exclusion rule, or 134, whether it is based on a reclassification rule, and prepares an appropriate conversion entry.

The SUMI_RULE_EXCLUSIONS table 136 is a JP GAA
Includes journal entry categories that need to be removed or canceled under P. This table stores an exclusion rule number, an exclusion rule name, and an exclusion flag. Using the data in table 136, the journal entry copied in JP SoB 114 is 13
8 is adjusted for JP GAAP and an appropriate journal entry is generated in Adjustment SoB 112.

The SUMI_RULE_RECLASS table 140 includes journal entry categories that need to be reclassified between GL accounts. This table contains rule numbers, reclassification codes,
Includes cancel flag and other segments. The table 140 also includes an adjustment flag that is omitted based on the journal entry category using the exclusion flag. This table is used together with a table 142 called SUMI_NAT_ACCT. The SUMI_NAT_ACCT table 142 includes a SUMI_RULE_
Used in conjunction with the RECASS table 140 to include accounts that have been replaced by reclassification rules. This table contains the “source” specific account segment and the “target”
(Adjustment) Includes unique account segment, HO code segment, and branch code segment.

The journal entry category of the copied journal entry is SUMI_RULE_RECLAS
If present in S, there are different treatments in US and JP GAAP. If a journal entry category is found, the conversion engine 108 evaluates the SUMI_NAT_ACCT table 142 against the corresponding adjustment account and an adjustment is performed at 114. Both of these tables show the GL account used in the original entry.
Used to remap to a different account in P SoB 114.

The packages used are WF_ENGINE, WF_CORE, FND_G
LOBAL and FND_REQUEST. WF_ENGINE is WF
Use _ENGINE_Get_Item_Attribute_Number to get the appropriate batch attributes for the batch being processed, and use other procedures in the package to get the batch characteristics. WF_CORE is used for context details, F
ND_GLOBAL is used to initialize the import program parameters, and FND_REQUEST is used to submit the import program from the operating system (OS) level.

The Oracle GL account chart contains two components. Account caption (horizontal) and key segment (vertical). These key segments within the Oracle application are called "flexfields". As described above, there are two types of flexfields. An accounting flexfield (required) and a description flexfield (optional). It is a minimum requirement to define the flexfield format prior to implementation. Neither accounting nor descriptive flexfields are generally easy to modify after implementation, so it is very important to design them with great care and considering future needs. The identification of each accounting and descriptive flexfield is described with reference to FIG. 1C. Unless otherwise specified, all fields are alphanumeric. Any relationships suggested in FIG. 1C are for purposes of illustration and not limitation.

(Accounting flexfield)
A. IBF / DBF operations In the United States, this field serves to specify national or international banking operations.
The default value specifies the country. In other countries, segments may be revoked to display different market jurisdictions under applicable requirements. N / A (not applicable)
A predetermined code string (eg, 00) may be used to indicate.
B. Department This is also known as the cost / profit-centric code. Each subdivision has an assigned department code. The first symbol indicates a department group, and the remaining two symbols indicate unique department codes.
C. GL Account D. Supervisory Branch This field represents the branch that claims ownership of the balance account or transaction recorded in Oracle GL.

(Description flexfield)
E. Product Code This field is useful for reporting purposes such as GAAP conversion objectives and profit margins. Accounts are grouped by product type, and a value is assigned to each of the accounts.
F. Portfolio Code This field is used for reporting the purpose of GAAP conversion and profit rate as well as the product code.
G. Customer number H. Transaction reference number VAT identifier This field serves to provide VAT calculation requirements in VAT jurisdiction.

(LS2)
J. et al. Customer ID
K. Entry text code Expenditure code M.M. Account No. N. Risk type Portfolio type Security ID
In addition to the above fields, the conversion engine 108 uses the following data components in the LS2 GL entry table:

GLE_CDE_BUS_TRAN Business transaction related to this transaction This field is placed in the category ID field of the Journal GL journal import table.

The stored PL / SQL based procedure provides a framework for the conversion engine 108 to perform the conversion. These storage procedures are described in Oracle (R) Wo.
It can be implemented in any suitable computing environment, such as an environment running rkflow ™. FIG. 3 illustrates a computer system 200 suitable for use in combination with a conversion engine. The computer system 200 includes a processing device 203 and a system memory 205. A system bus 207 is connected to a system memory 205.
The various system components including are coupled to the processing unit 203. System bus 20
7 may be any type of bus structure including a memory bus or memory controller, a peripheral bus, and a local bus using any of a variety of bus architectures. The system memory 205 includes read only memory (ROM) 252 and random access memory (RAM) 254. For example, a basic input / output system (BIOS) 256 including basic routines useful for transferring information between elements in the personal computer system 200 at the time of startup or the like is stored in the ROM 252. Computer system 200 further includes various drives and associated computer readable media. The hard disk drive 209 reads and writes to a (typically fixed) magnetic hard disk 211, and the magnetic disk drive 213 reads and writes to a removable “floppy” or other magnetic disk 215. The optical disk drive 217 reads from a removable optical disk 219, such as a CD-ROM or other optical disk, and in some configurations also writes to the optical disk 219.

The hard disk drive 209, the magnetic disk drive 213, and the optical disk drive 217 are each a hard disk drive interface 2
21, the magnetic disk drive interface 223, and the optical drive interface 225 are connected to the system bus 207. The drive and associated computer readable media provide computer readable instructions, SQL based procedures, data structures, program modules, and other data non-volatile storage for the computer system 200. In other configurations, other types of computer readable media that store data accessible by the computer (eg, magnetic cassette, flash memory card, digital video disk, Bernoulli cartridge, random access memory (RAM), read only memory ( ROM) etc. may also be used.

A number of program modules are stored on the hard disk 211, removable magnetic disk 215, optical disk 219, and / or system memory 205.
It can be stored in the ROM 252 and / or the RAM 254 within. Such program modules may include graphics and sound APIs, one or more application programs, other program modules, and an operating system that provides program data. A user may enter commands and information into the computer system 200 through input devices such as a keyboard 227 and pointing device 229. Other input devices include microphones, joysticks, game controllers, satellite receivers, scanners, and the like. These or other input devices are often connected to the processing unit 203 via a serial port interface 231 coupled to the system bus 207, although a parallel port interface or universal serial bus (U
It may be connected via another interface such as SB). System bus 20
7 is connected to a monitor 223 via an interface such as a video adapter 235.
Or other types of display devices are also connected.

Computer system 200 may also include a modem 254 or other means for establishing communications over wide area network 252 such as the Internet. The modem 254 can be internal or external, and the serial port interface 2
31 is connected to the system bus 207 via A network interface 256 may also be provided so that the computer system 200 can communicate with the remote computing device 250 via the local area network 258 (or such communication may be a wide area network 252 or other communication path such as dial-up, or Via other communication means). Computer system 200 typically includes other peripheral output devices such as printers and other standard peripherals.

The GAAP transformation can be considered as taking one of three different types. The first type includes reclassification. The second type involves more complex transformation calculations. The third type includes manual adjustment of journal entries. Referring to the software application described above, the first type of GAAP transformation may be performed using an Oracle financial statement generator, and the second type of GAAP transformation may be performed using an Oracl.
Can be implemented using e-alert and Oracle workflows. Oracl
Both e or Oracle alerts and Oracle workflows
Manual adjustments can be utilized when impractical due to complexity, importance, or frequency of transactions. In such cases, the cost of building an automated procedure can far exceed its expected benefits.

The following table outlines each type, individual description, and example transaction for each proposed method.

A more detailed description of these exemplary loan processing application transactions and methods is provided below.

(I. Prepaid loan fee)
US GAAP
Financial Accounting Standard No. 91, “Accounting for Non-Returnable Fees and Costs for Executing or Acquiring Loans and Direct Costs for Initial Loans” (SFAS No.
1 ") establishes accounting for non-refundable fees and costs associated with a loan, committed to a loan, or for the purchase of a single loan or group of loans. Such non-refundable (prepaid) loan fees, especially commitment fees and syndicated fees, should be deferred and recognized as interest or fee income over the term of the loan or business. SFA
Under S91, the interest method is the preferred method, but the flat rate method is also appropriate due to its non-importance.
JP GAAP
Prepaid loan fees when related services are provided (usually when received)
Is considered commission income. The deferral or amortization of these fees is not recorded as a yield adjustment.

There are two types of fee-related transactions that affect the method of GAAP conversion. That is, (1
A loan executed or purchased at face value, (2) discounted or premium. For the purpose of loan processing GAAP conversion, the loan of type (1) (issued at face value) is the object of adjustment. The discount or premium accounting for the loan is substantially the same under US GAAP and JP GAAP and does not require further calculation or reclassification.

Codes can be used to distinguish loans issued at face value from discounted or premium loans. For example, when a LS2 loan processing application is used, a “portfolio code” may be used to distinguish. “LOANPAR” can be used for loans issued at face value, and “DISCPREM” can be used for loans issued at a discount or premium.

(A1. Problem 1)
The LS2 commercial lending application calculates amortization of prepaid loan fees based on a straight-line method.

(A2. Solution / conversion 1)
The straight-line method is used as an amortization method because the difference from the interest rate method is not important.

(B1. Problem 2)
The LS2 commercial lending application allows the user to defer and amortize prepaid fees or fee income as an adjustment to yield in accordance with FASB Standard 91. Therefore, for JP GAAP reporting purposes, the deferral or amortization should be canceled and adjusted to the fee income when received.

In addition, the LS2 commercial lending application uses the “price difference” of the loan as an equity discount or equity premium (difference between principal amount and actual price for loan execution or purchase), along with deferred upfront fee income. As deferred and amortized. This accounting is consistent with US GAAP. Even under JP GAAP, the price difference should be deferred and amortized as interest over the loan term.

Under normal practice, the relationship between prepaid fees and loan execution and purchase prices is as follows:
(1) Normal loan execution ● Prepaid fee = paid ● Execution price = face value (2) Regular loan purchase ● Prepaid fee = paid ● Purchase price = face value (3) Investment loan ● Prepaid fee = not paid ● Purchase price = discounted price (4) Private placement bonds ● Prepaid commission = not paid ● Purchase price = discount or premium price For (1) and (2), equity discount or premium calculated by LS2 commercial lending application The equity account represents a “prepaid fee” that should be immediately considered revenue under JP GAAP. On the other hand, in the case of (3) and (4), L
The equity discount or equity premium account calculated by the S2 commercial lending application represents the price difference that should be deferred and amortized as revenue for both JP GAAP and US GAAP.

(B2. Solution / Conversion 2)
(Outline of journal entry conversion)
Loan transactions are classified into first and second transaction types. These two transaction types represent two different “portfolios” within the LS2 commercial lending application.
And the user selects one of them based on the transaction information. Or
In the acre GL interface table 106, the LS2 “portfolio” commercial loan application is captured as the “portfolio type” in the description flexfield. The first transaction type is loan execution / purchase at face value = (normal loan execution and normal loan purchase) = portfolio code “LOANPAR”. The second type of transaction is: discount / premium loan / purchase = (investment loans and private placements) = portfolio code "DIS
CPREM ". The accounting for the second transaction type (portfolio) is JP
Both GAAP and US GAAP agree. Thus, if the conversion engine 108 receives a US GAAP journal entry related to the second transaction type, the adjustment SoB
No journal entry is created for 112, US GAAP journal entry is the corresponding JP GA
Submitted to JP SoB 114 as AP journal entry.

However, the first transaction type (portfolio) equity discounts and equity premiums (including consolidation fees and temporary borrowing discounts) are deferred prepayment to be credited as revenue when received under JP GAAP. Represents a fee.
Thus, if conversion engine 108 receives a US GAAP journal entry associated with the first transaction type, conversion engine 108 generates a journal entry for adjustment SoB 112. The conversion engine 108 combines the US GAAP journal entry and the GAAP adjustment journal entry to create an appropriate JP GAAP journal entry.

More specifically, the US GAA created by the LS2 commercial lending application
P journal entry is entered with Orac along with "Business Transaction Code" and "Portfolio"
It is submitted to the conversion engine 108 via the le GL interface table 106. If conversion engine 108 receives a journal entry for portfolio code “Loan Execution / Purchase at Face Value (LOANPAR)”, it prepares the following GAAP conversion journal entry for the following “business transaction code”, and US GAAP journal entry: Convert entries to JP GAAP journal entries.

(1. Prepaid loan fee (business transaction code = UFFBR, CPSDC) receipt)
The US GAAP journal entry for the LS2 commercial lending application temporarily records the prepaid loan fee received for operations at the syndicate as a “waiting for consolidation (FHAD)” until the syndication is complete. JP
For GAAP reporting purposes, prepaid fees are credited to the fee income account “Prepaid Loan Fee Income” when received.

(A) Conversion journal entry)
The conversion engine 108 prepares a conversion journal entry for the adjustment SoB 112, credits the amount of the prepaid fee received to “Prepaid Loan Fee Revenue”, and borrows this amount to the “Pending Order Fee (FHAD)” on the date of receipt. I will write. Separate “prepayment fee income” accounts are created for bills, loans, and other products. This journal entry is prepared by a “prepaid fee conversion program 3 (fee recognition)” to be described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GA for JP SoB 114.
Prepare AP journal entry. Even if a reversal entry for error correction or cancellation is received in connection with this business event, the GAAP conversion can be processed by the same logic and conversion engine.

(2. Distribution to participating lenders (paid to the borrower / seller))
(Business transaction code = EFPFH, CPSDC)
The US GAAP journal entry for LS2's commercial lending application shows the amount distributed to participating lenders (or paid to the borrower / seller) as "pending status fee (F
HAD) ”. For JP GAAP reporting purposes, the amount paid is credited to the fee income account “Prepaid Loan Fee Income” when paid.

(A) Conversion journal entry)
The conversion engine 108 prepares a conversion journal entry for the adjustment SoB 112, debits the prepaid fee distributed to the participating lenders to “Prepaid Loan Fee Revenue”, and pays this amount to the “Reservation Waiting State Fee (FHAD)” on the date of payment. To lend to. As with the receipt of a prepayment fee, the appropriate “Prepaid Fee Revenue Account” indicates the type of loan (bills, bills,
Should be used on the basis of securities). This journal entry is prepared by a “prepaid fee conversion program 3 (fee recognition)” to be described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. Even if a reversal entry for error correction or cancellation is received in connection with this business event, the GAAP conversion can be processed by the same logic and conversion engine.

(3. Discount setting (deferred prepaid loan fee) (business transaction code = BKRM
D))
When the syndicated is closed, the host bank distribution of the prepayment fee is determined,
With the LS2 commercial lending application, an equity discount (premium) account, ie
Transferred to “Equity Discount (DISC)”, “Equity Premium (PRMUM)” or “Temporary Debt (UNFDS)”. For JP GAAP reporting purposes, this amount has already been recognized as revenue and the transfer entry should be cancelled.

(A) Conversion journal entry)
The conversion engine 108 prepares a conversion journal entry for the adjustment SoB 112, debits the transfer amount to “Equity Discount (DISC)” or “Temporary Debt (UNFDS)”, and sets the amount as “Stage Waiting for Reorganization (FHAD)”. To lend to. In the case of premium equity, the amount is equal to “equity premium (PRMUM)” or “temporary borrowing (UN).
FDS) ”and is borrowed to“ Federalization commission (FHAD) ”. This journal entry is prepared by a “prepaid fee conversion program 3 (fee recognition)” to be described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. In this case, the conversion journal entry offsets the US GAAP journal entry and no journal entry is passed to JP SoB 114. Even if a reversal entry for error correction or cancellation is received in connection with this business event, GA
AP conversion can be handled by the same logic and conversion engine.

(4. Syndication complete (business transaction code = CBUY, CCAN, CSEL
))
Under US GAAP, when the syndicated is closed, the remainder of the “waiting for consolidation (FHAD)” after being distributed to participating lenders and transferred to the discount account is the “syndicated fee (SYNFM)” ". However, for JP GAAP reporting purposes, prepaid loan fees are already recognized as revenue. Therefore, US GAAP journal entries should be canceled.

(A) Conversion journal entry)
The conversion engine 108 prepares a conversion journal entry for the adjustment SoB 112 and “
The US GAAP entry regarding the recognition of prepaid fees remaining in the “Syndicated Fee (SYNFM)” and “Reservation Waiting State Fee (FHAD)” is deducted in the “Syndicated Fee (SYNFM)”, and the “Reservation Waiting State Fee (FHAD)” ) "To cancel. This journal entry is prepared by a “prepaid fee conversion program 3 (fee recognition)” to be described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. In this case, the conversion journal entry offsets the US GAAP journal entry and no journal entry is passed to JP SoB 114. Even if a reversal entry for error correction or cancellation is received in connection with this business event, GA
AP conversion can be handled by the same logic and conversion engine.

(5. Equity discount and premium amortization (business transaction code = FAMRT, C
DECR))
The LS2 commercial lending application calculates the amortization calculated as “Equity Discount (DIS
C) ”,“ Equity Premium (PRMUM) ”or“ Temporary Borrowing Discount (UNFDS)
) ”And the amount is deducted from“ Appropriation Fee Revenue (ACOMF) ”or“ Interest Income −
Prepare a US GAAP journal entry for the amortization of the discount account by lending to "AINTI". For JP GAAP reporting purposes, prepaid loan fees are already recognized as revenue and amortization entries should be reversed.

(A) Conversion journal entry)
Conversion engine 108 prepares conversion journal entries for adjustment SoB 112 and cancels US GAAP journal entries for discount account amortization. In other words, it is debited to “Appropriation fee income (ACOMF)” or “Interest income-Execution fee (AINTI)”
Credit to “Equity Discount (DISC)” or “Temporary Borrowing Discount (UNFDS)”.
In the case of premium equity, the amount is “Equity Premium (PRMUM)” or “
Debited in “Temporary borrowing discount (UNFDS)” and “Appropriation fee income (ACOMF)”
Or it is credited to "Interest income-execution fee (AINTI)". This journal entry is prepared by a “prepaid fee conversion program 3 (fee recognition)” to be described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. In this case, the conversion journal entry offsets the US GAAP journal entry and no journal entry is passed to JP SoB 114. Even if a reversal entry for error correction or cancellation is received in connection with this business event, GA
AP conversion can be handled by the same logic and conversion engine.

(6) Transfer to the state of accrual of interest (business transaction code = DLTNA, OTNA
C))
If the loan is a nonperforming (interest-accounted) loan, “Equity Discount” and “
“Equity premium” is transferred to the related interest-bearing account, ie “Equity discount—accounting for interest” and “Equity premium—accounting for interest”. For JP GAAP purposes, discounts and premiums are already recognized as revenue. Therefore, the conversion engine 108 prepares the GAAP conversion journal entry and cancels the transfer entry.

(A) Conversion journal entry)
Conversion engine 108 prepares a conversion journal entry for Reconciliation SoB 112 and converts the US GAAP journal entry for the account transfer to the “Equity Discount (DISC) −
Credited to “Accrual of Interest” and credited to “Equity Discount (DISC) —Accrual of Interest” or “Equity Discount (DISC) —Accrual of Interest” and “Equity Premium (PRMUM)”
-Cancelled by debiting to “accounting for interest”.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. In this case, the conversion journal entry offsets the US GAAP journal entry and no journal entry is passed to JP SoB 114. Even if a reversal entry for error correction or cancellation is received in connection with this business event, GA
AP conversion can be handled by the same logic and conversion engine.

(7. Re-transfer to accrual status (business transaction code = DLTAC, OTAC
C))
If a nonperforming (non-accrual) loan is performed (accounting), the reclassification of the “Equity Discount” and “Equity Premium” from the non-accounting account to the accrual account is performed by the LS2 commercial lending application The For JP GAAP purposes, the original transfer entry (from interest accrual to interest accrual) is canceled,
Therefore, the conversion engine 108 prepares the adjustment journal entry and cancels the retransfer entry.

(A) Conversion journal entry)
The conversion engine 108 prepares a conversion journal entry for the adjustment SoB 112 and “
Equity Discount (DISC) – Accrued Interest and Lend to “Equity Discount (DISC) – Accrual of Interest” or “Equity Discount (DISC) – Accrual of Interest” and “Equity Premium (DREM) ) -Accrual of interest "
Cancel the GAAP journal entry. This journal entry is prepared by “prepaid fee conversion program 3 (fee recognition)” described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. In this case, the conversion journal entry offsets the US GAAP journal entry and no journal entry is passed to JP SoB 114. Even if a reversal entry for error correction or cancellation is received in connection with this business event, GA
AP conversion can be handled by the same logic and conversion engine.

(8. Loan sales (business transaction code = FSADJ, PLSAD)
When a loan is sold, under US GAAP, a non-amortized discount / premium account is placed and realized as an adjustment to “Gain on sale (GNOSL)” and “Loss on sale (LSOSL)” . Under JP GAAP, non-depreciated amounts are already recognized as income when received / paid. Therefore, "
US GAAP amount of “Gain on Sale (GNOSL)” is adjusted by the discount / premium non-amortization amount.

(A) Conversion journal entry)
The conversion engine 108 prepares conversion journal entries for the adjustment SoB 112 necessary to adjust gains and losses in sales with the discount / premium account amortization at the time of sale. For example, non-depreciable discount is “Gain on sale (GNOSL)
) ”Or“ Loss on sale (LSOSL) ”and“ Equity discount (
DISC) "or" Temporary Borrowing Discount (UNFDS) ". In the case of non-amortized premiums, the amount is credited to “Gain on sale (GNOSL)” or “Loss on sale (LSOSL)” and “Equity premium (PREMUU)”
M) ”or“ Temporary Borrowing Discount (UNFDS) ”. This journal entry is
Prepared by “prepaid commission conversion program 1 (sale)” to be described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. Even if a reversal entry for error correction or cancellation is received in connection with this business event, the GAAP conversion can be processed by the same logic and conversion engine.

(9. Loan loss processing (business transaction code = CHOFF))
Under US GAAP, the loss disposal amount of the loan may be applied to “Equity Discount (DISC)”, reducing the amount that the offset is deducted to “Loss Loss Processing Loss (ALLOW)”. In addition, “equity discount (PRMUM)” is already recognized as income (reverse income) when received (or paid). In addition, “Equity Discount (PR
MUM) ”is also processed as loss, and“ loss in loss processing (ALLO)
W) "is increased. However, for JP GAAP reporting purposes,
Commissions deferred as “Equity Discount (DISC)” or “Equity Premium (PRMUM)” are already recognized as revenue (reverse income) when paid, so the amount of premium and discount (“ Temporary borrowing discount (UNFD
S) ”) under“ JP GAAP ”,“ Loss of Loss Processing (ALLOW) ”
Should be adjusted.

(A) Conversion journal entry)
The conversion engine 108 prepares a conversion journal entry for the adjustment SoB 112 and “
Credit to “Discounted Equity (DISC)” or “Temporary Borrowing Discount (UNFDS)” and debit to “Loss on Loss Processing (ALLOW)”. For premium interests, entries are credited to “Equity Premium (PRMUM)” or “Temporary Borrowing Discount (UNFDS)” and credited to “Loss on Loss Processing (ALLOW)”. This journal entry is
Prepared by “prepaid fee conversion program 2 (loss process)” described later.

(B) JP GAAP journal entry)
The conversion engine 108 combines (nets) US GAAP journal entries and conversion journal entries into a JP GAA for JP SoB 114.
Prepare P journal entries. Even if a reversal entry for error correction or cancellation is received in connection with this business event, the GAAP conversion can be processed by the same logic and conversion engine.

(10. Other transactions)
The LS2 commercial lending application also generates prepaid fees for journal entries for other loan related transactions. These transactions are discounted, premium,
Temporary borrowing discounts and adjustments between related PL accounts or transactions between them. For JP GAAP purposes, all these entries regarding prepaid fees should be canceled. Therefore, for loan-related transactions for business transaction codes other than those described above, US GAAP journal entries should be converted to JP GAAP using Program 3 (Fee Recognition). The GAAP conversion can be processed by the same logic and conversion program even if a reversal entry for error correction or cancellation is received in connection with this business event.

  Table I shows a sample journal entry (Journal entry for prepaid loan fees).

(Other interface information)
Other interface information for the US SoB, such as “Generation Date”, “Accounting Date”, “Product Code”, “Customer Code”, etc., is submitted to the adjustment SoB 112 and JP SoB 114 without modification except for “Group ID”. Is done. The “group ID” for “US SoB” is “US GAAP”. This means that for the adjustment SoB and JP SoB, “Transform” and “JP GAA”
Is replaced by “P”.

FIG. 4 is a flowchart showing GAAP conversion by the conversion engine 108 for a prepaid fee. The conversion engine 108 checks the “portfolio” in the journal entry (ST302) and determines whether “portfolio” = “LOANPAR (ie,“ loan executed / purchased at face value ”). Otherwise, “
“Group ID” was changed to JP GAAP in ST306 and JP in ST308.
Exported to the SoB 114. If so, control is passed to ST304 where the conversion engine 108 checks the “business transaction code” of the LS2 commercial loan application (captured in the Oracle interface table 106 as “journal category”), which is , Whether it is a prepaid fee related code (such as those identified above or listed in FIG. 3). Otherwise, the journal entry is passed to JP SoB 114 via STs 306 and 308 as described above. If so, conversion journal entry is ST3
Prepared at 10. Details of preparation for conversion journal entry will be described later.

After the conversion journal entry is prepared, a JP GAAP journal entry is prepared at ST312 based on the US GAAP journal entry and the conversion journal entry. JP GAAP journal entries are netted out from the United States and conversion journal entries, and “Group ID”
Is prepared by changing to “JP GAAP”. JP GAAP journal entries are exported to JP SoB 114 in ST314. The conversion journal entry prepared in ST310 is exported to the adjustment SoB 112 in ST316.

FIG. 5 is a flowchart showing preparation for conversion journal entry for a prepaid fee. In ST402, conversion engine 108 determines that “business event code” is “PLS”.
It is determined whether or not “AD” (loan sales) (ST406). If so, conversion journal entry is prepared in ST404 using program 1 (sales). Otherwise, the conversion engine 108 indicates that the “business transaction code” is “CHOFF”.
”(Loan loss processing). If so, the conversion journal entry is prepared in ST408 using program 2 (loss processing). Otherwise, conversion journal entries are prepared at ST410 using program 3 (fee recognition).

Information other than the contradiction report (DR) / change request (CR) indicator, account number, and amount is extracted in ST412.

The conversion engine 108 only converts journal entries for accounts related to prepaid fees (“prepaid fee related accounts”) “grace and amortization”. Exemplary “prepayment fee related accounts” in one implementation of the LS2 commercial lending application are listed in Table II below. Business transaction codes affected by GAAP conversion are also listed.

(Program 1 (Sales))
To prepare the conversion journal entry, the conversion engine 108 extracts all entries in the “Prepaid Fee Related Account” of the US GAAP journal entry. The conversion engine 108 then cancels these entries and converts the net amount to “
Posted in “Gain on loan sales” or “Loss on loan sales”. Therefore, for all US GAAP journal entries, “Dr
The “/ Cr indicator” is canceled, the net amount is input to the debit or credit account of “prepaid commission income”, and the conversion journal entry is closed.

FIG. 6 is a flowchart showing a program 1 for preparing conversion journal entry (sale) for a prepaid fee. In ST502, the amount of US GAAP entry for DR / CR indicator and prepaid fee related account is extracted from US GAAP journal entry. In ST504, the DR / CR indicator of the prepayment fee related account is canceled. In ST506, the net amount of the prepayment fee related account is calculated and S
At T508, the amount of the US GAAP entry for the DR / CR indicator and the sale account gain or loss is extracted from the US GAAP journal entry. In ST510,
The net amount DR / CR indicator is equal to the gain DR / CR indicator (or
Is not equal to the loss DR / CR indicator. If equal, ST5
12, “gain ADJ” is calculated as “gain ADJ” = MAX (net amount—loss on sale, 0), and “loss ADJ” is calculated as “loss ADJ” = MIN (net amount, loss on sale). Calculated. Next, in ST514, the net amount DR / CR indicator is assigned to both the gain in sale and the loss in sale, the amount of “gain ADJ” is assigned to the gain in sale, and “loss ADJ”
Is allocated to losses on sale.

If it is determined in ST510 that the net amount DR / CR indicator is not equal to the gain DR / CR indicator (or not equal to the loss DR / CR indicator), S
At T516, “gain ADJ” is calculated as “gain ADJ” = MIN (net amount, gain on sale) 10 and “loss ADJ” is calculated as “loss ADJ” = MAX (net amount, gain on sale). The In ST518, the net amount of D
An R / CR indicator is assigned to both the gain on sale and the loss on sale,
The amount of “gain ADJ” is allocated to the gain in sales, and the amount of “loss ADJ” is allocated to the loss in sales.

In ST520, the conversion journal entry of program 1 is completed, and all elements of the journal entry are netted out.

(Calculation of gain and loss adjustment)
More specifically, the amount to be adjusted to “acquire in sale (GNOSL)” or “loss in sale (LSOSL)” as the conversion journal entry is determined as follows.

(I) Non-depreciation discount)
Amount adjusted to “Gain on sale (GNOSL)” = Minimum (US GAAP
Under non-amortized discount, “Gain on sale (GNOSL) under US GAAP
")
Amount adjusted to “Loss on sale (LSOSL)” = Maximum (US GAAP
Under Non-Amortized Discounts-“Gain on Sales (GNOSL)” under US GAAP
", 0).

If the US GAAP journal entry is a normal sale transaction, the adjustment is deducted in “Gain on sale (GNOSL)” and “Loss on sale (LSOSL)” and “Equity Discount (DISC)” or Credited to “Temporary Borrowing Discount (UNFDS)” and conversion journal entries should be prepared.

If the US GAAP journal entry is a reversal of the original sales transaction for correction, the adjustment amounts are “Gain on sales (GNOSL)” and “Loss on sales (LSO).
SL) ”and“ Equity Discount (DISC) ”or“ Temporary Debt Discount (UNF)
DS) ”should be borrowed and conversion journal entries should be prepared.

(Ii) Non-depreciable premium)
Amount adjusted to “Gain on sale (GNOSL)” = maximum (US GAAP
Under Non-Amortized Premium-“Loss on Sale (LSO) under US GAAP
SL) ", 0),
Amount adjusted to “Loss on sale (LSOSL)” = minimum (US GAAP
Premium not depreciated under “GAAP loss” under US GAAP (
LSOSL) ").

If the US GAAP journal entry is a normal sale transaction, the adjustment is credited to “Gain on sale (GNOSL)” and “Loss on sale (LSOSL)” and “Equity discount (DISC)” or Debited to “Temporary Borrowing Discount (UNFDS)” and conversion journal entries should be prepared.

If the US GAAP journal entry is a reversal of the original sales transaction for correction, the adjustment amounts are “Gain on sales (GNOSL)” and “Loss on sales (LSO).
SL) ”and“ Equity Discount (DISC) ”or“ Temporary Debt (UNFDS)
) "And conversion journal entries should be prepared.

Table III shows examples of adjusting gains and losses in sales (gains and losses in loan sales).

(Program 2 (loss processing))
In order to prepare the conversion journal entry, the conversion engine 108 extracts all entries in the “prepayment fee related account”. Next, the conversion engine 108 undoes these entries and adjusts the net amount as an adjustment to the account “Loss in Loss Processing (ALLO
W) ". Therefore, the conversion engine 108 is responsible for “prepayment fee related account”.
Cancel all "Dr / Cr indicator" entries in US GAAP journal entries and enter the net amount into the "Loss on Loss Processing (ALLOW)" debit or credit account and close the conversion journal entry.

FIG. 7 is a flowchart showing a program 2 for preparing conversion journal entry (loss process) for a prepaid fee. In ST602, the US GAAP entry amount of the DR / CR indicator and the prepaid fee related account is extracted from the US GAAP journal entry. In ST606, the prepayment fee related account is canceled. ST6
In 06, the prepayment fee related account is the calculation account, and in ST608, “net amount”
It is determined whether or not = CR balance account. If so, “CR” is DR
As a / CR indicator, the amount of the net CR deduction account is allocated to the loss in the loss process in ST610. Otherwise, “DR” is DR / C
Assigned as an R indicator. In ST612, the produced DR balance is assigned to the loss in the loss process.

In ST614, the conversion journal entry of the program 2 is completed, and all elements of the journal entry are input and netted out.

(Program 3 (fee recognition))
In order to prepare the conversion journal entry, the conversion engine 108 extracts all entries in the “prepayment fee related account”. Next, the conversion engine 108 cancels these entries and sets the net amount as an adjustment to the account (or offset account).
Posted in Prepaid Fee Revenue. Accordingly, the conversion engine 108 cancels all “Dr / Cr indicator” in the US GAAP journal entry to the “Prepaid Fee Related Account” and enters the net amount into the “Prepaid Fee Revenue” as the debit or loan amount. , Close the conversion journal entry.

“Prepaid fee income” is a loan by way of bill (A / C # 54430)
(1) Prepaid loan fee income (loan by bill)), loan by certificate (A / C)
# 544302 Prepaid Loan Fee Revenue (Loan with Certificate) and other products (A / C # 544303 Prepaid Loan Fee Revenue (Other)). The distribution of these accounts is determined based on the “risk type” supplied from the LS2 commercial lending application and captured in the Oracle interface table 106.

FIG. 8 is a flowchart showing a program 3 for preparing conversion journal entry (fee confirmation) for a prepaid fee. In ST702, the amount of the US GAAP entry for the DR / CR indicator and the prepayment fee related account is extracted from the US GAAP journal entry. In ST704, the net amount of the fee related account is calculated, and in ST706, it is determined whether or not “net amount” = CR deduction account. If so, “CR” is allocated as a DR / CR indicator in ST708, and it is determined in ST710 whether or not the risk type is a loan in a securities group. If so, the net CR deduction account amount is ST
At 712, “prepayment fee (loan securities)” is allocated. Otherwise, the amount of the net CR deduction account is allocated to “prepayment fee (loan by bill)” in ST714.

If it is determined in ST706 that the “net amount” is not equal to the CR deduction account, “DR” is allocated as a DR / CR indicator in ST716, and the amount of the net DR balance is allocated to the loss in the loss process. . Next, ST7
At 18, it is determined whether the risk type = loan in the securities group, and if so, the net DR deduction account amount is assigned to “prepaid commission (loan on certificate)” at ST720. Otherwise, net DR
The amount of the balance account is allocated to “prepayment fee (loan by bill)” in ST722.

In ST724, the conversion journal entry of the program 3 is completed, and all elements of the journal entry are netted out.

(II. Loans on sale)
US GAAP
Loans placed on sale are reported at lower cost or market value (
LOCOM).

JP GAAP
Loans placed on sale are reported at cost.

A. Problems According to US GAAP, loans being sold are reported at lower cost or market value (LOCOM). According to JP GAAP, loans being sold are reported at cost. The LS2 commercial lending application allows users to evaluate equipment being sold at LOCOM according to US GAAP (Guidelines for Certified Public Accountants). The user may select an accounting method for the equipment being sold according to JP GAAP, which requires a cost method. A user at a US branch selects LOCOM for accounting for the equipment being sold according to the guidelines of the American Institute of Certified Public Accountants. Therefore, for the purposes of JP GAAP reporting, unrecovered losses recognized under US GAAP should be reversed.

B. Solution / Conversion (Outline of journal entry conversion)
All US GAAP journal entries for LOCOM reassessment are conversion engine 10
8 is used to generate the appropriate JP GAAP accounting result. US GAA
The journal entry that cancels the P journal entry is submitted to the adjustment SoB 112 as a conversion journal entry. In this case, JP GAAP journal entries are not submitted to JP SoB 114.

(Details of journal entry conversion)
The LS2 commercial lending application uses the end-of-day batch entry (EOD batch entry) to calculate period-to-day unrecovered losses for trading day available and open sale interests (sold but not paid). Post a LOCOM valuation loss by posting and canceling the corresponding amount at the end of the previous day. L
S2 commercial loan application is “business transaction code” = DLYPL (uncollected P
Generate these journal entries for & L.

US SoB interface information includes "business transaction code" and "Oracle
"CL Account Code", "DR / CR Indicator", "Amount" and other information required for accounting purposes. Journal entry for LOCOM reassessment by conversion engine 108,
That is, if it receives “business transaction code” = “DLYPL” (which is captured as “journal category name” in the Oracle interface table), the conversion engine 108 prepares the conversion journal entry and submits the entry to the adjustment SoB To do.

((1) Conversion journal entry)
Conversion engine 108 prepares conversion journal entries and cancels US GAAP journal entries for posting and canceling LOCOM valuation losses. These entries are for LOCOM
Prepared by revoking all “DR / CR identifiers” in US GAAP journal entries related to the assessment.

((2) JP GAAP journal entry)
In this case, JP GAAP does not require a LOCOM assessment for the loan, so no journal entry is submitted to JP SoB 114.

Table IV shows sample journal entries (journal entries for loans being sold), and FIG. 9 is a high-dimensional flowchart (GAAP conversion for loans being sold and trading loans).

In ST802, the conversion engine 108 uses the business event code = “DLYPL”.
Is determined. If so, the “group ID” is changed to “JP GAAP” in ST804, and the JP GAAP journal entry is entered in ST80.
6 is exported to JP SoB 114. The business event code is "
If not equal to "DLYPL", a reversal entry (DR / CR indicator is revoked) is prepared in ST808, and this reversal journal entry is exported to the adjustment SoB 112 in ST810. Other interface information for the US GAAP general ledger, such as “creation date”, “accounting date”, “product number”, “
"Customer code" etc. are not modified except for "Journal category name" and adjusted SoB11
Submitted to 2. “Journal category name” for “US SoB” is “US GAAP”
Is. However, this is replaced with “conversion” for the adjustment journal entry.

(III. Loans on trading)
(US GAAP)
Loans placed on trading are marked for trading (MT
M).

(JP GAAP)
Loans placed on sale are reported at cost.

(A. Problems)
According to US GAAP, a loan being traded is marked for sale, and according to JP GAAP, a loan being sold is reported at cost. The LS2 commercial lending application allows users to rate equipment that is being traded according to US GAAP.
The user can also select an accounting method for the equipment being traded according to JP GAAP, which requires a cost method. However, a user at a US branch selects an accounting method for the equipment being traded in accordance with US GAAP (Guidelines of the Certified Public Accountants Association). Therefore,
For the purposes of JP GAAP reporting, unrecovered gains / losses recognized under US GAAP should be reversed.

B. Solution / Conversion (Outline of journal entry conversion)
All US GAAP journal entries for the MTM revaluation are canceled using the conversion engine 108 and the appropriate JP GAAP journal entries are generated. U
Journal entry to cancel S GAAP journal entry is adjusted as conversion journal entry SoB1
12 submitted. In this case, the JP GAAP journal entry will be entered in JP SoB114.
Not submitted to.

(Details of journal entry conversion)
The LS2 commercial lending application uses the end-of-day batch entry (EOD batch entry) to make the period-to-day uncollected gains on the trading day available share and the open sale interest (sold but not paid). / Post a loss and record the MTM valuation loss by canceling the corresponding amount at the end of the previous day. LS2
Commercial lending application is “business transaction code” = DLYPL (uncollected P & L
US SoB interface information that generates these journal entries for “Nippon Nikkei” is “Business Transaction Code”, “Oracle
"GL Account Code", "DR / CR Indicator", "Amount" and other information required for accounting purposes. If the conversion engine 108 receives a journal entry for the MTM revaluation, ie “business transaction code” = “DLYPL” (which is captured as “journal category name” in the Oracle interface table), the conversion engine 108 converts the conversion journal. Prepare entry and submit entry to Coordination SoB.

((1) Conversion journal entry)
Conversion engine 108 prepares conversion journal entries and cancels US GAAP journal entries for posting and canceling MTM valuation gains / losses. These entries are MTM
Prepared by revoking all “DR / CR identifiers” in US GAAP journal entries related to the assessment.

((2) JP GAAP journal entry)
In this case, JP GAAP does not require an MTM evaluation for the loan,
No journal entries will be submitted to JP SoB114.

Table V shows sample journal entries (journal entries for loans being traded), and FIG. 9 is a high-dimensional flowchart (GAAP conversion for loans being sold and trading loans).

Other interface information for the US GAAP General Ledger, such as “creation date”, “accounting date”, “product number”, “customer code”, etc., is adjusted without modification except for “journal category name” and Submitted to JP SoB114. The “journal category name” for “US SoB” is “US GAAP”. However, this is replaced by “conversion” for the adjustment SoB.

(IV. Standby letter of credit or debt guarantee)
(US GAAP)
Standby letters of credit, debt guarantees, and other risk involvements generally have no immediate accounting effect (however, a memorandum is entered as a contingent liability).

(JP GAAP)
Standby letters of credit, debt guarantees, and other risk involvements are recorded as contingent liabilities on the balance sheet. The related contingent accounts are also recorded in the balance sheet by the same amount (actual balance sheet entry).

(A. Problems)
In US practice, the LS2 commercial lending application performs journal entries and guarantees for SBLC as memorandum entries. In order to be consistent with JP GAAP, these entries are reclassified to balance sheet entries.

(B. Solution / Conversion)
According to US GAAP, the LS2 commercial lending application records the SBLC and debt guarantee principal as a memorandum entry. However, the JP GAAP and US GAAP financial statements may have different account summaries because the Oracle general ledger system has different SoBs for JP GAAP and US GAAP, respectively. If the general ledger system compiles into a JP GAAP financial statement based on JP SoB, S
The BLC and debt guarantee principal account and its offset account are included in the balance sheet as "Customer obligations for syndicated and debt guarantees" and "Syndicated and outstanding debt guarantees", respectively. General ledger system is US SoB
When compiling into a US GAAP financial statement based on SBLC, the debt guarantee principal account and its offset account are not included in the balance sheet.

(V. Standby Letter of Credit or Sales Debt Guarantee)
(US GAAP)
Standby letters of credit and guarantees for sale are recorded as contingent liabilities (memorandum entry).

(JP GAAP)
Standby letters of credit and sales guarantees are recorded as contingent liabilities (actual balance sheet entry).

(A. Problems)
If the SBLC and debt guarantee are sold, the LS2 commercial lending application reclassifies the memorandum debit account from the account for self-allocation to the account for participant allocation. The result of this entry is as follows.

Dr) LC principal account (LCPRN)
Dr) LC principal sale (LCSLD)
Cr) LC principal offset (LCCON)
JP GAAP processing is basically consistent with US GAAP. However, some MIS systems can be designed to record the LC sales separately and not only in the debit account but also in the credit account (offset account).

(B. Solution / Conversion)
(Outline of journal entry conversion)
The conversion engine 108 prepares the conversion journal entry and reads “LC principal offset (LC
CON) ”is split and the amount is converted to“ LC principal sale offset (
SDCON) ".

(Details of journal entry conversion)
If the conversion engine 108 receives a journal entry for the LC principal, it performs the following calculation.

Value A = LC principal sale (LCSLD)
The value A is deducted from the LC principal offset (LCCON) and recorded as “LC principal sale offset (SDCON)”.

In a normal LC issuance transaction, the balance account of LC principal (LCCON) is a credit account, and conversion journal entries are as follows.

Dr) LC principal offset (LCCON)
Cr) LC principal sale offset (SDCON)
In the case of a reduction in LC principal, for example, termination or maturity, conversion journal entries are as follows.

Dr) LC principal sale offset (SDCON)
Cr) LC principal offset (LCCON)
Table VI shows sample journal entries (journal entries for SBLC sales).

FIG. 10 is a flowchart showing GAAP conversion for SBLC sales.
In ST902, business transaction code = “LCDRP”, “SRCLS”, “SBT”
Whether it is “AC” or “SBTNA” is determined. If not,
In ST904, “Group ID” is changed to “JP GAAP”.
GAAP journal entries are exported to JP SoB 114 at ST906. If the business transaction code is equal to “LCDRP”, “SRCLS”, “SBTAC” or “SBTNA”, as described in more detail with reference to FIG.
In ST908, conversion journal entry is prepared. In ST910, US GAAP
Journal entries and conversion journal entries are used to prepare JP GAAP journal entries. US GAAP journal entries and conversion journal entries will be netted out and "Group I
“D” is changed to “JP GAAP”. JP GAAP journal entry is ST91
2 is exported to JP SoB 114. Conversion journal entry is ST9
14 is exported to the adjustment SoB.

FIG. 11 is a flowchart for explaining preparation for conversion journal entry for SBLC sales. In ST1002, account number 291501, 292502 or 29
The US GAAP journal entry DR / CR indicator and amount for 3501 are extracted. In ST1004, the journal entry for the LC unpaid offset (491001) is prepared by the allocation account number 491001, the excerpt amount is allocated, and the excerpt DR / CR indicator is allocated. In ST1006, the journal entry for the LC unpaid sales offset (491501) is prepared by the allocation account number 491501, the extract amount is allocated, and the extract DR / CR indicator is canceled. In ST1008, all other information (excluding DR / CR indicator, account number, and amount) for journal entries is extracted. When the journal entry is completed, all information is integrated in ST1010.

(VI. Presentation of premium / discount for loans)
US GAAP
The premium / discount on the loan is deducted from the loan principal amount for the US GAAP financial statement presentation.
JP GAAP
Loan deduction accounts are presented in principal. Premiums and discounts are not deducted from the loan balance account, but are presented as prepaid expenses and accrued income (separate balance sheet items), respectively.

(A. Problems)
US GAAP financial statements and JP GAAP financial statements differ in the presentation of premiums and discounts. US G
In the AAP financial statement, premiums and discounts are deducted from the loan deduction account, while in the JP GAAP financial statement, premiums and discounts are presented separately as prepaid expenses and accrued income.

(B. Solution / Conversion)
The LS2 commercial lending application has separate GL accounts for premiums and discounts in addition to accounts for principal amounts. General Ledger
Since the system has separate SoBs for JP GAAP and US GAAP, JP GAAP and US GAAP financial statements can have different lists of accounts. When the General Ledger system compiles JP GAAP financial statements based on JP SoB 114, the premiums and discounts in the loan are included in “Prepaid Expenses” and “Receivables”, respectively. General Ledger
When the system compiles US GAAP financial statements based on US SoB110, the premiums and discounts on the loan are "
Deducted from "Loan" deduction account.

(VII. Presentation of allowance for credit losses)
US GAAP
In presenting the US GAAP financial statement, the allowance for credit losses should be deducted from the loan principal amount.
JP GAAP
In the presentation of the JP GAAP financial statement, the allowance for credit losses is a separate balance sheet item (liability account).

(A. Problems)
The provision for allowance for credit losses differs between the US GAAP financial statement and the JP GAAP financial statement. US GAA
In the P financial statement, the loan deduction account should be presented as the net amount of the allowance for loan losses, whereas in the JP GAAP financial statement, the loan deduction account should be presented as a separate liability account.

(B. Solution / Conversion)
The LS2 commercial lending application has a separate GL account for the allowance for loan losses in addition to the account for the principal amount. General Ledger
Since the system has separate SoBs for JP GAAP and US GAAP, JP GAAP and US GAAP financial statements can have different lists of accounts. When the General Ledger system compiles JP GAAP financial statements based on JP SoB 114, the allowance for loan losses is presented as a separate liability account. When the General Ledger system compiles US GAAP financial statements based on US SoB 110, the allowance in the loan is deducted from the “loan” deduction account.

(VIII. Presentation of loan deduction account)
US GAAP
A separate deduction account heading is required for each portfolio (a portfolio that is maintained until due or due to sale). Also,
Further disclosure on loan classification based on secondary mortgage type, counterparty and due date is needed.
JP GAAP
There is a separate balance sheet for each loan legal form (certificate loan or bill loan).

(A. Problems)
The LS2 commercial lending application has a loan classification code table that complies only with US regulations.

(B. Solution / Conversion)
An additional MIS code is added to each loan contract for the JP loan classification (certificate loan or bill loan). Each journal entry for a loan is accompanied by a MIS code. The General Ledger system has separate accounts for “Loan by Certificate” and “Loan by Bill” for each GL classification code. When the General Ledger system receives a journal entry for a loan, it distinguishes between “Loan on Certificate” and “Loan on Bill” based on the MIS code and assigns the appropriate GL account code.

(IX. Non-performing loan)
US GAAP
There is no quantitative GAAP standard for default (FASB Standard 1
14 and 118). The Federal Reserve Bank wants to hold interest accrual until 90 days after the due date, past principal due date, or until a critical event.
JP GAAP
Interest accruals on impaired loans are withheld in accordance with the standards specified in Japanese tax regulations. In general, accrual of interest on loans whose principal is past due or interest is due for more than 6 months or significant credit has been suspended.

(A. Problems)
The LS2 commercial lending application has separate accounts for accrued businesses / loans and non-interesting businesses / loans with respect to appropriation deductions, loan principal amounts, and equity discounts and equity premiums for a given credit event. If this occurs, the corresponding balance account is reclassified from the accrual status account to the nonaccrual status account. The LS2 commercial lending application also cancels all entries for accrued interest received on interest bearing loans and accrued interest on interest bearing loans after the memorandum. In addition, if the business is in the state of accruing interest,
Equity discount / premium amortization is withheld and all accrued commissions are also cancelled (a memorandum entry for the accrual charges is not recorded in the non-accrual loans and operations).

US branch users should accrue interest-bearing loans in accordance with US statutory accounts, and transfer to interest-bearing status will be past 90 days after due date, principal due date, or past due date Hold until critical event. However,
A Japanese sales office may choose a timing for a transfer to an accrual status in accordance with Japanese GAAP, even for US GAAP reporting purposes. Accordingly, in the official US SoB110, interest-bearing loans are accounted for using the LS2 function described above, but the timing of transfers is in accordance with JP GAAP.

Under JP GAAP, the transfer to the state of accrual of interest is less conservative than US GAAP because it follows Japanese tax law. In addition to the timing of transfers, accrued interest (recorded prior to the credit event in the previous year) is also different from US GAAP / regulatory accounting. Generally, the following accrued interest is not recorded.

i) Recorded interest income will not be recorded after the principal payment date. However, the accrued interest income by the due date of the principal should be recorded unless it should be recognized according to other criteria described below.

ii) At the end of each fiscal year, if no interest collection has occurred on interest income due prior to six months, no accrued interest income is recognized for the loan during the fiscal year. However, for a loan, if the recorded interest income recorded at the end of the previous fiscal year has not yet been accrued, the amount should not be canceled unless the receipt meets the depreciation criteria (accrued for more than 2 years). .

iii) If the collection of accumulated interest income (whether recorded or not recorded) in the past fiscal year is very small (less than 5%), the recorded interest income for the current fiscal year is not recorded. However, historical accrued interest income is
It will not be canceled unless the receipt matches the depreciation standard (accrued for 2 years or more).

(B. Solution / Conversion)
(Journal entry conversion)
(1) US regulation adjustment As mentioned above, the transfer to the state of accrual of interest is consistent between the US and JP SoB. However, at the US branch, for the purposes of US regulatory reporting, a manual additional reversal of accrued interest on loans past due 90 days is not possible outside of the LS2 commercial lending application, eg using an Excel spreadsheet. ,
Should be done.

On the other hand, for the purposes of JP GAAP reporting, additional interest accrual on nonaccrual loans (which does not meet depreciation standards) should be recorded. This entry is input to the conversion engine 108 as a conversion journal entry and supplied to both the adjustment SoB 112 and the JP SoB 114. At the end of each fiscal year, detailed information about the accrued loan and related accrued interest can be examined (eg, by the supervisory ministry). Based on this examination, the supervisory authority calculates additional accrued interest to be accrued under JP GAAP. These conversion journal entries are entered manually via the manual GL entry function of the conversion engine.

Other interface information for the US SoB, such as “generation date”, “accounting date”, “product code”, “customer code”, etc., is submitted to the adjustment SoB 112 without modification other than “group ID”. “Group I” for “US SoB”
“D” is “US GAAP”, but this is “JP” for JP SoB114.
Replaced by “GAAP”.

(X. Direct costs related to loan execution / approach)
US GAAP
Direct costs related to loan execution and initiatives are deferred and recognized as a yield adjustment over the life of the loan using the interest method in accordance with FASB Statement No. 91.
JP GAAP
Fees and charges for loan execution will be charged when the relevant services are provided (
Recognized (usually when received). Loan execution costs, including direct and indirect costs, should be charged to revenue when incurred. Deferrals and amortizations as a yield adjustment for these fees and costs are not recorded.

(A. Problem 1)
Many users of LS2 commercial lending applications do not use LS2 for deferring and amortizing direct loan costs. Instead, the total direct cost incurred for all loan execution activities during that period can be allocated between each transaction (eg, the supervisory ministry or loan back office department). Relevant entries are entered directly into the general ledger system by the supervisory ministry or loan back office department.

(B. Solution 1)
Defer and amortize direct costs related to loan execution and initiatives outside LS2.

(C. Problem 2)
Deferred direct write-offs and amortization related to the implementation and commitment of loans in accordance with FASB Statement No. 91 are recorded under US GAAP. However, deferrals and amortizations should be canceled for Japanese reporting purposes.

(D. Solution 2)
Conversion journal entries to cancel US GAAP journal entries are prepared and entered directly into the general ledger system by the supervisory ministry or loan back office department,
JP SoB 114 is generated.

The financial reporting systems and methods described above provide a single workflow that can be applied to convert an original entry book in one accounting system to another report book in a different accounting system. This system and method allows a user to establish accounting methods for various items according to generally accepted accounting principles (GAAP) of any country.

The above-mentioned GAAP conversion is shown as an example of a conversion that can be performed using a conversion engine according to an embodiment of the present invention. It can be readily appreciated that PL / SQL can be generated to perform transformations that account for other GAAP differences.

Further, the conversion between the US and JP GAAP is shown to illustrate the benefits that can be obtained using the conversion engine. It is envisioned that a procedure can be developed to provide a conversion between two or more other GAAP criteria.

While a particular embodiment of the invention has been illustrated and described, the invention is not limited to this embodiment as modifications can be made by those skilled in the art. This application contemplates any and all modifications that fall within the spirit and scope of the basic invention disclosed and claimed herein.

12 Conversion Engine 14 Rule Database 16-1 US SoB
16-2 JP SoB
16-3 Adjustment SoB
102 LS2 (US GAAP)
104 NEON middleware 106 Oracle GL interface table 108 Oracle workflow 110 US GAAP SoB
112 Adjustment SoB
114 JP GAAP SoB

Claims (1)

Invention described in the specification.

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