Set Up Entities for Cash-Based Dividend Income
You can set up the Cash Based Div Recognition Flag field (tag 16160) and the FX Election for Cash Div Recognition field (tag 16161 in the panels where you define entities, master funds, and accounting bases as follows. For example, you find these basis-level options that apply to recognizing cash-based dividend income in the Create/Edit Entity panel, the Add a Basis to a Portfolio panel, and the Create Master Fund panel.
Option | Tag | Description |
|---|---|---|
| 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:
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| 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:
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Set Up Security Processing Rules for Cash-Based Divided Income
If you want to exclude securities such as RICs and REITs from recognizing income on a cash settlement basis, you can create security processing rules for those securities that override the basis-level election so that the system recognizes cash on an ex-date basis rather than on a cash settlement basis. You can set up the Cash Based Div Recognition Flag field (tag 16160) and the FX Election for Cash Div Recognition field (tag 16161 in the panels where you define security processing rules so that the security processing rule has the Cash Based Div Recognition Flag set to No.
A security processing rule can control whether the system recognizes cash-based or settlement-based dividend income in effect for that security. You can apply this rule at the security or entity level, as follows:
- Assigned at Security Level. If the security processing rule applies to a security across all entities and accounting bases in Eagle Accounting, you can directly assign the security processing rule to an individual security. For example, use the Security Processing Rule Name (tag 3197) field for the security record.
- Assigned to Entity Processing Rule Assigned at Entity Level. Otherwise, if you apply the security processing rule for the security only when processing specific entities or accounting bases, you can assign the security processing rule at the entity/accounting basis level. You do this by creating an entity processing rule that identifies one or more securities and includes the security processing rule, and then assigning the entity processing rule to a portfolio or accounting basis.
Set Up Securities for Cash-Based Divided Income
The ability to recognize dividend income on a cash settlement basis does not apply to Registered Investment Company (RIC) and Real Estate Investment Trust (REIT) securities, as a general rule, If you want to have the system exclude RICs and REITs when you recognize cash-based dividend income, you must identify the RIC and REIT securities you want to exclude.
If you use Reference Data Center to set up securities, you can use the RIC Flag and REIT Flag options to identify securities as RICs and REITs. Otherwise. if you use Issue Viewer with Eagle Accounting, the following fields are available in the Equity/Mutual Fund panel under Equity/Mutual Fund Flags.
Option | Tag | Description |
|---|---|---|
| RIC Flag | 1445 | Indicates whether the security is issued from a Registered Investment Company (RIC). Options include:
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| REIT Flag | 16159 | Indicates whether the security is a Real Estate Investment Trust (REIT). Options include:
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Process Corporate Actions for Cash-Based Dividend Income
During corporate action processing for an accounting basis where you set Cash Based Div Recognition Flag to No, the system recognizes all cash dividends and associated tax/reclaim in the accounting ledger on the accounting date that coincides with the ex-date of the cash dividends.The system generates traded cash events from the corporation action.
During corporate action processing for an accounting basis where you set Cash Based Div Recognition Flag to Yes, the system recognizes all cash dividends and associated tax/reclaim in the accounting ledger upon the settlement date of the associated cash. The system generates traded cash events from the corporate action that identify the election for ex-date or settlement date income recognition and the associated FX rate ex-date or settlement date election. These fields enable the system to exclude the records from the mapping for Ledger to Sub Ledger (LSL) Reconciliation Report reporting. This avoids unnecessary LSL mistaches because the system still writes the cash records to the object/database based on the ex-date.
If you created a security processing rule to override the basis-level setting for specific securities, the system determines when an override rule exists that allows it to recognize dividend income on ex-date even though the basis-level election is for the cash settlement date.
Set Up Reports for Cash-Based Dividend Income
Several reports were updated to ensure this new cash dividend recognition method is correctly reflected. These reports include Traded Cash Activity, Dividend Income, Consolidated Earned Income, Ledger Sub-Ledger Recon, and Unsettled Transactions.
You can select the following related option during report setup in the Dividend Income Report panel, the Traded Cash Activity Report panel,
Option | Tag | Description |
|---|---|---|
| Cash Based Dividend Income Recognition Reporting | 9152 | Indicates whether the report output. Options include:
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Consolidated Earned Income Report panel ?????????????????????????
Ledger Subledger Reconciliation Report panel ??????
Unsettled Transactions Report
You can select the following related option during report setup in the Dividend Income Report panel, the Traded Cash Activity Report panel,
Option | Tag | Description |
|---|---|---|
| URGL on Cash Based Dividend Income | 9152 | Indicates whether the report output. Options include:
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Set Up Control Center for Cash-Based Dividend Income
In Control Center, the EPDIT edit test was updated. This edit test leverages the Past Due Interest report (SPRECEIVABLEPAYABLEREPORT), and compares the report output results to a user defined day tolerance. If the interest receivable balance is past due (unsettled) and exceeds the tolerance setting, a raised edit test result is delivered to Control Center. An alert is generated for each day that the receivable balance remains unsettled.BLEREPORT), and compares the report output results to a user defined day tolerance. If the interest receivable balance is past due (unsettled) and exceeds the tolerance setting, a raised edit test result is delivered to Control Center. An alert is generated for each day that the receivable balance remains unsettled.
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