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