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Valuate portfolio for bookkeeping purposes

Deferrals in FA are used, when you want to valuate portfolio based on the market value, accrued interest or bond maturity value and record this value to your bookkeeping system.

Preconditions

Before you start editing position valuations, make sure that the market prices of the securities linked to the positions have been updated and that the maturity dates and values are correct for the bonds.

Deferral to market value

This feature can help closing a portfolio and revaluating the purchase value based on the market value. This feature compares the current booked purchase value against the market value and updates the booked purchase value.

  1. Select the portfolio in Overview. Right click portfolio in portfolio hierarchy (top right corner). Alternatively, you can also select multiple portfolios on the Portfolios view.

  2. Select Bookkeeping → Deferral of positions, Bookkeeping → Deferral of positions (market value), or Bookkeeping → Deferral of positions (market value, use original purchase value). Your choice determines if deferrals are made when the market value is lower than the original purchase value or if they are always done with the market value:

    1. Deferral of positions creates deferrals for the difference between the purchase value and market value, but not allowing the purchase value to go above the original purchase value.

    2. Deferral of positions (market value) creates deferrals for the difference between the purchase value and market value.

    3. Deferral of positions (market value, use original purchase value) creates deferrals for the difference between the original purchase value and market value. Use this option when you have transactions with booked values and want to use the original values for deferrals. You need to cancel the deferrals the next day because the already deferred amounts are not considered in subsequent deferrals.

  3. Define the periodization date and if the bookkeeping posting will be cancelled next day.

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  4. Select the security types.

  5. Review the valuation changes in the "+/-" column.

  6. Click Done. The system creates calculated value adjustment transactions. These adjustment transactions modify the purchase price for open purchase lots (position purchase price = accounting price).

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Read more about the deferral logic in FA Back reference: [Extension] Bookkeeping - Deferrals

Deferral of accrued interest

This functionality can be used to generate Deferral of accrued interest transactions into the selected portfolio. It generates either one transaction per bond security or a single lump sum transaction. In addition to that, reverse transaction(s) are created for the following date. The value of the transaction is the (sum of) accrued interest(s) on the selected dates. The generated transactions can then be used in accounting to handle accrued interest properly.

  1. Select the portfolio in Overview. Right click portfolio in portfolio hierarchy (top right corner). Alternatively, you can also select multiple portfolios on the Portfolios view.

  2. Select Bookkeeping → Deferral of accrued interest.

  3. Select deferral date and whether to create one transaction for the total accrued interest or separate transactions per bond position and click Done.

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  4. The system creates Deferral of accrued interest transactions in your portfolio if there is any accrued interest to defer.

Deferral of accounts

You can use this feature to create Cashflow in (Internal) and Cashflow out (Internal) transactions to your cash accounts, that are used to realize the profits and losses from currency accounts. The value of the transactions total the account balance. The created transactions can then be used in accounting to handle account profits and losses properly.

  1. Select the portfolio in Overview. Right-click the portfolio in the portfolio hierarchy (top-right corner) and select Bookkeeping → Deferral of account interest.

    Alternatively, you can also select multiple portfolios on the Portfolios view.

  2. Select the date to realize the currency profits and losses for.

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  3. Review the transactions and accept by clicking Done.

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Deferral of bond purchase price

This feature can be used to calculate the deferral of the bond purchase price. It supports two different methods. The linear method generates deferral transaction based on the bond purchase price vs. its price at maturity, while the constant yield method generates deferral transaction based on the bond's yield at the time of purchase vs. its yield on the day of the deferral.

  1. Select the portfolio in Overview. Right click portfolio in portfolio hierarchy (top right corner). Alternatively, you can also select multiple portfolios on the Portfolios view.

  2. Select Bookkeeping → Deferral of bond purchase price.

  3. Select deferral period Start and End date and method. The linear method calculates the difference between the bond's purchase value and maturity value and divides this difference equally over the days remaining before maturity. The constant yield method keeps the yield-to-maturity at the same level as it was on the day of the purchase.

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  4. Review the deferrals and accept by clicking Done. You can also unselect some rows at this point - in that case, they will not be included.

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Deleting a deferral

To delete a deferral, remove the generated transactions.

If you configured deferral runs as a part of NAV calculation in FA Fund management app, reset the Latest deferral date in the Portfolio window, Fund settings > Accounting tab to the date when the latest correct deferral was carried out.

Questions about deferrals

I ran a deferral in my portfolio. The system didn't create value changes for all positions. In these cases, the market value of the position was higher than the original purchase price. 

FA has two predefined deferrals:

  • Deferrals of position amortize the purchase price (= accounting price) so it raises the maximum to the level of the original purchase price.

  • Deferrals of positions (market value) convert the purchase price into the market price and thus don't compare it with the original purchase price.

I've done a deferral and value adjustment transactions have been created correctly. Why doesn't the system create postings to accounting? 

You should also make accounting rules for this transaction type (VAAD).

I run deferral for my portfolio. The market value for one position changes. Why? 

If you don't have a market unit price for the instrument, FA uses the purchase price as market price. If the position isn't in portfolio currency, the deferral function does the value change to the purchase price. Then the Value Adjustment modifies indirectly the market price as well.

You can use Deferral function to currency positions only, if you have a market price observation for the instrument.

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