Security level expenses allow you to accrue and post security level contra expenses based off of a single security's prior day's market value. Security level expenses are similar to variable expenses, but use a contra expense that is a receivable calculated based on the market value of a particular security. In contrast, variable expense processing uses a NAV component of the entity.
The system calculates security level expenses in the same manner it calculates variable expenses, as follows:
(dollar amount * rate) / actual days in year
Unlike variable expenses, which use the entity's Net Assets as the starting point, security level expenses use the market value of a specific security. The system determines this market value by summing the security's prior day local amortized cost and local gain/loss.
Because these are contra expenses, the system posts them to the ledger like receivables rather than like payables.
| DR | Accounting Fees Contra-Expense Receivable | 13.70 | ||
| CR | Accounting Fees Contra Expense | 13.70 |
Custom ledger accounts can use the receivable/payable category, CONTRA EXPENSE, to distinguish security level expenses from other expense types. You can use the Define a Rec/Pay Event panel to create a receivable/payable event that uses the CONTRA EXPENSE receivable/payable category.