Treasury commercial paper sale

[Former Member]

In Treasury Commercial paper client is asking entries like

1. Bank a/c               Dr          490000  (example)

    Commercial paper  Cr          490000        

and

2. Discount on C P  Dr               10000

    Commercial paper  Cr             10000

on starting date say 27-04-2016

let us say total rs 500000/-

and on maturity date  say 27-06-2016

entries

Commercial paper     Dr           500000

Bank                        Cr           500000

Interest on CP          Dr             10000

Discount on CP        Cr             10000

can it be done Commercial Paper, as if i select Nominal Value in Transaction type, I am getting full amount in cash flow and interest on CP 10000/-with sign.

Please advice

[former_member198450]

HI Srikanth,

Please change position change category. it should resolve your issue.

Regards,

Jain

[Former Member]

Hi Jain Varghese Thanks for your reply, i tried what you said for solution, but it is not the solution.

Thanks & Regards

Srikanth k

[Former Member]

It sounds like what they want to do is amortize the discount.

So when the commercial paper is issue you would have the system posting 2 entries (this is standard, you can't change that to post differently):

First Document:

Dr. Bank Cash                    50000

Cr. Com Paper Account      50000

Second Document:

Dr Discount                          1000

Cr Bank Cash                       1000

On the repayment the system will post:

Dr. Com Paper Account      50000

Cr. Bank Cash                     50000

Then for the commercial paper product type you'll need to configure amortization flows (also called accruals) which are run through transaction TPM44. Normally these are run on monthly basis, not just at the closure of the commercial paper.

And that amortization will post the entry you are looking for:

Cr Discount                          1000

Dr Interest                          1000

Amortization set up is a pretty complex topic. It is possible it is already configured , try running TPM44.

If it is not you'll need a configuration book / guide.

[Former Member]

Hi  Ella Svetlov Thank you very much for your solution.

[Former Member]

Hi Ella Svetlov

Have you had any material pertaining to Amortization configuration guide. Will you shave if you.

Thanks & Regards

Srikanth Katta

[Gustavo_Vazquez]

Hi Srikanth,

I think the only way possible is with "Other Flows" tab for

2. Discount on C P  Dr               10000

    Commercial paper  Cr             10000

In the matutity of the transaction, you will need to adjust your Account Assignment Ref, so the posting

Interest on CP          Dr             10000

Discount on CP        Cr             10000

is valid.

Kind regards

[Former Member]

Thank you Gustavo Vazquez

regards

srikanth