Configuring Investment G/L Codes (2)

Screen ID:

Screen Title:

Panel Number:

UINGL-02

Work with Investment G/L Codes

2269

$images\2269g_shg.gif$

This second screen is used to enter the General Ledger account numbers to which accruals and other activity will be posted for investments of this type.

Remember that this code is only used when the investment is initially created, as a shortcut for entering these accounts manually. You can, however, override an account number for a specific investment to handle special situations.

Enter all six valid GL account numbers and use Enter to save and return to the previous screen.

Use Delete (F16) if you wish to delete this code. This will have no effect on existing investments.

Recommendations for Setting Up GL Accounts

One of the main reasons to use a subsidiary system is to allow the balance sheet and income statement to be set up with general and broad accounts, creating a concise picture without a great amount of detail.

For example, a credit union may have 25 CDs, 13 US Treasury Bonds, 5 GNMAs, and 14 other miscellaneous investments, each having an income account, the need for discount and premium accounting, an accrued income account and even a gain/loss account. To track the detail separately in the balance sheet and income statement would require as many as 342 separate GL accounts! By using the subsidiary system, all of this activity can be neatly organized by investment type, requiring only 24 GL accounts or less.

Remember that the CU*BASE General Ledger system can compare balance sheets and income statements for every month your credit union has been using CU*BASE. Therefore, if you want to compare a balance sheet from 1997 to your current balance sheet in 2001, you need the GL accounts to be as consistent as possible across that period. Since an investment grouping such as “U.S. Government” would be ongoing, whereas a single U.S. Treasury might mature in only one year, it is important to understand the “category” of investment instead of each individual item, or the balance sheet comparison is not as meaningful. After all, it is more important to see a broad history showing in 1997 you were heavily invested in U.S. Government, in 1999 you divested of U.S. Government, then in 2001 reentered this investment arena. As far as the balance sheet is concerned, the actual instruments themselves are immaterial.

To help you think through how your chart of accounts should be organized, following is the NCUA suggested guidelines for investment-related general ledger accounts, broken out by a typical set of investment type categories:

	Categories (Investment Types)
	Bonds/Treasuries	Gov’t Securities	Certificates
Principal	741.00	742.00	746.00
Discount	741.10	742.10	746.10
Premium	741.20	742.20	746.20
Interest (Income)	121.00	122.00	126.00
Accrual	782.xx	782.xx	782.xx
Gain/Loss	420.xx	420.xx	420.xx