In the Book Impairment Adjustment panel, you can adjust the booked cost for a specific lot. You can increase or decrease the cost basis based on an adjustment amount.
You can also use the Increase/Decrease Cost Adjustment panel to execute a cost adjustment. While the Book Impairment Adjustment panel only adjusts amortized cost, the Increase/Decrease Cost Adjustment panel can adjust all cost fields, However, the Increase/Decrease Cost Adjustment panel does not provide support for entities that follow International Financial Regulatory Standards (IFRS).
To process a cost adjustment:
- In Accounting Center, in the left navigation pane, click Transactions > Adjustments > Cost Adjustments > Book Impairment Adjustment.
You see the Book Impairment Adjustment panel. - Click the Impairment Processing Flag field and select a value of Lot.
- In the Entity Information section, specify an entity and accounting basis.
- Click the Impair by Option field and select a value of Amount.
- Click the Event Type field and select a value of Cost Adjustment.
- Click the Writeup/Writedown Switch field, and indicate whether the cost adjustment increases or descrease the cost basis.
Options include:
- Increase Basis/Writeup
- Decrease Basis/Writedown - Complete the remaining options on the Impairments panel.
You must indicate if the lot is long/short, identify the security and open lot, and enter the Local Cost Adjustment amount. For more information about the panel, see the impairments section in the Fixed Income Processing User Guide. - Click Submit.
After you make a cost adjustment, you can view the cost adjustment activity on the Open Adjustments tab of the Cost object within the Position Viewer tool.
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