Understand Security Level Expenses

Security level expenses allow you to accrue and post security level contra expenses based off of a single security's prior day's market value. Security level expenses are similar to variable expenses, but use a contra expense that is a receivable calculated based on the market value of a particular security. In contrast, variable expense processing uses a NAV component of the entity. 

The system calculates security level expenses in the same manner it calculates variable expenses, as follows:

(dollar amount * rate) / actual days in year

Unlike variable expenses, which use the entity's Net Assets as the starting point, security level expenses use the market value of a specific security. The system determines this market value by summing the security's prior day local amortized cost and local gain/loss. 

Because these are contra expenses, the system posts them to the ledger like receivables rather than like payables. 

Custom ledger accounts can use the receivable/payable category, CONTRA EXPENSE, to distinguish security level expenses from other expense types. You can use the Define a Rec/Pay Event panel to create a receivable/payable event that uses the CONTRA EXPENSE receivable/payable category.