This window enables you to classify your portfolio and loans in arrears according to different age classes. You will be able to define the different age classes of the loans in arrears and specify the corresponding GL accounts on which the amounts will be booked when these loans are declassified to the balance sheet.
1. The ageing report is only a management report that shows the different age classes and the corresponding amounts where as declassification of loans in arrears books to the balance sheet under Assets (Financial report). Also these amounts are posted to the GL accounts that were defined during classification. The following table shows you the trasactions that occur during classification and declassification of loans in arrears:
Balance sheet (Assets): We debit the assets..........................................................................GL account
Principal outstanding ..........................................UGX 5,000,000.........................................................00004.
Principal in arrears .............................................UGX 3,000,000
Principal not in arrears .......................................UGX 2,000,000
Classification of Loans in arrears (Ageing report for management)
You define the different age classes of the loans in arrears and the corresponding GL accounts on which the amounts will be booked when these loans are declassified to the balance sheet.
Age class.............................................................Amount..................................................................GL account
You have to declassify again to get a report with updated values.
How to define the age classes of loans in arrears
To do this, you go to System/Configuration/Loan Product/GL Accounts 2/2 and following screen appears:
New GL account: When you click on this button, the chart of accounts appears to enable you create the different GL accounts e.g. "124011"
Reset Fields: When you click on this button, all the fields under the GL accounts columns are cleared to enable you define new GL accounts.
Arrears Class: This field is read only and the Age Class number will automatically be generated by Loan Performer
Active from ... to.... days in Arrears: Hereyou specify the range of days in arrears for the given class and the corresponding GL accounts for the individual and group loans. Click on the Update button to create your classes.
Note:
Loan Performer comes with 12 default age classes. You just have to modify the default data with the details of your age classes and click on the update button to create them.
How to define the different loan charges:
The same window allows you to specify the different loan charges imposed on your clients and specify the corresponding GL accounts on which these amounts are booked.
Loan Charges: You have to link each loan charge to the corresponding GL.
Accrued charge due account:: Select GL accounts for accrued Accrued charge due account due for individual loans and the group loans e.g "125010 and 125020 " respectively. In LPF Loan charges due are accrued under the menu Accounting/Calculate Accrued interest.
Accrued charge earned account: Select GL accounts for Accrued charge earned account for individual loans and the group loans e.g "511010 and 511020 " respectively.
Stamp duty: Stamp duty in LPF is a tax levied on principal portfolio and interest income arising from portfolio that needs to be collected and handed to the tax body/ authority.
Stamp duty on principal (Expense account): Select the GL account where the stamp duty on principal will be booked. The statutory percentage of stamp duty on principal is defined under System/Configuration/Loan Product Settings/Fees this is an expense account.
Stamp duty on accrued interest (Expense account): Select the GL account where the stamp duty on accrued interest will be booked. The statutory percentage of stamp duty on accrued interest is defined under System/Configuration/Loan Product Settings/Fees it is also an expense account.
Stamp duty (Liability account): Select the stamp duty liability GL account where the stamp duty will be posted. This is the tax liability account used to collect the tax expenses before transferring it to the tax authority.
After configuring the stamp duty you can now calculate the stamp duty payable under menu Accounts/Calculate stamp duty.
Note that the booking to the GL will only happen when you print the report generated at calculation of Stamp Duty:
Click on the Save command button to save the Penalty settings and on the Close command button to exit the menu.
