5 and 1 plan

The chart of accounts is a list of synthetic accounting accounts that are used to reflect the condition of the bank’s own and borrowed funds and their placement in credit and other active operations (Appendix 1). The chart of accounts in credit institutions uses the principles of grouping accounts according to uniform economic characteristics of liquidity, urgency and ensures the concreteness of information. All accounts are divided into balance sheet and off-balance sheet. Balance sheet accounts reflect cash and non-cash funds, settlements, funds raised, income and expenses, profits and losses. Balance sheet accounts are divided into active and passive. Passive accounts are designed to account for their own and attracted resources, active – to reflect their placement. All balance sheet accounts are subdivided into first-order accounts – consolidated, synthetic accounts, and second-order – detailed indicators of accounts of 1st order. Accounts of the first order are indicated by three figures from 102 to 705. The account number of the second order consists of five characters and is constructed by adding two numbers to the right to the account number of the first order. For example, 423 “Deposits of individuals” is a first-order account that reflects the attracted funds of individuals to deposits. Second-order accounts opened under this account reflect the status of the funds raised by maturity: 42,301 – on demand; 42302 – up to 30 days; 42303 – for a period of from 31 to 90 days; 42304 – for a period from 91 to 180 days; 42305 – for the period from 181 days to 1 year; 42306 – for the term from 1 year to 3 years; 42307 – for the term over 3 years; 42308 – for calculations using plastic cards. Off-balance sheet accounts reflect funds and valuables that are not owned by the bank and are held in safe custody and management (including trust management); obligations and claims not received in time (urgent transactions); deferred and late payments; securities (depository activity) in pieces. Off-balance accounts are also divided into accounts 1 and 2 of the order. For example, 913 “Securing the loans provided and funds placed” is a first-order account; and 91303 – “Securities accepted as collateral for loans issued, except for bills of exchange” – a 2 order account opened in the first. Off balance sheet accounts can also be active and passive. Special accounts are allocated for correspondence with them in the chart of accounts: 99998 – an account for correspondence with passive accounts with double entry (active); 99999 – account for correspondence with active accounts with double entry (passive). For example, a property is taken as collateral as security for a loan issued. You need to make the following entry: Debit 91307 “Property accepted as collateral for loans issued, except for securities” (active) Credit 99999 (account for correspondence with active accounts with double entry) Consider in more detail the basic principles, content and form of the chart of accounts in credit institutions of the Russian Federation from the standpoint of users of account information. 1. The division of accounts into active and passive (active-passive accounts do not apply). To reflect transactions in which the balance can be either debit or credit, there is a need for paired accounts – active and passive. At the beginning of the trading day, operations begin to be reflected in an account with a balance (balance) on the results of the previous day. If at the end of the day the opposite balance is formed on the account, then it is transferred to the corresponding paired account. It is not allowed to have a debit balance on a passive account or a credit on an active balance in the balance sheet at the end of the day. For example, on September 17, 2000 rubles for economic expenses were issued to the accountable person from the cash register. On September 18, an accountable person submitted an advance report on the purchase of office supplies in the amount of 2,100 rubles, which was approved on the same day by the chief accountant and the head of the bank. In accounting, the following entries will be made: September 17 – money is given from the bank’s cash office to a sub-report in the amount of 2000 rubles. Debit 60308 “Settlements with Bank Employees on Accountable Amounts” (active) Credit 20202 “Cash Desk of Credit Institutions” (active) September 18 – an advance report on the purchase of office supplies in the amount of 2100 rubles was approved. Debit 61001 “Stationery” (active) Credit 60308 “Settlements with Bank Employees on Accountable Amounts” (active) After making a note on September 18, an account balance of 100 rubles is formed on account 60308 “Payments to Bank Employees on accountable amounts”. (debit turnover of 2000 rubles. loan turnover of 2100 rubles.). But, since the account 60308 is active, it cannot have a credit balance, therefore the amount is 100 rubles. at the end of the day should be transferred to the paired passive account 60307 “Settlements with bank employees for accountable amounts” with the following entry: Debit 60308 “Payments with bank employees for accountable amounts” (active) – 100 rubles. Credit 60307 “Settlements with bank employees on accountable amounts” (passive) – 100 rubles. If, in accordance with the agreement with the client (correspondent bank), the possibility of using an overdraft is provided for,

5 and 1 plan

Table 1. Structure of the Chart of Accounts

5 and 1 plan

Characteristics of the main sections of the balance sheet accounts of the chart of accounts Accounts of section 1 “Capital and funds” consist of 1st order accounts reflecting the authorized capital of joint-stock banks, formed from ordinary and preferred shares, as well as own shares purchased from shareholders, authorized capital of share banks, additional capital, bank funds, which in turn are detailed into second-order accounts. The purpose of the accounts in this section is to account for the bank’s own funds that serve as collateral for its obligations. The size of the authorized capital is often used by analysts for rating the bank, assessing its financial stability and reliability. Accounting vision obliges to supplement the quantitative assessment of the size of the bank’s own funds (and above all its authorized capital) with a qualitative analysis of the risk of active balance sheet items reflecting the allocation of bank capital. For example, despite the large size of the authorized capital of the bank, a significant part of it can be placed in repeatedly prolonged low-quality loans. Errors in assessing the financial stability of a partner bank when issuing an interbank loan are in some cases related to the underestimation of this factor, with orientation only to the size of the authorized capital without assessing the degree of risk and liquidity of active balance accounts reflecting the real state of equity. The accounts of section 2 “Cash and precious metals” mainly take into account amounts of cash currency, including cash balances in transit, cash foreign currency and payment documents in foreign currency, precious metals and stones (the latter – with special permits). These are the most liquid assets of the bank, but they do not bring him income. Commission banks receive cash services. Therefore, balances on the accounts of this section are, as a rule, optimally minimal and correspond to the needs for cash customer service. Accounts in this section also reflect investments in precious metals and stones from commercial banks that have a special license to carry out operations with precious metals. These assets are highly liquid, least risky and reliable investments. In section 3 "Interbank operations" balance sheet accounts for interbank settlements, loans and deposits are concentrated. In the accounts of the first subsection "Interbank payments" Correspondent relations and mutual settlements between credit organizations, as well as between credit organizations and institutions of the Central Bank of the Russian Federation (cash settlement centers – RCC) are reflected. Among them, the central place is occupied by an active balance account 30102 "Correspondent accounts of credit institutions at the Bank of Russia"which is used for settlements of clients of commercial banks with enterprises and organizations that have accounts with other banks. The debit of the account reflects the amount of documents received from other institutions for crediting to customer accounts. Loan accounts are held amounts written off from the accounts of bank customers and subject to transfer to other banks. In addition, the correspondent account reflects the availability of the bank’s own funds in monetary form, including the funds of the authorized capital, other funds, and the income received. Payments on correspondent accounts of commercial banks in the RCC are made within the limits of the availability of funds on them. The status of the correspondent account (balance account 30102) largely determines the current liquidity of the bank, its solvency in relation to the mandatory current payments, the amount of which is determined by the size of the balance of funds in current and current clients’ accounts. Therefore, when assessing the current liquidity of the bank, issuing interbank loans, the state of the balance sheet account 30102 is the subject of close study and analysis. Correspondent accounts (balance sheet accounts 30109 and 30110) reflect correspondent relations between two or more credit institutions for making payments on the basis of an order from one of them, as well as the provision of loans, investment and other services. The main operation of commercial correspondent banks is the clearing (mutual offset) of monetary settlement documents. As the banking system developed and deposits increased in value, correspondent banks began to provide each other and other services. Large banks offer smaller asset management services, loans, advise on investment and other issues. Bank has correspondent accounts "Loro" essentially means the opening of an interbank deposit. At the same time, the development of correspondent relations gives the bank a number of advantages similar to the opening of new branches or branches. But at the same time, the bank retains its legal independence and control over the operations. In the same subsection, accounts are opened to record funds of obligatory reserves of credit institutions in rubles and foreign currency: 30202 "Obligatory reserves of credit institutions for accounts in the currency of the Russian Federation, listed in the Bank of Russia", 30204 "Obligatory reserves of credit institutions for accounts in foreign currency, listed in the Bank of Russia". On account 303 "Settlements with branches" interbranch settlements of credit institutions using separate active and passive accounts are reflected (30301 – passive account; 30302 – active account). In addition, two accounts are opened to reflect calculations with branches located abroad, respectively 30303 – passive and 30304 – active. In subsection "Interbank loans and deposits" a large group of accounts has been opened for accounting for interbank loans and deposits in rubles and foreign currency. In separate accounts of this subsection, arrears on interbank loans have been allocated, which should be reflected on the balance sheets of both creditors and borrowers with the allocation of loans provided by the Central Bank and non-resident banks. Similarly, overdue interest on loans of credit institutions in creditor banks and borrowing banks, including non-resident banks, is accounted for on separate accounts in this subsection. The availability of such information in the balance sheets of banks significantly improves the quality of the analytical framework for analyzing and managing credit risks, makes more reliable the results of the analysis of balances when assessing the financial stability and reliability of banks. All loans and deposits are divided into conjugated terms (from 1 day to 3 years and above) and are grouped within one balance sheet account into eight groups. Allocation of reserves for possible losses is provided for each group of loans and deposits. In section 4 "Transactions with clients (the first subsection – Funds in accounts) a group of accounts for the maintenance of budget operations was opened (balance account 401 "Federal budget funds", 402 "Means of budgets of subjects of the Russian Federation and local budgets", 403 "Other budget funds", 404 "Funds of state extra-budgetary funds" and others), on servicing the bank’s customers – legal entities and individuals-entrepreneurs. They are dominated by passive accounts, reflecting the attracted resources of credit institutions. Here is also opened account 409 "Funds in the calculations", reflecting on the accounts of the second order traditional banking operations with letters of credit, payment checks, payment orders accepted by the bank and other operations related to the organization of settlements, including mutual offsetting. In subsection "Deposits" a large group of new passive accounts has been opened to account for deposits of the Ministry of Finance of Russia, financial bodies of constituent entities of the Russian Federation and local authorities, deposits of extrabudgetary funds of the Russian Federation, commercial and non-profit organizations. In this subsection there are also traditional deposit accounts for accounting for ruble and foreign currency deposits of individuals, legal entities and individuals – non-residents. For all deposit accounts, a single structure of second-order accounts is used in terms of: • demand; • for a period of 1 day; • up to 7 days; • up to 30 days; • for a period from 31 to 90 days; • for a period from 91 to 180 days; • for a period from 181 days to 1 year; • valid for more than 1 year to 3 years; • valid for more than 3 years. In subsection "Credits granted" open large group of active loan accounts. Accounts of the first order are subdivided by subjects, accounts of the second order are classified according to the terms for granting loans in the same way as deposit accounts, which should provide sufficient information to manage the liquidity of credit institutions. Credits provided with a lack of funds in the settlement (current) account (overdraft) for credit subjects are reflected in separate accounts of the second order. For each active loan account of the first order, provision is made for a reserve for possible losses with reflection on a separate passive account. To account for loans that are not repaid on time, a separate balance sheet account is intended. 458. In second-order accounts to account 458, all types of overdue loans (short-term, long-term, in foreign currency) are taken into account in relation to the subjects – categories of borrowers. The accounting for overdue interest on the balance account 459 "Interest on loans not paid on time". In subsection "Other funds allocated" Section 4 has opened active accounts for accounting for other funds placed by credit organizations in accordance with established terms to various entities (the Ministry of Finance of Russia), financial authorities of the constituent entities of the Russian Federation and local authorities, various extra-budgetary funds and other legal entities and individuals. In the last subsection "Other assets and liabilities" monotonous active and passive accounts are opened for individual settlement operations of banks. Account 474 is intended to account for these transactions, within which second-order accounts are opened: 47401, a passive account intended to reflect settlements with customers on factoring and forfeiting operations, and, accordingly, an active account 47402 – to reflect debit transactions on these calculations; 47403, a passive account intended for accounting of settlements with currency and stock exchanges, and, accordingly, an active account 47404 – also to reflect similar transactions. Settlements with clients on the purchase and sale of foreign currency are subject to reflection in the corresponding passive account 47405 and active account 47406. For insurance against risks, an account 47424 is opened in this subsection "Reserves for possible losses on other assets". Section 5 "Securities Transactions" includes a large number of active and passive second-order accounts to reflect the operations of banks with securities. On active accounts, banks’ investments in securities are taken into account both in rubles and in foreign currency. Operations are grouped by first and second order accounts by types of debt obligations and investment entities. In the first subsection "Debt Investments" First-order accounts (501-507) were opened for accounting for debt obligations of the Russian Federation and its subjects, subjects of local authorities, as well as debt obligations of banks, including those acquired through Depo operations. The same subsection presents debt obligations of foreign countries, non-resident banks, and other debt obligations. For each type of obligation, provision is made for the formation and reflection in the accounts of the second order of reserves for possible impairment. Second subsection "Equity investments" Includes active accounts for accounting for acquired shares of banks, including non-resident banks, as well as other shares of other entities. The classification by accounts of the second order reflects investments in shares in Depo operations, their acquisition for resale, for investment. For each type of stock, it is planned to open second-order accounts to account for reserves for possible impairment. In subsection "Accounting Bills" open active accounts for the accounting of promissory notes of the authorities, banks, enterprises and other promissory notes. For all groups of promissory notes, there is a uniform structure for their classification and the corresponding construction of second-order accounts. Second-order accounts are opened depending on the timing of bills of exchange: • on demand; • with a maturity of up to 30 days; • with a maturity of 31 to 90 days; • with a maturity of 91 to 180 days; • with a maturity of 181 days to 1 year; • with a maturity of over 1 year to 3 years; • with a maturity of over 3 years; • not paid on time and protested; • unpaid and unprotested. For each type of promissory notes, a second-order account is opened to account for the reserve for possible losses. All debit active accounts of this section reflect the operations of investing the funds of banks in the securities being acquired shares, promissory notes, etc., and the loan means the sale of securities, respectively. In subsection "Bank issued securities" passive accounts were opened for accounting of bonds issued and sold by banks, deposit and savings certificates, bills of exchange. Securities of the second order are reflected in a single time structure: • with a maturity of up to 30 days; • from 31 to 90 days; • from 91 to 180 days; • from 181 days to 1 year; • over 1 year to 3 years; • over 3 years. Loan passive accounts reflect transactions associated with the issuance of securities; debit – with their implementation. In section 6 "Means and property" reflects the operations of banks to participate in subsidiary and controlled joint-stock companies, joint economic activities by transferring funds to the authorized capital of enterprises, organizations, banks. These operations are reflected in the active first-order accounts 601 and 602 with deeper detailing by subjects within the second-order accounts. In subsection "Settlements with debtors and creditors" reflects a variety of transactions in settlements with debtors and creditors: calculations with the budget for accrued taxes, calculations with extra-budgetary funds, for pay, with accountable persons, with contractors and buyers. These operations are reflected in the corresponding active and passive second-order accounts opened for the first-order balance sheet account 603. Subsection "Property of banks" designed to maintain accounts for transactions with the property of banks. On active accounts of the first order of this section are subject to accounting: fixed assets of banks (604); fixed assets transferred for use by banks (605); capital investment (607); leasing operations (608); intangible assets (609); household materials (610); low value items (611). A more detailed account of various types of fixed assets, capital investments, economic materials, intangible assets is conducted on active second-order accounts opened within the framework of the above-mentioned first-order active accounts. Passive accounts in this section are designed to account for depreciation of fixed assets (606), intangible assets (60903), depreciation of low-value and wear items (61103). The allocation of a special account in this section to reflect the costs of capital investments of credit institutions that are not covered by sources of funds,

Like this post? Please share to your friends:
Leave a Reply