A security processing rule defines a set of income characteristics that you can apply to a security. It controls Security processing rules control the income processing needed for instruments such as redeemable preferred stock. If you want to amortize redeemable preferred stock, you must create a security processing rule. For more information, see Understand Redeemable Preferred Stock. You can also set up security processing rules to ensure that certain securities recognize settlement-based dividend income when you set up an accounting basis to recognize cash-based dividend income. 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 basis processing rule that you then assign at the portfolio/basis level.For more information, see Recognize Dividend Income on a Cash Settlement Basis.
To create a security processing rule:
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.Complete the options on the Create Security Processing Rule panel.
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 a basis processing rule that you then assign at the portfolio/basis level.
Create Security Processing Rule Panel Options
In the Create 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 | Specifies the unique name of the security processing rule that controls processing for a security. Required. |
Accrual Flag | 2932 | Determines if the security associated with this rule is eligible for accrual processing. This field is for information only; Eagle Accounting does not use this value during processing. Options include Yes or No. |
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. This field is for information only; Eagle Accounting does not use this value during processing. Options include:
|
Post Daily Income Flag | 2934 | Determines if Eagle Accounting posts daily income receivables to the general ledger. This field is for information only; Eagle Accounting does not use this value during processing. Options include Yes or No. |
Auto Drop Income Flag | 2935 | Determines if the Earnings process automatically drops the appropriate income type. This field is for information only; Eagle Accounting does not use this value during processing. Options include Yes or No. |
Maturity Type | 2962 | Specifies the type of maturity transaction to use for securities associated with this rule. Options include:
|
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:
|
URGL Security Grouping | 917 | Specifies the name of a group of securities that share the same characteristics when the security processing rule criteria identify a group of securities intended for use with a URGL rule. After you set up the security processing rule and name the URGL security grouping, you can select that URGL security grouping when you define a URGL rule. |
Cash Based Div Recognition Flag | 16160 | Indicates whether to process cash dividend income, tax, and reclaim in the accounting ledger on ex-date or upon the settlement of the associated cash. Options include:
|
FX Election for Cash Div Recognition | 16161 | If |
you recognize dividend income on a cash settlement basis. |
indicates whether the system selects the FX rate used for foreign dividend settlement using the ex-date FX rate or the settlement date FX rate. It applies only to the settlement of dividends issued by a foreign security. This field appears if you set the Cash Based Div Recognition Flag field to a value of Yes. Options include:
|