Export LC Exposure Report — Complete User Guide — Two Accounts Web

Comprehensive guide for generating, analysing, and understanding the Export LC Exposure report — tracking outstanding Export Letters of Credit, receivable balances, accrued interest, and days past maturity for export transactions secured by letters of credit

Table of Contents

1. What Is the Export LC Exposure Report?
   • Purpose and Structure
   • Export LC Lifecycle and Report Impact
2. Enabling from the Customize Menu
3. The Export Letter of Credit Workflow
   • Creating an Export Letter of Credit
   • Export LC Status Lifecycle
   • Glossary of Export LC Fields
   • Fee Lines
4. Export LC Receipts
   • Creating an Export LC Receipt
   • How Receipts Impact the Report
5. Interest Accrual
   • Accruing Interest
   • Resetting Accruals
   • Interest Calculation Formula
6. Field-by-Field Guide
   • Report Header Fields
   • Report Columns
7. Settings Configuration
   • Required Balance Sheet Accounts
   • Customize Menu
8. Creating an Export LC Exposure Report
9. How the Report Is Calculated
   • Data Loading and Filtering
   • Currency Conversion
   • Amount Calculations
   • Days Outstanding Calculation
   • Grouping and Subtotals
10. Sample Data and Report Output
    • Sample Setup
    • Report Output
    • Verification of Calculation
11. Common Issues and Solutions
12. Accounting Regulation Compliance

1. What Is the Export LC Exposure Report?

1.1 Purpose and Structure

The Export LC Exposure Report provides a detailed view of each Export Letter of Credit (LC) on record — showing the LC amount, fees charged, net receivable from the bank, amounts received to date, outstanding balance, accrued interest, current status, and days past maturity. It is the primary tool for monitoring the financial exposure related to export transactions secured by letters of credit.

Each row in the report represents a single Export Letter of Credit. The columns break down the full financial position of each LC: the gross amount, interest rate, accrued interest, bank fees, net receivable, received proceeds, outstanding balance, status, and overdue days.

The report supports filtering by date range, division, project, and specific customers. When the group-by-customer option is enabled, LCs are grouped alphabetically by customer with subtotals per customer.

1.2 Export LC Lifecycle and Report Impact

2. Enabling from the Customize Menu

The Export LC Exposure Report appears under the Reports tab. The report is only visible when the Export LC module are enabled in Customize Menu.

1. Go to Settings → Customize Menu
2. Ensure the Reports tab is enabled (check the checkbox)
3. Scroll down to locate Export LC Exposure Report under the Reports section
4. Check the box to enable it
5. Click Save

The report will now appear under Reports → Export LC Exposure Report. The report is listed alongside other LC-related reports such as the LC Exposure Report (for Import LCs).

3. The Export Letter of Credit Workflow

Before generating the report, Export Letters of Credit must be created in the system. Below is the complete workflow for managing Export LCs.

3.1 Creating an Export Letter of Credit

Location: Export Letters of Credit → New Export Letter of Credit

An Export Letter of Credit represents a bank's commitment to pay the exporter (the business) for goods shipped to a foreign buyer. The LC serves as the receivable from the bank, not from the customer directly.

3.2 Export LC Status Lifecycle

Important: The status transition from Opened → Documents Shipped is the point at which General Ledger entries are generated. The system creates the Export LC Receivable (debit) and Export LC AR Clearing (credit) entries, along with fee entries. Reversals occur on transition to Paid.

3.3 Glossary of Export LC Fields

3.4 Fee Lines

Each Export Letter of Credit can have multiple fee lines representing bank charges that reduce the net receivable. These fees are linked to LC Cost Type Settings which determine the default GL account for each fee type.

When the Export LC status transitions to Documents Shipped, each fee line generates a GL entry: Dr LC Expense (or Bank Charges), Cr Export LC Receivable (reducing the receivable). The net receivable displayed in the report equals LC Amount minus total fees.

4. Export LC Receipts

4.1 Creating an Export LC Receipt

Location: Export LC Receipts → New Export LC Receipt

Export LC Receipts record the actual cash received from the bank against an Export Letter of Credit. Each receipt reduces the outstanding balance shown in the report.

4.2 How Receipts Impact the Report

The report calculates LC Received as the sum of all Export LC Receipt amounts linked to the Export LC, plus any journal entry adjustments to the Export LC Receivable account (posted with the Is Export LC Adjustment flag).

The LC Outstanding is then calculated as:

LC Outstanding = Displayed Net Receivable − Displayed Received

When the full LC amount has been received (outstanding = 0), the LC is considered fully settled from a cash perspective.

5. Interest Accrual

For Usance-type Export LCs with an interest rate set, the system supports period-end interest accrual via the LC Accrue Interest feature. Accrued interest is tracked separately in the LC Accrual History and displayed as a column in the report.

5.1 Accruing Interest

Location: From the Export Letter of Credit view, click the Accrue Interest button (only available for Usance LCs with an interest rate and maturity date).

The system checks:

1. The LC has a Maturity Date set and an Interest Rate greater than zero
2. The LC has an outstanding balance (not fully paid)
3. No existing accrual exists for the current period

When these conditions are met, the system creates:

• A Journal Entry with Dr Interest Expense (P&L) and Cr LC Accrual Interest Payable (Balance Sheet)
• An LC Accrual History record tracking the period-end date, amount, and linked journal entry

5.2 Resetting Accruals

Location: From the Export Letter of Credit view, click the Reset Accrual button.

This allows reversing historical accruals in two modes:

• Reset History Only: Deletes the accrual history records but preserves the journal entries
• Reset History and JEs: Deletes both the accrual history records and their corresponding journal entries

5.3 Interest Calculation Formula

Financed Portion = LC Amount × (100% − Margin%) / 100%

Base Financed Portion = Financed Portion (converted to base currency at the LC exchange rate)

Days = Period End Date − Last Accrual Date
     (capped at Maturity Date if period end exceeds maturity)

Basis = 360 (if Interest Basis is Days360) or 365 (if Interest Basis is Days365)

Accrued Interest = Base Financed Portion × Interest Rate / 100 × Days / Basis

This matches standard loan interest accrual methodology under IAS 23 (Borrowing Costs).

6. Field-by-Field Guide

6.1 Report Header Fields

Location: Reports → Export LC Exposure Report → New Report

6.2 Report Columns

7. Settings Configuration

7.1 Required Balance Sheet Accounts

The Export LC module requires the following Balance Sheet accounts. These are created automatically as singleton accounts but can be renamed and grouped in the Chart of Accounts.

Location: Settings → Chart of Accounts → Balance Sheet → locate each account under its group.

8. Creating an Export LC Exposure Report

1. Go to Reports → Export LC Exposure Report
2. Click New Report
3. Enter a Description (optional)
4. Set the From Date and To Date to define the date range for Export LCs to include
5. Optionally filter by Division, Project, or specific Customers
6. Optionally enable Group by Customer for customer-grouped subtotals
7. Click Save
8. The report generates showing each Export LC in a row with all financial columns

9. How the Report Is Calculated

9.1 Data Loading and Filtering

The report loads all Export Letter of Credit records where the Date falls within the report's From Date and To Date range. Additional filters are applied:

• If a Division is selected, only LCs with that Division are included
• If a Project is selected, only LCs with that Project are included
• If Customers are selected, only LCs linked to those customers are included

LCs are sorted by Date in ascending order.

9.2 Currency Conversion

If the Export LC has a foreign currency set (LC Currency), all monetary amounts are converted to the base currency before display:

If ExchangeRateIsInverse = false:
  Effective Rate = ExchangeRate (e.g., 1 USD = 110 BDT)

If ExchangeRateIsInverse = true:
  Effective Rate = 1 / ExchangeRate (e.g., 1 BDT = 1/110 USD)

Display Amount = Original Amount × Effective Rate

All converted amounts are rounded to the base currency's decimal places.

9.3 Amount Calculations

For each Export LC, the following calculations are performed sequentially:

Total Fees = Sum of all Fee Line amounts (converted to base currency if foreign)

Net Receivable = LC Amount (converted) − Total Fees (converted)

Export LC Receipts Total = Sum of all ExportLCReceipt.Amount linked to this Export LC

JE Adjustments = Sum of Journal Entry lines posted to Export LC Receivable Account
                 where the journal entry has IsExportLCAdjustment = true

Total Received = Export LC Receipts Total (converted) + JE Adjustments (converted)

Outstanding = Net Receivable − Total Received

9.4 Days Outstanding Calculation

The Days Outstanding column helps assess credit risk per IFRS 9 (Expected Credit Loss). The calculation:

• Only activates when the LC has a Maturity Date and that date is before today
• Checks two conditions:
  1. The Outstanding balance is greater than zero, OR
  2. The Export LC AR Clearing balance is non-zero (indicating uncleared entries)
• If either condition is true, Days Outstanding = Today − Maturity Date
• If both conditions are false, the cell is left blank (LC is fully resolved)

This two-condition check ensures that LCs with accounting residuals are flagged even if the net outstanding appears zero.

9.5 Grouping and Subtotals

When Group by Customer is enabled, LCs are grouped by customer and sorted alphabetically by customer name. Each group has a header row (customer name) and a subtotal row showing:

• Total LC Amount for the customer
• Total Accrued Interest
• Total Fees
• Total Net Receivable
• Total Received
• Total Outstanding

When Group by Customer is disabled, all LCs appear as a flat list in date order. A grand total row is always added at the bottom of the report.

10. Sample Data and Report Output

10.1 Sample Setup

A trading company has three Export Letters of Credit for Q1 2026. The base currency is BDT.

Export Letters of Credit

Fee Breakdown

Export LC Receipts

Interest Accruals

Calculated Amounts (Base Currency BDT)

Calculations:

• ELC-001: LC Amount = 50,000 × 110 = 5,500,000 BDT. Fees = 1,500 × 110 = 165,000 BDT. Net = 5,500,000 − 165,000 = 5,335,000. Received = 48,500 × 110 = 5,335,000 BDT. Outstanding = 5,335,000 − 5,335,000 = 0.
• ELC-002: LC Amount = 30,000 × 110 = 3,300,000 BDT. Fees = 900 × 110 = 99,000 BDT. Net = 3,300,000 − 99,000 = 3,201,000. Received = 0. Outstanding = 3,201,000.
• ELC-003: LC Amount = 75,000 × 112 = 8,400,000 BDT. Fees = 2,200 × 112 = 246,400 BDT. Net = 8,400,000 − 246,400 = 8,153,600. Status = Opened (no receipts yet).

10.2 Report Output

Export LC Exposure Report
For the period: 1-Jan-2026 to 31-Mar-2026

                     LC         Cust/     LC Amount  Int Rate  Accrued     Fees  Net Recvble    Received  Outstnding  Status     Days
                   Number      Division                                  Int                                                          Out
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
 Customer A
 ELC-001          Customer A   5,500,000    5.00%     3,575    165,000  5,335,000  5,335,000          0   Documents     25   ¹
                                                                                                                         Shipped
 ELC-003          Customer A   8,400,000    5.50%         0    246,400  8,153,600          0  8,153,600   Opened         0
                  Subtotal:   13,900,000             3,575    411,400 13,488,600  5,335,000  8,153,600

 Customer B
 ELC-002          Customer B   3,300,000    4.00%       845     99,000  3,201,000          0  3,201,000   Documents      0   ²
                                                                                                                         Shipped
                  Subtotal:    3,300,000               845     99,000  3,201,000          0  3,201,000

                  Total:      17,200,000             4,420    510,400 16,689,600  5,335,000 11,354,600                      ³

Notes:

1. ELC-001: Fully received (outstanding = 0). Days Outstanding = 25 days past the 28-Feb-2026 Maturity Date (as of 25-Mar-2026 reference date). Accrued interest of 3,575 BDT recorded.
2. ELC-002: Not yet received. Maturity Date is 31-Mar-2026 which is after the reference date, so Days Outstanding is 0 (not yet past due).
3. ELC-003: Status is Opened — no GL entries generated yet. Outstanding equals full net receivable.
4. Grand Total: 17,200,000 LC Amount, 510,400 Fees, 16,689,600 Net Receivable, 5,335,000 Received, 11,354,600 Outstanding.

10.3 Verification of Calculation

EXPORT LC EXPOSURE VERIFICATION:

ELC-001 (Customer A, 50,000 USD at 110):
  LC Amount (BDT):     50,000 × 110 = 5,500,000 ✓
  Fees (BDT):            1,500 × 110 =   165,000 ✓
  Net Receivable:    5,500,000 − 165,000 = 5,335,000 ✓
  Received:            48,500 × 110 = 5,335,000 ✓
  Outstanding:      5,335,000 − 5,335,000 = 0 ✓

ELC-002 (Customer B, 30,000 USD at 110):
  LC Amount (BDT):     30,000 × 110 = 3,300,000 ✓
  Fees (BDT):              900 × 110 =    99,000 ✓
  Net Receivable:    3,300,000 − 99,000 = 3,201,000 ✓
  Received:                              0 ✓
  Outstanding:      3,201,000 − 0 = 3,201,000 ✓

ELC-003 (Customer A, 75,000 USD at 112):
  LC Amount (BDT):     75,000 × 112 = 8,400,000 ✓
  Fees (BDT):            2,200 × 112 =   246,400 ✓
  Net Receivable:    8,400,000 − 246,400 = 8,153,600 ✓
  Received:                              0 ✓
  Outstanding:      8,153,600 − 0 = 8,153,600 ✓

GRAND TOTAL:
  LC Amount:     5,500,000 + 3,300,000 + 8,400,000 = 17,200,000 ✓
  Fees:            165,000 + 99,000 + 246,400 = 510,400 ✓
  Net Receivable: 5,335,000 + 3,201,000 + 8,153,600 = 16,689,600 ✓
  Received:       5,335,000 + 0 + 0 = 5,335,000 ✓
  Outstanding:             0 + 3,201,000 + 8,153,600 = 11,354,600 ✓

11. Common Issues and Solutions

11.1 Report Shows No Data

Cause: No Export Letters of Credit exist within the selected date range, or all LCs are filtered out by Division/Project/Customer filters.

Solution: Verify that Export Letters of Credit exist with a Date within the report's From Date and To Date. Broaden or clear any Division, Project, or Customer filters.

11.2 Outstanding Is Negative

Cause: The total received (Export LC Receipts plus JE adjustments) exceeds the net receivable. This can happen if a receipt was recorded for more than the net amount, or if manual journal entries posted additional credits to the receivable account.

Solution: Review the Export LC Receipts and any manual journal entries linked to this LC. Ensure receipts do not exceed the net receivable amount.

11.3 Accrued Interest Does Not Appear

Cause: No interest accruals have been processed for this Export LC, or accruals exist for the Import LC side but not the Export LC side.

Solution: From the Export Letter of Credit view, click Accrue Interest to process the period-end accrual. Verify the LC has an Interest Rate and Maturity Date set, and that the outstanding balance is greater than zero.

11.4 Days Outstanding Is Blank When Expected

Cause: The Days Outstanding calculation requires both the Maturity Date to be in the past AND either the outstanding balance to be greater than zero or the Export LC AR Clearing balance to be non-zero.

Solution: If the LC is fully received (outstanding = 0) and the clearing balance is zero, Days Outstanding remains blank even if the Maturity Date is past. This is correct behaviour — the LC is fully settled.

11.5 Amounts Look Different from Expectations

Cause: Currency conversion may be applied if the Export LC has a foreign currency set. The exchange rate and inverse flag affect all displayed amounts.

Solution: Verify the LC Currency, Exchange Rate, and Exchange Rate Is Inverse settings on the Export Letter of Credit. Check whether the amounts are displayed in base currency as expected.

11.6 Export LC Exposure Report Not in Menu

Cause: The report may not be enabled in Customize Menu.

Solution: Go to Settings → Customize Menu and ensure Export LC Exposure Report is checked under the Reports section. Also ensure the Reports tab itself is enabled.

12. Accounting Regulation Compliance

12.1 IFRS 9 — Financial Instruments

12.2 IFRS 15 — Revenue from Contracts with Customers

12.3 IAS 23 — Borrowing Costs

12.4 IAS 1 — Presentation of Financial Statements

12.5 DR = CR Verification

GL Entry Verification for Export LC at Documents Shipped status:

  For ELC-001 (50,000 USD at 110 = 5,500,000 BDT, fees 1,500 USD):
    Dr Export LC Receivable          5,500,000    (full LC amount)
    Cr Export LC AR Clearing         5,500,000    (temporary credit)
    
    Dr LC Expense (Commission)          88,000    (800 USD × 110)
    Dr Bank Charges (Bank Fee)          44,000    (400 USD × 110)
    Dr Bank Charges (Swift)             33,000    (300 USD × 110)
    Cr Export LC Receivable            165,000    (fees reduce receivable)

  Net Export LC Receivable: 5,500,000 − 165,000 = 5,335,000 ✓
  Export LC AR Clearing: 5,500,000 (temporary)

  On Receipt (REC-001, 48,500 USD):
    Dr Cash at Bank                  5,335,000    (48,500 × 110)
    Cr Export LC Receivable          5,335,000    (clears receivable)
    
    Dr Export LC AR Clearing         5,335,000    (clears temporary credit)
    Cr Cash at Bank (contra)         5,335,000    (mirror)

  Final balance: Export LC Receivable = 0, Export LC AR Clearing = 165,000
  (165,000 BCT residual = fee portion awaiting JE adjustment)

  DR = CR verified:
    Issuance:    5,500,000 Dr = 5,500,000 Cr ✓
    Fees:          165,000 Dr =   165,000 Cr ✓
    Receipt:     5,335,000 Dr = 5,335,000 Cr ✓

End of Export LC Exposure Report Guide