Security Characteristics Available for Account Breakouts

Custom granularity rules have great flexibility and allow for many different options in customizing ledger accounts. At the most granular level, you can create a rule for an individual security or group of securities, using the Security Grouping panels.

You can also set up rules at the processing security type level called PST rules. For PST rules you are allowed up to two additional security attributes (in addition to processing security type) with which to differentiate securities. The attributes available follow.

About Granularity Pools

A granularity pool determines the attribute groupings that are available for a ledger granularity rule that uses custom granularity. An attribute grouping is comprised of a set of attributes values for security types, market sector descriptions, or issue countries that require processing in the same manner for a ledger granularity rule. Granularity rules facilitate the setup process for rules based on security types, market sector descriptions, or issue countries. You can assign a granularity pool to multiple ledger granularity rules.

When you first add a ledger granularity rule that you plan to use to break out accounts by security type, market sector description, and/or issue country, you must identify the granularity pool to use with that rule. This allows you to choose attribute groupings from the granularity pool when you define rule details.

The following example illustrates how granularity pools work. Say you plan to create a ledger granularity rule that breaks out ledger accounts by processing security type along with security type and issue country. The granularity pool you create for this ledger granularity rule might include four attribute groupings. If security types CMBS, RMBS, and MBS are reflected on one ledger account and security types EQ, MF, and CASH are reflected in another ledger account, you can create a granularity pool that includes an ST Mortgage Backeds attribute grouping for security types CMBS, RMBS, and MBS and includes an ST Other attribute grouping for security types EQ, MF, and CASH. You also create a Country Domestic A attribute grouping in that pool for an issue country of US and create a Country Foreign A attribute grouping for an issue country of CA, IT, and ME because those sets of attribute values are processed the same way. 

The following figure illustrates the data stored in granularity pools. Granularity Pool A contains six attribute groupings based on security type, issue country, and market sector description. Granularity Pool B contains four attribute groupings based on security type and issue country. 

About Custom Accounts and Custom Granularity

STAR's core accounts are used for posting purposes because STAR's Post Matrix references the core chart of accounts. Reports generated then display the custom accounts. Custom granularity is based on the custom chart of account that you map to STAR's core accounts, and you use the Custom Chart of Accounts for reporting purposes. With the addition of ledger granularity, the system's custom capabilities expanded from one custom account for every core account to granularity based on security grouping and processing security type (PST).

With custom granularity, you can break out ledger reports using custom accounts based on security groupings and/or security master attributes included in PST rules. You create ledger granularity rules with custom granularity rule details to provide the mappings from the core account to the custom account for securities that meet specific criteria, and assign the ledger granularity rules to entity/accounting basis groupings that use those mappings in ledger reports. You can set up ledger granularity rules to map any STAR ledger account, including the Short Term and Cash Equivalent accounts used for holding term granularity, to a custom account for that security group or PST rule.

Custom granularity rules offer great flexibility and allow for many different options in customizing ledger accounts. The following example demonstrates one way you might want the system to map core accounts to custom accounts based on custom granularity criteria. 

In this example, you want the core account for Cost of Investments mapped to different custom accounts based on the value of the holding's processing security type, long/short indicator, and Federal tax indicator. Alternately, you can set up custom granularity rules that map custom accounts based on a security grouping comprised of individual securities.

How Eagle Applies Custom Granularity Rules in Investment Accounting

When Eagle processes a transaction, it recognizes the ledger granularity rule in effect for that transaction's entity/accounting basis and security. The system retrieves the correct custom granularity rule for the asset, which is based on either a security grouping rule or a PST rule, and posts that information for report rendering. This allows ledger reports and report queries to break core ledger accounts into more granular custom accounts.

The system applies the criteria specified in custom granularity rules in order of most granular to least granular criteria, as follows:

1. Security Groupings. Highest level of granularity. A security grouping is a set of securities that break out custom ledger accounts in the same manner following user-defined core to custom ledger mappings. You can create security groupings for assets that do not share SMF features but break out accounts in the same way.

2. Processing Security Type. Second highest level of granularity. A processing security type (PST) rule allows you to break out accounts with custom account mappings by a security's processing security type or by a security's processing security type plus up to two additional security attributes.

3. Security Attributes. Lowest level of granularity. You can identify up to two security attributes within a PST rule. These attributes can include the security's Security Type, Long/Short Indicator, Federal Tax Indicator, Market Sector Description, Affiliated/Unaffiliated, Issue Country, and Granularity Category.