In the Run Equity Method Distributions Process panel, you can process distributions transactions to record Return of Income or Investment Income for a single position that uses the equity method of accounting. You must enter a separate transaction for each accounting basis where you want to process distributions. You can process distributions for the position's accounting bases that have an Equity Method (EMA) accounting method as well as for the position's accounting bases assigned a core STAR (STAR) accounting method.
In this panel, you can enter values for Return of Capital and Investment Income. These values cannot exceed the Current Cost or Unrealized Income/Loss balances on the position, respectively. The system calculates the base values for Return of Capital and Investment Income based on the FX Rate and Blended Income FX Rate, respectively. The system splits out any realized currency gains/losses into separate accounts, to track the realized capital and realized income gains/losses independently. For the EMA Treatment of Other, any income received also reduces the cost value of the position. For the EMA Treatment of STAT, the system accounts for undistributed income separate from cost. Positions that use the STAR accounting method do not have any Undistributed/Unrealized Income to distribute, but simply offset Investment Income and/or Cost of Investments.
The Run Equity Method Distributions Process panel differs from the panels that you use to process distributions for positions that do not use the equity method of accounting. If any accounting basis for a position uses the equity method of accounting, you must use the Run Equity Method Distributions Process panel to record Return of Income or Return of Capital activity for the position.
To process distributions for a position that uses the equity method of accounting:
- In Accounting Center, in the left navigation pane, click Transactions > Equity Method > Run Equity Method Distributions Process.
You see the Run Equity Method Distributions Process panel. - Under Entity Information, select the entity and accounting basis for the position.
You must select an entity that has at least one accounting basis with an EMA Treatment of Other or STAT assigned. - Under Security Information, select the security.
You can select a position with an EMA Cost Flag value of EMA or STAR. - Under Accounting Information, enter the effective date, accounting date, and settlement date for the activity to process.
For positions with an EMA Treatment of STAT, you see the current balances for Cost and Unrealized Income/Loss. For positions with an EMA Treatment of Other, you see the current balances for Undistributed Investment Income. - If you are recording activity for return of capital, under Return of Capital, specify a value in the Local Cost Amount box.
For foreign securities, you can also define the FX Rate to set the base amount. - If you are recording activity for return of income, under Return of Income, specify a value in the Distributed Investment Income Local box.
- Click Submit.
The system books a distribution with an EMAADJUST event and a reason code of EMADIST or STARDIST. The system allocates Cash and Investment Income for the transaction pro-rata based on lot quantity on the trade date of the distribution. It creates a Traded Cash record for the Income receivable.
Run Equity Method Distributions Process Panel Options
The following are the key options in the Run Equity Method Distributions Process panel. Note options may vary according to your selections.
| Option | Tag | Description |
|---|---|---|
| Entity Information | ||
| Entity ID | 1163 | Specifies the unique identifier of the entity. |
| Entity Name | 1164 | Specifies the name of the entity. |
| Base Currency | 86 | Displays the base currency of the entity. |
| Accounting Basis | 21 | Specifies the accounting basis for the entity. You see the primary accounting basis for the entity by default. You can select a secondary basis from the lookup. |
| EMA Treatment | 16084 | Displays the Equity Method Treatment field value for the selected accounting basis, which identifies the treatment of assets held under the equity method of accounting. Options include STAT Treatment and Other Treatment. |
| Security Information | ||
| Long/Short Indicator | 15 | Displays an L (long) or S (short) to indicate whether the position is long or short. |
| Cross Reference Type | 1234 | Specifies the cross reference type associated with the security. |
| Cross Reference ID | 1233 | Specifies the cross reference identifier associated with the security. |
| Issue Name | 961 | Specifies the name of the security. You can choose a security with a processing security type of Common Stock (EQCSCS) or Joint Venture/Limited Liability/Partnership (JVLCLP). |
| Ticker | 13 | Specifies the trade ticker of the security. |
| EMA Cost Flag | 16092 | Displays the accounting method for the accounting basis/security. Values include Equity Method (EMA) or the STAR method of accounting (STAR). |
| Instrument Type | 11 | Displays the instrument type. A security with a processing security type of Common Stock (EQCSCS) has an Instrument Type of Equity (EQ). A security with a Joint Venture/Limited Liability/Partnership (JVLCLP) processing security type has an Investment Type of Equity/Cost Method (EC), |
| Security Type | 82 | Displays the security type of the asset. |
| Issue Currency | 85 | Displays the local currency of the security. |
| Accounting Information | ||
| Transaction Notes | 56 | Displays the reason for the distribution event. For example, EMADIST, STARDIST. |
| Acquisition Date | 216 | Displays the date that the position was originally acquired. |
| Effective Date | 35 | Specifies the effective date of the transaction. The trade date cannot be greater than the post date, accounting date, or settlement date. |
| Accounting Date | 36 | Specifies the date the transaction is reported and has an effect on the entity's holdings and cash balances. The accounting date must be greater than the trade date. |
| Monthly Accounting Date | 4733 | Displays the month end accounting date. |
| Settlement Date | 37 | Specifies the date the transaction is settled. |
| Position Quantity | 122 | Displays the current quantity of the position. |
| Quantity Type | 12 | Displays the quantity generally accepted as a standard for exchange for the security. When you select a security with a processing security type for Common Stock (EQCSCS), this field displays Shares. When you select a security with a processing security type of JVLCLP (Joint Venture/Limited Liability/Partnership), values can include Shares, Units, or Percentage. |
| Local Unit Cost | 124 | Displays the average unit cost of the position in local currency. |
| Base Unit Cost | 125 | Displays the average unit cost of the position in base currency. |
| Local Current Cost | 128 | Displays the current identified cost basis in local currency. |
| Base Current Cost | 129 | Displays the current identified cost basis in base currency. |
| Return of Capital | ||
| Local Cost Adjustment | 50 | Specifies the net amount of the transaction in local currency. This value cannot exceed the Current Cost balance on the position. |
| Trade Date Fx Rate | 87 | Specifies the asset currency to portfolio base currency exchange rate. This value is expressed as units of asset currency to one unit of portfolio base currency. This field is available when the base currency and issue currency differ. |
| Base Cost Amount | 478 | Displays the base currency amount of the transaction amount. This field appears when the base currency and issue currency differ. |
| Return of Income | ||
| Current Unrealized Undistributed Income L | 7350 | Displays the position's current unrealized undistributed income in local currency. The STAT EMA treatment accounts for undistributed income separate from cost. This field appears for positions with an EMA Treatment and accounting method of STAT/EMA. |
| Current Undistributed Investment Income L | 7351 | Displays the position's current undistributed investment income in local currency. This field appears for positions with an EMA Treatment and accounting method of Other/EMA. |
| Current Unrealized Undistributed Income B | 7430 | Displays the position's current unrealized undistributed income in base currency. This field appears for positions with an EMA Treatment and accounting method of STAT/EMA. |
| Current Undistributed Investment Income B | 7431 | Displays the position's current undistributed investment income in base currency. This field appears for positions with an EMA Treatment and accounting method of Other/EMA. |
| Distributed Investment Income Local | 16124 | Specifies the dividend investment income amount in local currency to use for the transaction. This value cannot exceed the Unrealized Income/Loss balance on the position. This field appears for positions with an EMA Treatment and accounting method of STAT/EMA, Other/EMA, and Other/STAR. |
| Distributed Investment Income Base | 16125 | Displays the dividend investment income amount in base currency to use for the transaction. This field appears when the base currency and issue currency differ. |
| Total Return Local | 7352 | Displays the total return in local currency. This field appears for positions with an EMA Treatment and accounting method of Other/EMA and Other/STAR. |
| Total Return Base | 7452 | Displays the total return in base currency. This field appears for positions with an EMA Treatment and accounting method of Other/EMA and Other/STAR. |
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