# CTRM Accounting Reporting Architecture This document defines the **conceptual architecture of accounting and financial reporting** in a CTRM / ERP environment. The purpose is to provide a **standard framework for financial reporting** independent of the technical data model. This architecture will later guide: - ERP / CTRM data mapping - SQL query design - BI reporting layers - reconciliation controls - auditability The framework follows **commodity trading accounting best practices**. --- # 1. Reporting Layers In a CTRM environment, reporting must be organized into **five logical layers**. Operational Layer ↓ Subledger Layer ↓ Accounting Layer ↓ Financial Reporting Layer ↓ Management Analytics Layer Each layer has different users and reporting objectives. --- # 2. Operational Layer This layer contains **trading and operational activity**. Typical objects: - contracts - trades - positions - physical deliveries - logistics - settlements Reports in this layer are typically **operational dashboards**. Examples: Open positions Trade lifecycle Contract exposures Inventory movements These reports are **not accounting reports**, but they feed accounting events. --- # 3. Subledger Layer Subledgers translate operational activity into **financial transactions**. Typical subledgers in a CTRM: Accounts Receivable Accounts Payable Inventory Cash / Banking Derivatives Forex Reports in this layer include: Customer balances Supplier balances Payment status Cash movements Inventory valuation Derivative positions Subledger reports allow **operational reconciliation** before data reaches the general ledger. --- # 4. Accounting Layer This layer represents the **official accounting ledger**. It contains: journal entries posting dates accounting accounts currencies documents Core accounting reports: General ledger Trial balance Journal listing Account movements These reports represent the **single source of truth** for financial reporting. --- # 5. Financial Reporting Layer This layer produces **statutory financial statements**. Typical reports: Balance sheet Profit & loss Cash flow statement Comparative financial statements Characteristics: - structured by account hierarchy - aligned with accounting standards - used for management and external reporting --- # 6. Management Analytics Layer This layer provides **business performance analytics**. Examples: Trading P&L Desk profitability Commodity profitability Margin analysis Risk exposure Data sources may include: - accounting entries - positions - MTM valuations - hedging data This layer often feeds **BI tools and dashboards**. --- # 7. Core Accounting Objects To support reporting, the system must expose a minimal conceptual model. ## Journal Entry Basic accounting object. Typical attributes: entry_id journal posting_date document_number account currency debit credit description --- ## Accounting Document Represents the business origin of entries. Examples: invoice payment bank transaction mtm adjustment fx settlement Each document may generate **multiple journal entries**. --- # 8. Accounting Events Commodity trading systems generate accounting through **events**. Examples: Trade confirmation Physical delivery Invoice issuance Payment execution MTM revaluation FX settlement Derivative settlement Each event generates a **defined accounting pattern**. Example: Customer invoice Debit Accounts Receivable Credit Revenue --- # 9. Realized vs Unrealized Results A key concept in CTRM reporting is the distinction between: Realized results Unrealized results ## Realized P&L Generated when economic events are completed. Examples: sale invoice contract settlement derivative settlement fx settlement ## Unrealized P&L Generated by **valuation adjustments**. Examples: MTM valuation inventory revaluation open FX exposures These entries are usually **reversed in the following period**. --- # 10. Mark-to-Market Reporting CTRM systems rely heavily on **MTM valuation**. Typical reports: MTM valuation by contract MTM valuation by desk MTM valuation by commodity Accounting representation: Debit / Credit Unrealized P&L Counterpart MTM reserve account --- # 11. Hedge Accounting Many CTRM systems implement **hedge relationships**. Concepts: hedged item hedging instrument hedge effectiveness Reports include: hedge exposure hedge effectiveness hedge P&L Accounting depends on the hedge model used. --- # 12. Forex Reporting Commodity trading often involves **multi-currency flows**. Forex reporting usually includes: FX exposures Realized FX results Unrealized FX results FX revaluation Key accounting processes: currency translation revaluation of open balances FX settlement --- # 13. Cash and Banking Reporting Cash reports are essential for reconciliation. Typical reports: Bank ledger Cash position Payment history Bank reconciliation These reports ensure: ERP balances = bank statements --- # 14. Reconciliation Framework A CTRM reporting architecture must include reconciliation layers. Critical reconciliations: Subledger vs General Ledger MTM vs Accounting MTM Positions vs Accounting Inventory Bank vs Accounting Cash These controls are essential for audit. --- # 15. Multi-Currency Reporting Commodity trading is inherently multi-currency. Reports must support: transaction currency functional currency reporting currency Typical reporting outputs: local currency group currency contract currency --- # 16. Report Parameterization Most reports should support standard parameters. Typical parameters: date_from date_to entity account currency counterparty desk commodity contract Standardization allows consistent reporting behaviour. --- # 17. Export and Integration Accounting reports must support export formats. Standard outputs: CSV XLSX PDF API endpoints This allows integration with: BI tools regulatory reporting external auditors --- # 18. Auditability All reports must guarantee traceability. Requirements: source document reference journal entry reference posting date user identification This ensures **audit compliance**. --- # 19. Future ERP Mapping Once the ERP / CTRM data model is available, the next step will be: map reports → tables map reports → fields define SQL views define BI datasets The current documentation defines the **functional blueprint**. --- # 20. Summary The reporting architecture is based on the following layers: Operational Subledger Accounting Financial Reporting Management Analytics This layered model ensures: clear responsibilities robust reconciliation auditability scalable reporting It provides the foundation for implementing accounting reporting in a CTRM / ERP open-source platform.