Archive | February 2014

Learning the Basics of Portfolio Accounting

Portfolio accounting is essentially about determining gain or loss. This is especially important when an investments in the portfolio is sold. Closing a position causes a realized gain or loss. Before selling, the gain or loss since purchase is only an unrealized appreciation or decline in value. Proper portfolio accounting requires an understanding of cost basics and holding period.

Realized Gain or Loss

In this portfolio accounting, the sale proceeds realized from selling a security in a portfolio is the whole amount received. This includes both cash and the fair market value of anything else received in exchange for the security. Determining gain or loss on the same of a portfolio security involves comparing the amount received with the basis of the investment. A gain occurs when the sale proceeds exceed the basis in the sold investment. There is a loss when the same proceeds are less than the basis.

Basis of a Security

The basis of a security in portfolio accounting is usually the cost of the purchase plus any associated commission and fees. The basis is different in portfolio accounting if a security is acquired by a different way than purchase. A gift during the life of a donor retains the basis of that donor. The portfolio accounting of the gift recipient uses the basis of the donor. However, the recipient of inherited property accounts for basis as the fair market value of the investment on the date of the decedent’s death.

Holding Period

Portfolio accounting for sold investments requires determining whether the holding period was short-term or long-term. A gain or loss is long-term when the investment is held fir more than a year. The gain or loss is short-term if the investment is sold a year or less after the purchase. The date of purchase is recorded to account for the holding period. The date of sale is the final day of a holding period.

This entry was posted on 25. February 2014, in Accounting.

Today’s Top 4 Investment Management Solutions

The wide selection of investment management solutions today supports practically all investment management processes from front to back. To cater to the ever-changing needs of businesses, investment management solutions are made to be completely modular and flexible in terms of business function and instrument type. These investment management solutions process automation in investment management adds value across the enterprise, empowering you to mitigate risk, reduce costs and allow growth throughout the whole enterprise. Here is a list of today’s most popular investment management solutions.

FC Portfolio by FundCount. This is an investment management solution manages all of your investment portfolio, accounting, reporting and client-related tasks in one powerful investment management platform. Its key features include integrated general ledger, workflow engine, check writing, client management and billing, automated broker reconciliation, interfaces with brokers, wide range of securities, and GIPS-compliant presentation of reporting.

IMS by Isis Financial Systems. This is an integrated multi-currency investment management solution that maintains any asset class. This solution features rules based modelling, performance measurement, risk analysis, breakout allocations and returns at all levels, scenario tool and yield curve analysis. Its accounting features include a complete history of activity, audit controls, flexible query, reconcilement and unitization.

CreditPoint Software by CreditPoint. This is an investment management solution for credit risk and collections management, supplier risk management and commercial loan management. This solution feature almost endless configuration options, allowing you to achieve significant automation and workflow benefits, while still embracing the company’s expertise and experience. Their website features product video tours, along with interactive process diagrams that will take you through the entire process of investment management.

Prospero by SAGE. The Prospero suite of investment management solutions are fitted precisely to the needs of specific segments of the financial services industry. It has features for wealth management, asset management, fund administration and independent asset management. It covers all financial, processing, reporting and transactional need from the front office to the middle and back office areas.

This entry was posted on 14. February 2014, in Accounting.

Learning the Basics of Asset Manager Software

Asset management software is a financial and business tool that will analyze the value of certain assets. It will also aid in determining financial health, growth potential for various investments and investment opportunities. The practice of the use of asset management software is usually used in the technology and industrial realm where stakeholders are looking for professional analysts and tools to manage their investment portfolios and make the best economic assessments. This is otherwise known as the management of collective investments, and usually needs a comprehensive financial analysis and creation of an investment growth plan.

Function of Asset Management

Specialists of asset management software mostly work in teams with an investor to set financial goal, analyze past and current data, review projections, and make recommendations on their best portfolio-building strategy. Different asset management software solutions can include calculating the life cycle of different investments; conducting comprehensive statistical analysis of data; and evaluating different securities like bonds and shares, which includes physical assets like computer technology or real estate. Asset managers help investors pick the best stocks, come up with financial plans for short and long term goals, and monitor all investments.

Considerations in Asset Management

Using asset management software is mostly only needed for those with a diverse stock portfolio and are considerably wealthy. Because an asset management specialist usually charges a high fee, many people who make use of such services have many investment accounts and a high net worth. Paying for expensive asset management software does not guarantee success in the financial markets; the stock and securities exchange markets are always fluctuating, and asset management teams cannot guarantee success.

Misconceptions on Asset Management

Management investments do not follow on strict formula. After an assessment is made, an asset manager picks from several different strategies, the most common recommendations of which are investment in long term returns, diversification, and asset allocation. Asset management software is not mandatory for any business or individual, and services can be especially expensive for small business owners or those with only a small number of securities investments. The business of asset management software can be risky as managers are always at the mercy of fluctuating stock prices.



This entry was posted on 7. February 2014, in Accounting.