This chapter describes how to set up and work with redeemable preferred stock. Redeemable preferred stock, also known as callable preferred stock, refers to a type of stock or share that is subject to being returned to the issuing organization on or after a specific date at a certain price and retired. You can configure Eagle Accounting to amortize redeemable preferred stock at the security level.
Topics Covered in This Chapter
- About Reference Data for Redeemable Preferred Stock
- Setting Up Amortization Rules
- Adding Security Processing Rules
- Setting Up Entity Basis Processing Rules
- Adding a Redeemable Preferred Stock Security
About Reference Data for Redeemable Preferred Stock
...
Note: | If you amortize redeemable preferred stock, be aware that Eagle Accounting does not perform Accrual processing for redeemable preferred stock. |
...
Set Up Security Processing Rules
If you want to amortize redeemable preferred stock, you must create a security processing rule. A security processing rule defines a set of income characteristics that you can apply to a security. It controls the income processing needed for instruments such as redeemable preferred stock. For more information, see Manage Security Processing Rules.
To add create a security processing rule for use in amortizing redeemable preferred stock:
...
- Do one of the following:
...
-
- In Portfolio Data Center, in the left navigation pane, click Portfolio Desk > Accounting Portfolio Rules > Amortization & Accretion > Create Amortization & Accretion Rules.
- In Accounting Center, in the left navigation pane, click Setup > Portfolio Rules > Amortization & Accretion > Create Security Processing Rule.
You see the
...
- Create Security Processing Rule panel.
...
- Enter the Rule Name, Amortization Flag, and Maturity Type, as needed, which are actively used in processing.
You can also set the remaining options in the panel to reflect the characteristics of the identified security for use in processing. - Click Submit.
After you define the security processing rule, you can assign this rule at the security level if the rule applies to the security across all entities/accounting bases. Otherwise, you can assign this rule to an entity a basis processing rule that you then assign at the portfolio/basis level.
Add Security Processing Rule Panel Options
In the Add Security Processing Rule panel, when you add a security processing rule, you can select various options based on the requirements of your business.
...
Option
...
Tag
...
Description
...
Rule Name
...
3197
...
(Required) Specifies the unique name of the security processing rule that controls processing for a security.
...
Accrual Flag
...
2932
...
Determines if the security associated with this rule is eligible for accrual processing. Options include Yes or No.
Note: This field is for information only; Eagle Accounting does not use this value during processing.
...
Amortization Flag
...
11104
...
Determines if the security associated with this rule is eligible for amortization. Options include Yes or No.
...
Income Type
...
2933
...
Determines if Eagle Accounting creates dividends or coupons for the security associated with the rule. Options include:
- Coupon
- Dividend
- None
Note: This field is for information only; Eagle Accounting does not use this value during processing.
...
Post Daily Income Flag
...
2934
...
Determines if Eagle Accounting posts daily income receivables to the general ledger. Options include Yes or No.
Note: This field is for information only; Eagle Accounting does not use this value during processing.
...
Auto Drop Income Flag
...
2935
...
Determines if the Earnings process automatically drops the appropriate income type. Options include Yes or No.
Note: This field is for information only; Eagle Accounting does not use this value during processing.
...
Maturity Type
...
2962
...
Specifies the type of maturity transaction to use for securities associated with this rule. Options include:
- Expire
- Maturity
- None
...
PFIC Flag
...
2906
...
Indicates whether this rule applies to securities with PFIC (passive foreign investment companies) security eligibility. Dividends from PFICs, foreign personal holding companies, and foreign investment companies are not qualified income dividend (QDI) eligible. This field is for informational purposes; it does not affect processing or reporting. Options include:
- No. The security processing rule does not apply to securities that have their PFIC Flag (tag 2906) field set to a value of Yes.
- Yes. The security processing rule applies to securities that have their PFIC Flag (tag 2906) field set to a value of Yes.
...
URGL Security Grouping
...
917
...
.
Setting Up Entity Basis Processing Rules
...
If you want the entity basis processing rule to apply to additional securities, use the pane that appears on the bottom of the Add Entity Basis Processing Rule panel, as follows:
- Click the lower pane.
- Right-click and select Add Rows.
- Enter the number of rows you want to add in the Add Rows dialog box and click OK. You need to add a row for each additional security you want to associate with the rule.
- Complete the fields on each row you added.
- Click Submit.
- After you create an entity basis processing rule, associate the rule with the appropriate portfolio/accounting basis (or multiple portfolios/bases).
...