Example A illustrates the Daily Life-to-Date Calculation, the first Eagle Accounting processing principle.
The security that follows was purchased into entity TaxDemo2, with a Trade Date and Settle Date on 20140401; Par is 1,000,000.00 and it has accrued for 3 days, to 20140404.
The following tables describe the security, entity, and global tax table information used for this example.
Security Master Information Option | Value |
|---|---|
Issue Name | FI Issue Tax Type Change |
Description | FI Issue Tax Type Demo |
Ticker | FIITTD |
Primary Asset ID | 555555555 |
Processing Security Type | DBIBFD |
Issue Date | 20091015 |
Dated Date | 20091015 |
First Coupon Date | 20100415 |
Last Coupon Date | 20180415 |
Maturity Date | 20181015 |
Coupon Type Code | Fixed |
Coupon Rate | 5.00 |
Day Count Basis | 30/360 |
Issue Country | United Kingdom |
Payment Frequency | Monthly |
Issue Tax Type | Standard |
Primary Exchange | London |
Entity Information Option | Value |
|---|---|
Entity ID | TAXDEMO2 |
Portfolio Country | United States |
Amortizing | Constant Yield 2 |
Accrue Tax Indicator | Yes |
Entity Tax Type | MF (Mutual Fund) |
Entity Tax Qualifier | Level 1 |
Global Tax Table Information | |||||||||
|---|---|---|---|---|---|---|---|---|---|
Begin Date | End Date | Portfolio Country | Issue Country | Entity Tax Type | Entity Tax Qualifier | Issue Tax Type | Primary Exchange | Tax W/H | Tax Reclaim |
20090101 | US | UK | MF | Level 1 | All | ALL | 10.00 | 5.00 | |
20090101 | US | UK | MF | Level 1 | Standard | London | 7.50 | 2.50 | |
20090101 | US | UK | MF | Level 1 | Special | ALL | 5.00 | 1.00 | |
20090101 | US | UK | MF | Level 1 | Special | London | 12.5 | 10.00 |
Now you change the Issue Tax Type from STANDARD to SPECIAL, accrued to 20140405.
Results
In this scenario, Eagle Accounting applies the new applicable Tax Withholding rate and Tax Reclaim rate for the period, and then recalculates the tax withholdings and tax reclaim numbers for the period.
Eagle Accounting can now apply the Tax Withholding rate of 12.5% (from 7.5%), and can apply a Tax Reclaim rate of 10.00% (from 2.5%) for the current coupon period, the next time earnings are run on 20140405. Because you run the accrual on 20140405, the change appears on the general ledger and sub ledger, as of 20140405.
If you want to have this change occur on 20140401 (settlement date of the trade) on the general ledger (assuming accounting periods are open) and sub ledger, you can roll back the earnings to 20140401, and then replay earnings to 20140405.
You can roll back earnings using the Run Income Accruals panel, located in Global Processes. You must set the Allow Earnings Rollback field (tag 1257) to Yes for Eagle Accounting to rollback earnings. Earnings rollback can only be performed at the "One Entity" level.
The following table shows the result of local earning values after the issue tax type change.
Trade Date | Acct. Date | Tax W/H Rate | Tax Reclaim Rate | Traded Interest Local | Accrual Delta Local | Tax Expense | Tax Reclaim Amount Local | Tax Reclaim Receivable Delta |
|---|---|---|---|---|---|---|---|---|
Apr 01 2014 | Apr 01 2014 | 7.500 | 2.500 | 23,055.56 | 138.88 | 1,159.72 | 579.86 | 579.86 |
Apr 02 2014 | Apr 02 2014 | 7.500 | 2.500 | 23,055.56 | 138.89 | 1,166.67 | 583.33 | 3.47 |
Apr 03 2014 | Apr 03 2014 | 7.500 | 2.500 | 23,055.56 | 138.89 | 1,173.61 | 586.81 | 3.48 |
Apr 04 2014 | Apr 04 2014 | 7.500 | 2.500 | 23,055.56 | 138.89 | 1,180.56 | 590.28 | 3.47 |
Apr 05 2014 | Apr 05 2014 | 12.500 | 10.000 | 23,055.56 | 138.89 | 593.75 | 2,375.00 | 1,784.72 |
If the accounting periods are not open for 20140404 and you want to roll back and replay earnings, you have two options, described in the following sections.
In the prior table, the system calculated the Traded Interest amount as follows:
Round ( 1,000,000.00 * 5% / 360 * 166 ) = 23,055.56
This Traded Interest calculation used the following values:
| Start of Coupon | Oct 15 2013 |
| Settlement Date | Apr 01 2014 |
| Days Until Settlement Date | 166 |
| Par` | 1,000,000.00 |
| Coupon Rate | 5.00 % |
| Daily Accrual | 360 |
| Days in Period | 166 |
| Traded Interest | 23,055.56 |
If the accounting periods are not open for 20140404 and you want to roll back and replay earnings, you have two options.
Option 1 for Rollback and Replay
If the accounting periods are not open for 20140404 and you want to roll back and replay earnings, you can use this option.
Do the following:
- Reopen the prior period and roll back the earning to 20140404.
- Apply the earnings for 20140404.
- Close the period for 20140404.
- Apply the earnings to 20140405.
Option 2 for Rollback and Replay
If the accounting periods are not open for 20140404 and you want to roll back and replay earnings, you can use this option.
Eagle Accounting rolls back earnings to 20140404, and replays the earnings to 20140405. Eagle Accounting still tracks and displays the change in earnings caused by the rollback and replay of earnings with a Trade Date and Earn Thru Date from the event, but displays an Accounting Date of 20140405.
For example, earnings for 20140404 have a Trade Date and Earn Thru Date of 20140404, but an Accounting Date of 20140405. Earnings for 20140405 have a Trade Date and Earn Thru Date of 20140405 and an Accounting Date of 20140405.
The only difference between Option 1 and Option 2 is what Accounting Date reflects the change.
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