Adjustment Flows

Adjustment Flows

Definition

If you manage securities positions for all securities accounts (at portfolio or securities account group level) and not for specific securities accounts, the positions of a class in all the securities accounts are regarded as one unit.

The positions of a class which belong to one unit must show the same average acquisition price and book price. This is why the system generates corresponding adjustment flows as planned records.

Example: Adjustment flows for position management at portfolio level

See also:

Position management

Integration

If several purchases belong to one position-managing unit, adjustment flows are generated displaying a single acquisition price. You do not post these flows immediately. Instead you manage them as planned records until you perform Period-end closing . This avoids having to reverse activities unnecessarily for transactions that were not entered in chronological order.

Example

Events

At time t1, you purchase interest-bearing securities for a nominal amount of 200,000 DEM at 100% and enter this in the system.
At time t3, you enter a purchase for a nominal amount of 300,000 DEM at 90% in the system.
You conclude the sale at time t2, but forget to enter this in the system and therefore only enter it at a later date (after t3).

System activities

At time t3, the system calculates an average price at 94%. This produces adjustment records of 12,000 DEM, which are generated as planned records.
Provided that you have not yet performed period-end closing, you can still enter the sale at time t2, and correct the planned records to 7,500 DEM.
If you have performed period-end closing, the adjustment flows are posted as actual records and transferred to Financial Accounting.

If, after period-end closing, you still have to perform position-changing activities for the period prior to period-end closing, you have to reverse the actual records (starting with the most recent).