Understand Entities That Do Not Use COSTCASH Processing
- Nancy Cohn (Deactivated)
- Jawann Swislow
- Pamela Totas (Deactivated)
If an entity does not require the costing of foreign currency and the recognition of realized currency gain loss, you can disable the use of Eagle Accounting’s COSTCASH processing with that entity. When an entity does not use COSTCASH processing, the system performs the same calculation for foreign currencies as it does for domestic currencies. It does not treat foreign currency balances held in an entity as a Cost position.
When you set COSTCASH processing to No for an entity, you realize the following benefits:
You reduce the amount of data stored in those accounts by eliminating writes to the COSTCASH object. In a scenario where you use an external system to report and reconcile foreign cash, this can prevent redundant reporting of positions and cost in Eagle Accounting.
You eliminate additional, unnecessary processing within accounting occurring from foreign settlements. This leads to processing speed improvements related to foreign cash settlements.
You eliminate support needed for COSTCASH issues. When an Eagle data warehouse cash balance is incorrect, you often have to look at the COSTCASH object and then look at the accounting cash activity to identify where the problem lies.
Eagle data warehouse foreign cash balances are a sum of the accounting cash activity rather than the COSTCASH object resulting from cash settlement activity.
Easier maintenance of accounting foreign cash activity.
Understand When Entities Do Not Require COSTCASH Processing
COSTCASH processing is not required for an entity when:
You do not require costing of foreign currency and the recognition of realized currency gain loss recognized on settlement date
You do not use general ledger processing
You do not need to maintain foreign currency balances within accounting
Use of COSTCASH processing for an entity is optional. Be aware that entities require COSTCASH processing under certain conditions.
Set Up Entities without COSTCASH Processing
When an entity or master fund does not use COSTCASH processing, you can set up the entity with the (hidden) Cost Cash Processing field (tag 5006) set to No and the Costcash Bulking Election (tag 2423) field set to No. You can also set the Cost Cash Processing field to No at the accounting basis level. For more information, see Set Up Entities for COSTCASH Processing.
If you set Cost Cash Processing to No for an entity/basis, be aware:
Any existing COSTCASH records remain in the COSTCASH object, Eagle data warehouse, and ledger until deleted.
If the entity has multiple accounting bases, you must disable COSTCASH processing on each accounting basis to completely shut it off.
System Impact without COSTCASH Processing
When you do not use COSTCASH processing, the system does not create a COSTCASH position for cash activity where the asset currency is not equal to the base currency. The STAR to PACE Direct cash balance calculator performs the same calculation for foreign currencies as it is does for domestic currencies. Domestic currencies do not have a COSTCASH object in STAR.
Settlement Example with COSTCASH Processing Disabled
This scenario shows a non-base settlement for an entity with the Costcash Processing field set to No.
The figure shows the Position Viewer tool following the settlement of a non-base BUY transaction. The transaction settled in euros. In this case, the STAR engine did not create a row in the object for the settlement currency.
Â