Understand Ledger Based Rules Used to Calculate NAVs

You can use a Ledger Based adjusted NAV expense rule that defines the criteria to calculate the underlying NAV component in a variable expense. 

You can set up an adjusted NAV based expense rule with rule criteria that can include and/or exclude a ledger account range, and optionally can restrict that rule to a specified security ID, long/short indicator, security type, processing security type, and sub security type. For example, the adjusted NAV rule specifies that the variable expense's ledger based NAV component includes all the ledger accounts from the capital and income ledger accounts on the income statement and that it excludes ledger accounts from the expense accounts on the income statement. 

If you plan to use adjusted NAV expenses that use Ledger Based NAVs to derive the total net assets used to calculate daily expenses of a fund:

1. Set up an adjusted NAV expense rule where the Adjusted NAV Expense Rule Type is set to Ledger Based.
   The rule can include and can exclude various components of fund activity. For more information, see Create a Ledger Based Adjusted NAV Expense Rule.

2. Assign the rule to a variable expense or assign the rule to a group variable expense that has a NAV Component of Ledger Based NAV. 
   You can assign the rule to a variable expense at the TF share class level.

3. Process the expense accruals.

For an example how the system uses the variable expense's tier rule and adjusted NAV expense rule to calculate the variable expense, see Ledger Based NAV Expense Rule Calculation Example.