About Income Reporting and the Equity Method of Accounting
In Eagle Accounting, Income reporting traditionally uses Income records from which to derive the report values. However, for positions that use the equity method of accounting, you manually derive Equity/Cost Method income, and the system does not store corresponding Income records in the Income object. As a result, most Income reports in the Investment Accounting standard report package do not report income for equity method positions. You can use the EMA Earned Income report to report on income for these positions.
Holdings Report and the Equity Method of Accounting
When you use the Holdings report with positions that use the equity method of accounting, the Show All results include the Ownership Percentage and Commitment. It also shows the EMA/Cost Flag value to identify the accounting method used. The report does not derive the Amortized Cost field amount. Instead, the system uses the values from Amortized Cost Local (tag 4601) and Amortized Cost Base (tag 4602) on the position level, which it calculates when it processes transactions.
Ledger Subledger Reconciliation Report and the Equity Method of Accounting
The Ledger Subledger Reconciliation report reflects the ledger accounts specific to the equity method of accounting. Each account is mapped to a subledger entry in the system.
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WRITERS NOTE: add XREF to ledger entries anchor |
Portfolio Valuation Report and the Equity Method of Accounting
If you believe that the current book value does not equal market value for your investment, you can override the market value. In the Adjust Equity Method Income panel, you can manually override the market value that Eagle Accounting calculates for market value in core accounting reports for a position that uses the equity method of accounting. You can specify a Market Value Local (tag 16139) and Market Value Base (tag 16140) value in the adjustment panel. The Portfolio Valuation report displays Market Value based on these fields, and rather than calculating Market Value, the report backs into the Unrealized Gain/Loss amount. If you do not specify the Market Value on the equity method position, the report calculates it as usual. In addition, when the report calculates Unrealized Gain/Loss, it adds the value from tags 16090 and 16091 (UNREALIZED INCOME/LOSS L/B) to the generic Market/Currency fields to derive the total Gain/Loss.
Realized Gain Loss Report and the Equity Method of Accounting
The Realized Gain Loss report can provide information about the currency gain/loss accounts used for distributions associated with equity method positions. Capital and income accounts associated with these currency gain/loss accounts are dependent on the transaction's EMA Treatment (STAT, Other) and the Equity/Cost Flag (EMA, STAR) values.
Trade Activity Report and the Equity Method of Accounting
The EMAADJUST event can apply to income adjustments, cost adjustments, distributions, and EMA activation for equity method positions. The system uses the Reason code (tag 56) to track these purposes as EMAINC, EMACOST, EMADIST, and EMAACT. The Trade Activity report maps tag 56 into the transaction code when tag 55 is equal to EMAADJUST.
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WRITERS NOTES: continue with FSD section 5.4 |
PRESENTATION SLIDE:
Statutory Schedules and Exhibits
- Updated to support Equity Method Accounting Activity
STAR TO PACE IMPACT: BT140557 perf cash flows:
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'CMADIST', 'Negative', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'ECCONV', 'Positive', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMAADDINV', 'Positive', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMACLOSE', 'Negative', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMACONV', 'NoFlow', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMADIST', 'Negative', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMAIMPAIR', 'NoFlow', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMAINC', 'NoFlow', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMANEWPART', 'NoFlow', '0', null, null);
pace_masterdbo.edr_code_values_sp ('STAR_PERF_FLOW', '4', 'EMAOPEN', 'Positive', '0', null, null);