Same lot selection allows Eagle's investment accounting solution to close the same lots across multiple accounting bases of an entity. If you set up an entity for same lot selection, all bases follow the lot selection method of the accounting basis identified as the Controlling Basis, regardless of the lot selection method of each basis. This allows all bases of an entity to have the same lots at all times.
The Controlling Basis field on the entity and basis panels allows you to identify the controlling basis. The basis that sets this field as Yes controls which lots are closed for all the other bases that have set this field as No. To support this enhancement, multiple changes were made to the engine code and rules. The rollback code was restructured in order to process events more directly. Single Commit Scope changes were made for corporate actions such as Mergers and Exchange Offers.
The Controlling Basis field (tag 4949) has been added to the Add/Change Entity panel, Add/Change Master Fund Setup panel, and Add/Change a Basis to a Portfolio panel to designate the accounting basis to use during manual same lot selection. You can set the option to Y on the Add/Change Entity panel to designate the primary basis as controlling, or set the option to Y on the Add a Basis to a Portfolio panel to designate a secondary basis as controlling. The primary basis defaults as the controlling basis if no basis has been designated. The controlling basis is used to enhance the manual selection of lots in several ways. For example, when booking an identified lot close transaction, the open lots available for selection are displayed for the controlling basis in the lot selection pane. For entities marked as pending trade eligible (tag 3679 set to Y), a copy of the manually cancelled transaction is inserted to the Pending Trades table for the controlling basis. Previously, only a copy of the transaction for the primary basis was stored.
As part of this enhancement, the Original Event ID field (tag 457) has been established for all wash sale fractured lots and sub-lots, and the identified lot (IDLOT) selection method has been changed to relieve multiple lots based on the same Original Event ID. This resolves the difficulties with present wash sale processing, during which an open could fracture a lot to allow for the disallowance of a prior loss, and the same lots could not be closed across the multiple accounting bases for the entity. The Conversion and Receive trade panels were also revised to allow the submission of the Original Event ID field (tag 457) to identify the same lots across multiple accounting bases.
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