Sell Shares with the Equity Method of Accounting

In the Sell Shares Equity Method panel, you can manually close a security when one or more accounting bases hold that security using the equity method of accounting. You can use this panel to sell shares for a position for a common stock or Joint Venture/Limited Liability/Partnership security for all accounting bases set up for the entity in Eagle Accounting.

The Sell Shares Equity Method panel differs from the Close Equity Mutual/Fund panel that you can access in the Book Trade tool. If any accounting basis for a position uses the equity method of accounting, you must use the Close Shares Equity Method panel to book an Close transaction for all accounting bases in effect for the position. The system closes securities held in accounting bases that use the equity method of accounting, using the Pro-Rata lot selection method, such that the close transaction proportionally closes any Unrealized Market, Unrealized F/X, UNREALIZED INCOME/LOSS, and Undistributed Income amounts on the position, and reallocates the remaining amounts to any open lots. The system uses the basis-level lot selection method for any accounting bases that use the STAR accounting method.

This article assumes you are familiar with the entity and security level elections that have been made for processing a common stock or Joint Venture/Limited Liability/Partnership security when you use the equity method of accounting.

To manually sell shares for a security that uses the equity method of accounting:

In Accounting Center, in the left navigation pane, click Transactions > Equity Method > Sell Shares Equity Method.
You see the Sell Shares Equity Method panel.
Under Entity Information, select the entity associated with the equity method of accounting.
You must select an entity with at least one accounting basis with an EMA Treatment of Other or STAT assigned.
Under Issue Information, enter the effective date and accounting date for the transaction, and select the security.
Complete the remaining options on the panel.
Click Submit.
The system submits an EMACLOSE event. Once the system processes a transaction for a STAR basis, it follows all core accounting processes. Once the system processes a transaction for an EMA basis, it follows accounting processes for the equity method of accounting. It also creates a cash disbursement record.

Sell Shares Equity Method Panel Options

The following are the key options in the Sell Shares Equity Method panel. Note options may vary according to your selections.

Option	Tag	Description

Option	Tag	Description
Entity Information
Entity ID	1163	Specifies the unique identifier of the entity.
Entity Name	1164	Specifies the name of the entity.
Base Currency	86	Displays the base currency of the entity.
Issue Information
Trade Date	35	Specifies the effective date of the trade. The trade date cannot be greater than the post date, accounting date, or settlement date.
Accounting Date	36	Specifies the date the trade is reported and has an effect on the entity's holdings and cash balances. The accounting date must be greater than the trade date.
Monthly Accounting Date	4733	Displays the month end accounting date.
Settlement Date	37	Specifies the date the trade is settled.
Event Type	55	Displays the business intent of the transaction. For example, EMACLOSE.
Long/Short Indicator	15	Displays an L (long) or S (short) to indicate whether the position is long or short.
Cross Reference Type	1234	Specifies the cross reference type associated with the security.
Issue Name	961	Specifies the name of the security. You can choose a security with a processing security type of Common Stock (EQCSCS) or Joint Venture/Limited Liability/Partnership (JVLCLP).
Ticker	13	Specifies the trade ticker of the security.
Cross Reference ID	1233	Specifies the cross reference identifier associated with the security.
Instrument Type	11	Displays the instrument type. A security with a processing security type of Common Stock (EQCSCS) has an Instrument Type of Equity (EQ). A security with a Joint Venture/Limited Liability/Partnership (JVLCLP) processing security type has an Investment Type of Equity/Cost Method (EC),
Security Type	82	Displays the security type of the asset.
Issue Currency	85	Displays the local currency of the security.
Accounting Information
Position Shares	122	Displays the current quantity of the position.
Shares	40	Specifies the traded quantity of the security. The value must be greater than zero. This field appears if the Quantity Type field displays a value of SHARES or UNITS. If the security has a quantity type of Shares or Units, you must specify a value.
Ownership Percent	16085	Specifies the percentage of ownership in a partnership, joint venture, or limited liability company to use for the transaction. If the security has a quantity type of Percentage, you must specify a value greater than 0 and less than 100. If the security has a quantity type of Shares or Units, you can specify a value that the system uses for information only.
Current Ownership Percentage	7660	Displays the current ownership percentage for the position.
Quantity Type	12	Displays the quantity generally accepted as a standard for exchange for the security. When you select a security with a processing security type for Common Stock (EQCSCS), this field displays Shares. When you select a security with a processing security type of JVLCLP (Joint Venture/Limited Liability/Partnership), values can include Shares, Units, or Percentage.
Price Per Share	45	Specifies the trade price per share. The value must be greater than zero.
Principal	165	Displays the principal amount based on the following formula: (Current Shares * Quantity Scale) * (Price * Price Factor)). This product is rounded to the local currency precision.
Implied Commission Indicator	78	Indicates if commission is included in the price. Options include No and Yes.
Commission	47	Specifies the amount of the trade commission.
SEC Fee	48	Specifies the SEC fee. The system calculates the SEC fee if certain criteria is met.
Tax Amount	46	Specifies the tax amount on the transaction.
Stamp Duty Tax	51	Specifies the stamp duty amount on the transaction.
Other Fee	3752	Specifies any additional fees on the transaction.
Local Net Amount	50	Displays the net amount of the trade based on the following formula: Principle + Fees.
Settlement Currency	63	Specifies the currency in which the trade is settled.
Settlement Net Amount	64	Displays the actual settled amount of the trade. The value must be greater than zero.
Local to Base FX Rate	87	Displays the foreign exchange rate used to calculate the net base amount. The value must be greater than zero.
Base Net Amount	478	Displays the base amount of the trade. This amount is calculated based on the following formula: Local Net Amount / Local to Base FX Rate. The value must be greater than zero.
Lot Selection Method	27	Specifies the lot selection method that the system uses to relieve (sell) lots of a security held by the entity for accounting bases that use the STAR accounting method. For accounting bases that use the equity method of accounting, the system uses the Pro-Rata lot selection method, closing each open lot in the position proportional to the close transaction. Options include: First In First Out (FIFO). Lots acquired first are sold first. The oldest lot is sold first based on the holding date. If you set the accounting basis Cost Basis Covered Indicator field (tag 2818) to Y, unknown cost lots are relieved first. The oldest cost lot is sold first based on the holding date. Last In First Out (LIFO). Lots acquired last are sold first. The most recent lot is sold first based on the holding date. If multiple lots share the same holding date, the lot with the greatest event sequence is relieved first. The event sequence, set internally by the system, indicates the processing order of transactions within the same position. Identified Lot (IDLOT). The specified lot or lots are sold first, which determines cost and tax implications. You can optimize this option to specific tax situations by selecting the specific lots to be sold. If you select this method, the lower pane in the panel displays lot details for each available lot, as determined by the entity's controlling basis. If no controlling basis exists, it displays lots for the primary basis. You must specify the quantity for one or more lots that you want to relieve. The total quantity you specify for the open lots must match the quantity entered for the total close. The close trade relieves the selected lots in each of the entity's accounting bases, and keeps the lot structures in sync. The system uses the lot's Orig Event ID field (tag 457) to match a single open lot in one basis to corresponding multiple open lots in another basis, as needed. This can occur for lots fractured as a result of wash sale processing. High Amortized Cost or High Cost (HCLOT). The lots with the highest current cost are sold first. The system uses current unit cost, which includes amortization for debt securities. This method relieves the lots that can generate the maximum loss or the minimal gain. Low Amortized Cost or Low Cost (LCLOT). The lots with the lowest current cost are sold first. The system uses current unit cost, which includes amortization for debt securities. This method relieves the lots that can generate the minimal loss or the maximum gain. Best Tax. The lots are selected and sold with the objective of taking losses first (short term then long term) and gains last (long term then short term). Lots are sold in the following order: Short term Losses. Lots that reflect a short term loss are sold first, beginning with lots that generate the greatest short term loss down to the least short term loss. Long term Losses. Lots that reflect a long term loss are sold, beginning with lots that generate the greatest long term loss down to the least long term loss. Short term No Gains or Losses. Short term lots that reflect no gain or loss. Long term No Gains or Losses. Long term lots that reflect no gain or loss. Long Term Gains. Lots that reflect a long term gain, beginning with lots that generate the least long term gain up to the greatest long term gain. Short Term Gains. Lots that reflect a short term gain, beginning with lots that generate the least short term gain up to the greatest short term gain. Tax Advantage (TXADV). The lots with the lowest tax liability are sold first to minimize tax liability. Tax Efficiency. The lots with the lowest tax liability are sold first to minimize tax liability. The system calculates the tax liability based on the manipulation of entity level tax factors for long and short term gains, long and short term losses, and currency gains. The system also incorporates the wash sale disallowance effect and considers the overall tax implications of closing each individual lot. High Original Cost (HORIG). The lots with the highest original cost are sold first. The system uses the original unit base cost of the open lots. It relieves the lots that can generate the maximum loss or the minimal gain. Low Original Cost (LORIG). The lots with the lowest original cost are sold first. The system uses the original unit base cost of the open lots. It relieves the lots that can generate the minimal loss or the maximum gain. Versus Purchases (VSP). The lots are selected and sold based on lot purchase characteristics, such as the target purchase date and the target purchase price. This option must be specified at the trade level. Modified FIFO (MFIFO). The open lots with the same original acquisition date (tag 216) as the close transaction are sold first, starting with the lots with the lowest unit cost local. If there are no open lots with the same acquisition date as the close transaction, or all same day lots have been sold, the oldest open lots are sold first based on the acquisition date. Within a single acquisition date, the lots with the lowest unit cost local are sold first.
Current Commitment	16087	Displays the current commitment amount on the position.
Settlement Information
Auto Settle Trade Indicator	58	Indicates whether the system settles the trade, coupon, and miscellaneous income and expenses automatically. If the entity's Auto Settle Indicator field is set to Yes, as specified on the Create/Edit Entity or Create Master Fund panels, the system creates a settlement when the trade is processed. There is no trade to settle date gain/loss. This applies even if the settlement date is in the future. Eagle recommends that you set the Auto Settle Indicator field to No for the entity and trade panels. Options include: Yes. The system automatically settles the trade, coupon, and miscellaneous income and expenses. The system retrieves the settle date FX rate if the local currency does not equal base and generates a trade to settle date gain/loss. No. Default. The system does not automatically settle the trade, coupon, and miscellaneous income and expenses. You must schedule the settlement for these transactions using the Run Contract Cash global panel. Or, manually settle the transactions using the Run Multiple Settlements panel. If you use cash segregation based on actual cash settlements, you can schedule settlements using the Run Cash Auto Match panel and create settlements manually using Cash Matching.
Broker Name	1236	Specifies the name of the primary broker.
Broker Code	88	Specifies the code that represents the broker.
Clearing Broker	1236	Specifies the name of the clearing broker, if different from the trade broker.
Clearing Broker Code	1237	Specifies the code for the clearing broker.
Custodian Bank Name	1146	Specifies the name of the custodian bank responsible for the trade. The field lookup allows you to select the custodians that have bank account relationships defined for the entity or for the composite associated with the entity. When you select a value, the system displays values for the Custody Bank Account Number field, Custody Bank Subaccount field, Cash Account Name field and Cash Account Number field, based on the bank account relationships and cash account relationships that apply to the transaction.
Custodian Bank Code	1240	Specifies the code of the custodian bank.
Custody Bank Account Number	1660	Specifies the custodian bank primary account number. The panel displays the value associated with the selected bank account relationship for the custodian.
Custody Bank Subaccount	1661	Displays the custodian bank subaccount number. When you use cash segregation, the panel displays a value of OTHER as the custodian bank subaccount number for the transaction.
Cash Account Name	11696	Specifies the name of the cash account for the custodian. If you use cash segregation, you hold the cash for the trade in this account for the custody basis. The system displays a cash account name based on the cash account relationships that apply to the transaction, but you can override it. It selects the cash account relationship for the transaction based on the transaction's cash account type, currency, and long/short indicator. The lookup displays valid cash account relationships that apply to the transaction.
Cash Account Number	116697	Specifies the account number of the cash account for the custodian. If you use cash segregation, you hold the cash for the trade in this account for the custody basis. The system displays a cash account number based on the cash account relationships that apply to the transaction, but you can override it. It selects the cash account relationship for the transaction based on the transaction's cash account type, currency, and long/short indicator. The lookup displays valid cash account relationships that apply to the transaction.
Settlement Instructions 1	1897	Allows you to add settlement notes.
Settlement Instructions 2	1898	Allows you to add settlement notes.
Settlement Instructions 3	1899	Allows you to add settlement notes.
Settlement Instructions 4	1900	Allows you to add settlement notes.
Settle Location	43	Specifies the location in which the trade is settled.
Exchange Name	2291	Specifies the marketplace in which the security is traded. It is also used with global tax withholding and tax reclaim processing.
Exchange Code	17	Specifies the code of the marketplace in which the security is traded.
Other Information
Transaction Notes	56	Contains user defined information about the trade.
Original Trade Ticket Number	761	Contains the trade ticket identification number. The system uses it during processing. For example, IDLOT close or cancel events use this number to locate an open lot.
User Defined Priority	2862	Specifies the user generated number that determines the event sub priority. That is, after the system accounts for the event sequence and corporate action sequence.
Order Number	1092	Specifies the order number of the transaction. This can be the same for multiple lots.