Manage Earn Thru Rules

Earn thru rules allow you to specify how the system processes accrue income and expenses when a series of non business days fall on a month end, quarter end, semi annual, or year end date. The system is installed with values for the Earn Thru Rule field. You can add additional values to meet your unique processing requirements.

To create an earn thru rule:

In Accounting Center, in the left navigation pane, click Setup > Calendars > Earn Thru Calendar > Create Earn Thru Rule.
You see the Create Earn Thru Rule panel.
In the Earn Thru Rule Name field, specify the name of the earn thru rule you are adding.
In the Business Calendar field, specify the business calendar to which the earn thru rule applies.
In the Non Business Day Processing field, specify how you want to process non business Processing day accruals.
Options include:
– Process with Previous Business Day. Post non business day accruals to the previous business day's accounting date. For example, Saturday and Sunday are non business days in the US. If you select this option, accruals for Saturday and Sunday would post on Friday.
– Process with Next Business Day. Post non business day accruals to the next business day's accounting date. For example, Saturday and Sunday are non-business days in the US. If you select this option, accruals for Saturday and Sunday would post on Monday.
In the Split Indicator field, specify how to split non business day processing when a series of non business days falls on a month end date, quarter end date, semi-annual date, or at the end of a year.
Options include:
–  None. Indicates you do not want to split non-business day processing.
– Monthly Accounting Date Only. Determines the month in which the system recognizes earnings. For example, August 31, 2013 falls on a Saturday. Normally, if non business day processing were set to process with the previous business day, then Saturday, August 31, and Sunday, September 1, would be processed with Friday, August 30. If you wanted to process September 1 activity with the rest of September's activity, you can use this field to override the value in the Non Business Day Processing field.
–  Daily Accounting Date Only. Determines the day on which the system recognizes earnings. For example, January 1 is a holiday in the U.S. Earnings are not recognized on January 1 because it is a non-business day. The earnings will be recognized on the next business day or previous business day, as specified in the Non Business Day Processing field.
–  Both. Splits your earn thru rule, recognizing earnings on both the monthly accounting date and daily accounting date. Typically, the monthly accounting date is the same as the daily accounting date. The only time it is different is when a month-end date falls on a weekend or when you are booking a transaction. For example, you may want to close your daily accounting periods and leave your month-end accounting period open for mutual funds. For audit purposes, you have to strike a NAV on Friday. Suppose you get an as of trade on Saturday, and Saturday is a month-end date. This option ensures the as of trade is also recognized on your month-end set of books.
In the Split Frequency field, specify a split frequency when your earn thru rule splits out the weekend dates for both your daily and monthly accounting periods.
This field appears if you select a value other than None in the Split Indicator field. Options include:
–  Monthly
–  Quarterly
–  Semi-Annually
–  Annually
–  None
For example, suppose you select Both for the Split Indicator field, Monthly for the Split Frequency field, and Process with Previous Business Day for the Non Business Day Processing field. Further suppose that you want to accrue through the end of May, and May 31 falls on a Saturday. When you accrue on Friday, May 30, income for Friday and Saturday, May 31, will post to the accounting date on May 30. When you accrue on Monday, June 2, income for Sunday, June 1, and Monday, June 2, will post to the accounting date on June 2.
In the Starting Year field, specify the starting year.
The first calendar day of the year becomes the starting date of the earn thru rule. If the first calendar day falls on a non business day, the system marks it as a non business day. The system only adds ledger accounting periods for business days if you are using a business calendar.
In the # of Years field, enter the number of earn thru rule calendar years you want to generate.
In the Earn Thru FX Indicator field, indicate how to accrue foreign holdings.
Options include:
– Current. Use the current day's foreign exchange rate when accruing on foreign holdings. If you select Current and a rate does not exist in the system, the system calculates the accruals using the most recent FX Rate.
– Prior. Use the prior day's foreign exchange rate when accruing on foreign holdings.
Click Submit.