Create a Performance Fee Expense

Setup Performance Fee

Entity ID

1163

Specifies the entity identifier for the fund. 

Entity Name

1164

Specifies the entity name for the fund.

Expense Information

Allows you to replicate expenses on an expense by expense basis and determines the receivable/payable accounts in which to post the accruals and settlements. This field is hidden. Options include:

• Replicate Expense Accruals and Settlements. Replicates the accruals and settlements across both the primary and secondary accounting bases.
• Replicate Expense Accruals and Settlements Diff Rec/Pay. Replicates the accruals and settlements, but posts them to a different receivable/payable account for each accounting basis.
• Replicate Expense Settlements Only. Creates a one time accrual record at the time of settlement, and posts it to the same receivable/payable account as the accrual basis. For more information, see the About the Replicate Expense Settlements Only Option section on this page.
• Replicate Expense Settlements Diff Rec/Pay. Creates a one time accrual record at the time of settlement, but posts it to a different receivable/payable account than the accrual basis. For more information, see Create Fixed Expense Panel Options.

Primary Expense Account Name

3252

Specifies the expense account in which to post the accruals.

Performance Fee Rule Type

12006

Identifies the type of performance fee rule the expense uses. For more information, see Understand Performance Fees. Options include:

• Current Period Variable Expense. The system calculates this fee on a daily basis. Each day you input the performance and benchmark returns and the expense process determines the new daily performance fee posting.
• Prior Period Budgeted Expense. The system calculates this fee once per calculation period (monthly, quarterly, and so on) and then spreads the calculated expense over the number of days in the calculation period.
• Prior Period Estimated Budgeted Expense. This fee is similar to the Prior Period Budgeted Expense, but has two differences. You can select a NAV comparison period for this type of fee. If you set up the fee to use average net assets of 1 year, but the fee uses a fee rule that also has a NAV Comparison Period of monthly average net assets, the procedure calculates the performance fee using both NAV components and applies the fee that is of the smaller value. Also, this type of fee always calculates a true-up amount for the prior period to ensure the fee is accurate for the prior period.

Accrual Begin Date

220

Specifies the accrual begin date. This is the start date for the performance expense.

Accrual Calculation Method

12072

Identifies the calculation method for the performance fee.

For performance fees with a rule type of Current Period Variable Expense, this option determines when the system resets the fee. For example, if you calculate the fee on a quarterly basis, the system resets the number of days in the calculation at the start of each fiscal quarter.

For performance fees with a rule type of Prior Period Budgeted Expense or Prior Period Estimated Budgeted Expense, this option determines when the system calculates the fee and how it spreads the fee. For example, if you calculate the fee on a monthly basis, then the system calculates the fee monthly and it spreads the expense over the days in the month of the next month-end period. 

 Options include:

• Monthly
• Fiscal Quarterly
• Fiscal Semi-Annually
• Fiscal Annually

Performance Fee Rule

16264

Specifies the name of the performance fee rule used for the performance fee expense. 

3256

Determines the value that the system uses to calculate the expense accrual. Options include:

• Average Net Assets. 
• User Defined NAV. For more information, see Understand User Defined NAVs.

Displays the frequency that the system uses to determine the average net asset value in its accrual calculation if you select an underlying NAV Component of Average Net Assets. This field appears if you select a NAV Component value of Average Net Assets. Options include:

• Monthly (M)
• Quarterly
• Semi Annually
• 1 Year
• 2 Years
• 3 Years
• 4 Years
• 5 Years

Indicates whether the system calculates actual or estimated average cost estimates for performance fees with a rule type Current Period Variable Expenses. This option appears if you select a Performance Fee Rule Type of Current Period Variable Expense and set the NAV Component value to Average Net Assets. Options include:

• Actual. The system determines the average net assets value from the begin date of the average net asset period to the calculation date of the performance fee.
• Estimates. The system determines the average net assets value from the begin date of the average net assets period to the end date of the average net assets period. To do so, the process uses the calculation date total net assets and uses this value for the remaining uncalculated net assets days to calculate the estimate average net assets. 

12044

Indicates the number of days that the expense uses to spread the true-up expense amount calculated at each calculation period. You must select a value when you create a performance fee with a Performance Fee Rule Type of Current Period Variable Expense or Prior Period Estimated Budgeted Expense. This field does not appear if you select a Performance Fee Rule Type of Prior Period Budgeted Expense. Options include:

• 1 Day
• Days in Month
• Days in Fiscal Quarter
• Days in Fiscal Semi
• Days in Fiscal Year

Defines the method for updating accruals related to the expense's spread. Option includes:

• Accrual Carry Forward. The system carries forward expense accruals from a prior period to a current period. On the last day of the current calculation period for a performance fee, the expense process creates a pending fee for the next calculation period. For performance fees with a rule type of Current Period Variable Expense, the system puts the pending true-up entry into a pending status, while it puts the new period accrual into an active status. 
• Manual Update. The system does not carry forward expense accruals from a prior period to a current period. You can manually set up a new expense at the end of each calculation period.