Manage Accounting Bases for Master Funds

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Last updated: Mar 01, 2024 by Nancy Cohn (Deactivated)
3 min read

An accounting basis is the conceptual framework that you adhere to for resolving your accounting and reporting issues. Eagle's Accounting solution uses the accounting basis to determine the proper accounting treatment and valuation of the securities held by an entity.

About Multiple Accounting Bases

Eagle provides multiple basis accounting, allowing you to report on an entity using different accounting treatments. For example, you can set up a primary accounting basis with wash sales disabled and an additional accounting basis with wash sales enabled, allowing you to report on transactions with or without wash sales. The following fields often differ across accounting bases:

  • Lot Selection Method

  • Cost Method

  • Primary Amortization/Accretion Rule

  • Bifurcation Method

  • Base Currency

  • Short Term Discount Accrual

The system maintains a separate set of books for each accounting basis, and transactions are processed against each defined basis. To ensure accurate reporting, set up any additional accounting bases prior to booking transactions to the entity.

When you set up an entity, the system creates a primary accounting basis using the values in the Accounting Basis and Primary Basis Indicator fields on the Create/Edit Entity panel or Create Master Fund panel.

Add Additional Accounting Bases

In the Add a Basis to a Portfolio panel, you can add an additional accounting basis for a master fund.

To add an additional accounting basis for a master fund:

  1. Do one of the following: 
    - In Portfolio Data Center, in the left navigation pane, click Portfolio Desk > Accounting Portfolio Setup > Accounting Basis > Add a Basis to a Portfolio.
    - In Accounting Center, in the left navigation pane, click Setup > Portfolio Setup > Accounting Basis > Add a Basis to a Portfolio.
    You see the Add a Basis to a Portfolio panel.

  2. Complete the options on the Add a Basis to a Portfolio panel.

  3. Click Submit.

  4. After you add an additional accounting basis, add an accounting period for the new accounting basis.

Assign Posting Cut Off Dates

The Assign Posting Cut Off Date panel allows you to add a posting cut off date to an entity/accounting basis. This is a static date that limits how far back a trade can be back dated. This feature is useful if you mistakenly enter an incorrect trade date. Or, if you do not understand the negative implications of posting an extreme as of trade.

To assign posting cut off dates:

  1. Do one of the following: 
    - In Portfolio Data Center, in the left navigation pane, click Portfolio Desk > Accounting Portfolio Setup > Accounting Basis > Assign Posting Cut Off Date.
    - In Accounting Center, in the left navigation pane, click Setup > Portfolio Setup > Accounting Basis > Assign Posting Cut Off Date.
    You see the Assign Posting Cut Off Date panel.

  2. In the Entity ID or Entity Name field, enter the entity identifier or entity name, and click Submit.
    You see a list of accounting bases for the specified entity.

  3. Select the accounting basis and click Update Selected Record.

  4. In the Posting Cut Off Date field, enter the posting cut off date, and click Submit.
    The system stores the posting cut off date as part of the accounting basis record. When you submit a trade, the system compares the trade date to the posting cut off date on the accounting basis record. If the trade date is prior to the posting cut off date, the transaction is not allowed and the system displays an error message.
    You can override the posting cut off date at the trade level by entering a value of Y in the Override Posting Cut Off Date field. Or, reprocess the transaction with a modified trade date or effective date. You can reprocess the rejected transaction using the Exceptions workspace.