When you use the Equity Method equity method of Accountingaccounting, you use the following specialized transactions rather than the transactions you typically use for trades and other transactions. However, Eagle Accounting does not allow you to process the regular non-EMA transactions, such BUY and SELL, on EMA positions. In that case, the system rejects the main transaction and all replicated transactions.
For example, an entity has two accounting bases, GAAP (primary) and STAT(secondary), and the position in the STAT basis uses the equity method of accounting. In this case you use an Equity Method type transaction for the Buy Shares Equity Method panel to submit an EMAOPEN trade, which replicates across the accounting bases. The system processes the transaction in the same way as it processes the BUY in GAAP, and it provides extra EMA logic in the STAT basis. Because the position has at least one accounting basis that uses the equity method of accounting, the system does not allow you to use the Book Trade tool's Open Equity/Mutual Fund panel to enter the BUY for that position.
You can manage transactions associated with the equity method of accounting when you:
- Assign Method the EMA/STAR accounting method to an existing position
- Convert existing positions using the Convert Positions Equity Method panelto Eagle Accounting that use the equity method of accounting.
- Book open trades to buy shares for JVLCLP securities using the Buy Shares Equity Method panelthat use the equity method of accounting.
- Book close trades for JVLCLP securities using the Sell Shares Equity Method panel.Enter adjustment transactions to sell securities that use the equity method of accounting.
- Make adjustments for impairments, new partners added, and additional investments using with the Adjust Equity Method Position panel.
- Enter transactions to adjust Adjust income (unrealized market gain/loss, undistributed income/loss, manual market value) using with the Adjust Equity Method Income panel.
- ???? with the Run Equity Method Distributions Process panel.
- Cancel equity method trades using with the Cancel Equity Method Trade panel.
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