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TRW6&Current Windows Form3'6&A43'T  OZUS  Table_AK Kd{{' dxd d Level 1 Level 2 Level 3 Level 4 Level 5($     ~kg|}C<< c 8 kI"  OZUS  e && eIclmntV27GAVIN'STESTFUND021/08/94  ClientdetailsClientmaintenance14:43̀ClientcodeDEMODEMÒShortnameDEMOCLIENTSettlementcurrencyAUDAUSTRALIANDOLLARLedgerIntegratioǹReportingcurrencyAUDAUSTRALIANDOLLARGLfilesetA1̀ResidencycurrencyAUDAUSTRALIANDOLLARGLCurrencyǸNomineecodeGLcostbasisC̀FFXNomineecodeTaxationIntegratioǹPrimarygroupParcelbasisCFItreatmentM̀CreditGradingNoIndexationN30/6/88̀TradinggroupAutoupdateỲContractualSettleYTaxrate39.0000%̀PrivateLoanValue0NotapplicableCostingMethodologỳInceptiondate3/9/93Insttype:FIEQFUOPDS̀Yearbegindate1/1Costing̀Nextreportdate3/9/93AllocatioǹReportfrequencyMManagementFees̀ActiveYExclusioǹFeecodèF1-ChangeF3-GroupsF5/F6-ScrollF9-Delete_AltF1-OptionalF2-AddressF3-PasswordF7-ScreeningF8-UserDefinedF9-Values <6X9`("Courier NewTT  kI"  OZUS  e && eSysmnt4V14GAVIN'STESTFUND021/08/94  ЀCPIMaintenance15:03̀YearQtr1Qtr2Qtr3Qtr4̀850.000.0071.3072.70̀8674.4075.6077.6079.80̀8781.4082.6084.0085.50̀8887.0088.5090.2092.00̀8992.9095.2097.4099.20̀90100.90102.50103.30106.00̀91105.80106.00106.60107.60̀92107.60107.30107.40107.90̀93108.90109.30109.80110.00̀94110.40110.80111.20111.60̀95112.00112.40112.80113.20Nomore-tapentertocontinue_  Level 1 Level 2 Level 3 Level 4 Level 5($ (    ) glM << deUU_&)&&>:Indexed&&:Number&&n:for&&~:Quarter&&:in&& :which&& :Security&&j:is&&2:Disposed&&R>Indexed&&>Number&&>for&&>Quarter&& >in&& >which&& >Security&&~>is&&F>Acquired {Indexed~Number~for~Quarter~\in~which~Security~is~Disposed}OVER{Indexed~Number~for~Quarter~\in~which~Security~is~Acquired}  kI"  OZUS  e && e Sysmnt4V13GAVIN'STESTFUND0214/09/93  ЀCPIMaintenance12:08̀Year1993̀Quarter3̀CPIindex111.00̀Oktocontinue?_ t    \R6&\ I kI"  OZUS  e && eTaxmenuV20GAVIN'STESTFUND021/08/94  ЀTaxmenu15:05̀0.Exit̀1.UpdateCostingfilè2.EditParcels̀3.ProfitReport̀4.SalesSummaryReport̀5.LiabilityReport̀6.IncomeAuditReport̀7.SpecificID̀8.MaintainCPÌ9.Utilities̀Choose:0a gI#  OZUS  n Figure  2   ݀TwoStageProcessing  kI"  OZUS  e && e TaxmenuV15GAVIN'STESTFUND0201/08/94  ЀTaxmenu12:24̀ClientcodeDEMODEMOCLIENTCAPITALGAINCostingfileforthisclientdoesnotexist,doyouwishtocreateone?_   kI"  OZUS  e && e TaxhcV5GAVIN'STESTFUND0201/08/94  ЀHtfiltoCosfil12:24̀ClientcodeDEMODEMOCLIENTCAPITALGAIǸ0.Exit̀1.UpdateCOSFILwithSpecificID̀2.UpdateCOSFILonFIFObasis̀Choose1 _ Y kI"  OZUS  e && e CgtprV79GAVIN'STESTFUND0213/09/93  ЀCapitalGainsTax-Profitreport14:10̀PrintforclientDEMODEMOCLIENTCAPITALGAIǸPrintProfitReportỲPrintReconciliationỲReconcileonBook/CostCPrintreportinsequenceG̀Firstgrouptoprint10AUSTRALIANEQUITIES̀Lastgrouptoprint73DISCOUNTSECURITIES̀Printsummaryonly?ǸStartingdate01/09/80̀Endingdate13/09/93̀IncludeoptionsỲIndexFI\DSYTapentertocontinue_ &&&e&&&  kI"  OZUS  e && e CgttlV74GAVIN'STESTFUND0201/08/94  ЀCapitalGainsTaxLiabilityreport14:10̀PrintforclientDEMODEMOCLIENTCAPITALGAIǸFirstgrouptoprint10AUSTRALIANEQUITIES̀Lastgrouptoprint73DISCOUNTSECURITIES̀PrintdetailsỲAsatdate13/09/93̀PricetypeFTime24:00̀IndexAllstocksǸIndexFI\DSỲIncludeoptionsYWhatpercentagetoreducemarketvalue0.000%Tapentertocontinue_ &&&e&&&  kI"  OZUS  e && e SYMODEDTV13HEALTHEMPLOYEESSUPERANNUATION022/08/94  ЀModuleparameters15:28̀ModulecodeCOCosting̀FixedInterestỲDiscountSecsỲFuturesỲEquitiesỲOptionsỲMatchcurrencyBWhenmatching,showvaluesin(B)ase,(C)lientor(N)ative? 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TRW6&Current Windows Form3'6&A43'T  OZUS  yyyyyyy @@y @y  @y @@y Y@y @@y @y 0@y 0@yy @@y @y @y @y i@Table_Ay F_!  TRW6&Current Windows Form3'6&A43'T  OZUS  fijUEAz|  &!01 p @ P@fr^X` hL x (#%'0*,.8135@8:<H?AXr@((=hopWGCz Xt`#x@ H@h߈  @6F8e&&q_eHiPortfolioq_q_eq_Ԉ z  LeLe@bb=@ /HiPortfolioTaxationModules@bb=@f6TrainingNotes@bb= 0 ## 0 .+## TRW\6&W6&Current Windows Form6&A46&A4Trt  eLLe[#` hL x (#%'0*,.8135@8:<H?A XXL X TableofContents  @ v  8# 1} Introduction !h!h!h.A v 9!9!!1  @ 8#2} HowTaxWorksinHiPortfolio!h!h!h. -9!9!!2    8#3} SetupandMaintenance!h!h!h.I ( &9!9!!6  @  8#4} RelationshiptoCostingModule!8!;!h.]/9!9!!14   8#5} ReportsandScreenEnquiries!8!;!h. -9!9!!16 @  8#6} ParcelEditingandDeletions!8!;!h. E -9!9!!20   8#7} ProblemIdentification!8!;!h. t '9!9!!22 @   AppendixATreatmentofDifferentSecurityTypes      t@w  1Introduction .  E ThepurposeofthistrainingsessionistoexplaintotheuserhowtheAustralianTaxmodulesoperateandtoprovidesomehintsandsuggestedapproachesinusingthetaxationmodulesandhowtosolveproblemsthatmayarise.Whilethetrainingwillbetargetedabovetotalnovicelevel,giventhetimeavailableitwillnotbepossibletodelvetoodeeplyintothemodulessothatnewcomerstotaxprocessinginHiPortfolioshouldhavenotroubleparticipatinginandbenefitingfromtheWorkshop.InstructionwillbebasedonthelatestreleasesofVersion6.WhiletherearedifferencesinstylebetweenVersion5andVersion6,thebasictransactionsprocessingandtaxcalculationsareessentiallythesame.      2HowTaxWorksinHiPortfolio k E WhiletheTaxmodulesinHiPortfolioessentiallyrevolvearoundthecapitalgainstaxrules,orPartIIIAoftheIncomeTaxAssessmentAct,thisismoreamatterofhistoricaloriginsratherthancurrentreportingcapabilities.Theoriginalreleasesofthemoduleswerebasedonthesimplecalculationoftaxableprofitsandlossesandtheallowanceofindexationwhereitisapplicable.TodaytheAustraliantaxmodulesextendtoallmajoraspectsoftaxationrelatingtothedisposalofportfolioassets.OneofthemajorclassofassetsthatfalloutsidethecapitalgainsumbrellaaretheclassofsecuritiesknownasTraditionalSecuritiesdonothavetheadvantageofindexationaffordedbythecapitalgainsrulessothatthetaxationgainsorlossesareequivalenttotheaccountinggainsorlossescalculatedonafirstinfirstoutbasis.Inaddition,anygainsorlossesareconsideredasIncomeitemsratherthanCapitalitems.DateDependency @  Processingwithinthetaxationmodulesisdependentuponanumberofimportantdates.Howadisposalistreateddepends,toalargeextent,uponthedateofacquisitionandthedateofdisposal.Importantdatesfortaxationprocessingare:20September1985 " %IntroductionofCGT  1July1988`  `  %TaxationofSuperannuationFunds E 10May1989 +  %TraditionalSecurityrules  ModeofOperation E Itshouldbeunderstoodthatthevalidityofthecapitalgainstaxreportsisdependentonreceivingfull,timelyandcorrectinformationonallsecuritytransactionsthathavetakenplaceduringthereportingperiod.Thecapitalgainstaxmoduleoperatesoutsidethebasesystem.Thisisimportantinunderstandingtheprocessingthattakesplace.Essentiallythemoduleworksbycreatingadistinctsetoftaxbasedcostsforeachacquisitionwhichitwillapplyagainstsubsequentdisposals.Thereisatwostageextractionprocesstogeneratethetaxationparcelsrequiredtoproducethecapitalgainsreports.Thefirststageextractsdatafromthebasesystemandplacesitinaholdingfile.WhilstperformingthisfunctionitwillcheckthedatatoensurethatallelementsforCGTcalculationsarepresent.Thesecondstageextractsinformationfromtheholdingfilesandcreatesthetaxcostapplicableforeachpurchaseandappliesthecreatedtaxparcelsaccordingtothecapitalgainsrules.Whentakingonaportfolioitimportantthatthecorrectsequenceofenteringandupdatingtradesisfollowed.Forexample,ifasecurityholdingismadeupofanumberofpurchasesandsalestheymustbeenteredinthecorrectdatesequence.Thisisespeciallyimportantforsales.SinceHiPortfolioallocatespurchasestosalesonafirstinfirstoutbasisinputtingasaleafterthecreationofthetaxfileswillmeanthatlatertaxparcelallocationswillbedoneincorrectly.ApplicationofIndexation ,(6 Calculationofcapitalgainstaxrequirestheapplicationofanindexnumberbasedonthequarterinwhichthesecuritywastraded.Thusitisimportantthatcorrecttradedatesareusedwhenenteringtransactions.Asignificantfeatureofthecapitalgainstaxprovisionsisthatifanassetisheldfor12monthsormorethe 0@,; elementsthatcomprisethecostbaseoftheassetareindexedbyreferencetotheConsumerPriceIndex(CPI)forthepurposesofcalculatingthecapitalgain( butnottheacapitalloss )thatarisesonthedisposal  oftheasset.Thisisbestillustratedbyanexample:Bought100B.H.P.@$10/shareon 1/8/88 P8L;E$1,000  AssumeaCPIfor3rdqtr1988of 100.00  E  Sold100B.H.P.@$14/shareon 8/10/89 7L;E$1,400    AssumeaCPIfor4thqtr1989of 130.00  E  Indexedcostbase=$1,000*(130.00/100.00)L?E$1,300   TaxableProfit g  %h,h3L;G$100 E  Comparedwith: AccountingProfit6L;G$400   Theactualtaxprofitortaxloss(tousethetermsinHiPortfolio)isafunctionofthecostbase,theindexedcostascalculatedaboveandtheproceedscombinedwiththefollowingrules:(a)xIFCostBase>Proceedsh-h3L;L@TaxLoss=ProceedsCostBase E (b)xIFCostBase<=Proceeds<=IndexedCostL>TaxP&L=Nil  (c)xIFIndexedCost" %$1,200 %%"@" %$1,400 %%"B" %$1,200 %%"D" %$200TaxProfit+!%"F" (   +TheValueUsedamountistheactualcostbasethathasbeenusedtocalculatethetaxableprofitorloss.  e$ H ComparisonbetweentheCGTandSupertaxModules E InbroadtermsthereisreallynodifferencebetweentheCapitalGainsTaxandtheSuperannuationTaxmodules.Theneedfortwoseparatemodulescomesfromtheprevioustaxfreestatusofsuperannuationfunds.Theterm"superannuationtax"isreallyamisnomerthathasbeenappliedtothetaxationofsuperannuationfunds.ThiscameintoeffectonJuly11988attherateof15%.Priortothisdatesuperannuationfundsweregenerallynontaxable.DespitethedichotomywithinthesystemthatisexplicitwiththeexistenceoftwoseparatemodulesthetreatmentofinvestmentsdoesnotvaryinitsessentialelementsnomatterwhethertheyfallunderthesuperannuationtaxrulesortheCGTrules.Themaindistinctionisoneofdatesandthesubsequentissuesrelatetotheestablishmentofacostbaseandwhenindexationcancommence.SuperannuationTax,asusedinHiPortfolio,issimplythetaxationofsuperannuationfundsbasedonstandardtaxationprinciples,withspecialprovisionstoaccountforholdingsofassetsasatJune30,1988.ThiscompareswiththeCapitalGainsTaxmoduleswhichappliestocapitalgainsresultingfromthedisposalofassetsacquiredafterSeptember19,1985.Generally,assetsacquiredonorbeforethatdateareexemptfromCGT.Asignificantfeatureofbothtaxmodulesisthattheyallowforindexationoftheoriginalcostofanassetifthatassethasbeenheldfor12monthsormore.Againthedifferenceisinthecalculationofsecuritiesheldat30June1988.Forcapitalgainstaxclientstheindexationfactoristakenfromthequarterinwhichtheholdingwasacquired.Forsuperannuationtaxclientstheindexationfactorusedisbasedonthe2ndquarter1988,nomatterwhentheholdingwasacquired.Thiscanbestbeillustratedbyanexample:1/1/88hV Purchase:10,000BHP@$8.00k:TotalCost:$80,000UCPI:87.0 @ 30/6/88MarketValueBHP:$8.50^ -^3TotalMV:$85,000LCPI:88.5 ! 15/4/89Sale:10,000BHP@$10.00^/^3Proceeds:$100,000eMCPI:95.2 @# Theindexedcostbaseforacapitalgainstaxclientis:V $80,000*(95.2/87.0)=$80,000*1.094=$87,520thiscompareswiththeindexedcostbaseforasuperannuationtaxclientwhichwouldbe:V  $85,000 *(95.2/ 88.5 )=$80,000* 1.076 =$91,460 $@ + Ashasbeenhighlighted,thetwodifferencesaretheindexationfactorandthestartingcostbasewhichinthiscaseisthemarketvalueoftheholdingasatJune30,1988.ThesystemwillchoosebetweentheoriginalcostoftheholdingandthemarketvalueasatJune301988dependingonwhichcreatesthesmallestprofitorloss.Inourexamplethemarketvalueisusedasthisishigherthanthehistoricalcostandcreatesthesmallestprofit.WherethereisahistoryofacquisitionsanddisposalsmakinguptheJune30,1988holdingsthenthesystemwilldeterminethecostoftheparcelsremainingonafirstinfirstoutbasis.AnimportantpointtonoteintheprocessingofJune301988holdingsinthesuperannuationtaxmoduleisthataspecialdate,i.e.June311988,hasbeenintroducedtoallowforadifferentmarketvaluetobeusedfortaxationcalculationstothemarketvalueusedfornormalportfoliovaluations.InorderfortheJune301988processingtoworkcorrectlyitisnecessaryfortheusertoinputthisJune31value.FIFOversusSpecificID 0@,; ЇWhenthecapitalgainstaxruleswerefirstintroduceditwaspresumedthatacquiredparcelswouldbematchedoffagainstdisposalsonafirstinfirstoutorFIFObasis.Sothatasalewouldbematchedoffagainsttheoldestexistingpurchase,ifthatwasinsufficienttofillthesalethenunitsfromthenextoldestpurchasewouldbeused,andsoon,untilthesaleunitswereallmatchedoff.AnalternativetothiswasmatchingonaSpecificIDbasiswherethetaxpayerisabletonominatewhichparcelsaretobematchedofftowhichsales.TheintroductionofSpecificIDallocationmeansthatwhilegreatertaxplanningcapabilitiesareaffordedtheuser,thepayoffislessautomatedprocessingand,thus,moremanualintervention.OntheirownthetwotaxationmodulesallowformatchingonaFIFObasis.AdditionalmodulescanbepurchasedwhichextendthematchingprocesstoSpecificID.WiththeSpecificIDmoduleturnedonusershaveachoiceofmatchingonthefollowingbases:FirstInFirstOutLastInFirstOutProfitMaximisationLossMaximisationAdHoc     3SetupandMaintenance R> E Alltheparametersforthetaxationmodulesinversion6aredefinedattheclientlevel.Thisisslightlydifferentfromversion5wheretaxationflagscouldbesetatFundlevelbutthisisbyvirtueofthefactthatunderversion6itisnotpossibletohaveanundissectedfund.Forthetaxmodulestobeused,anaccountmustbesetup,generallybythesupervisor,aseithera"superannuation"or"capitalgainstax"entity.ClientMaintenance E  eTD@z| v 0 @ P@eTheclientissetupasataxclientviatheClientmaintenancescreen(Option1.2):Thefourrelevantoptionsare: ""                                                      ""̀Parcelbasis #* ̀Indexation I%!, ̀Fixedinteresttreatment &". ̀AutoUpdate Q( $0 TheClientMaintenancescreenallowstheusertodefineaclientasbeingacapitalgainstaxor )%2 superannuationtaxclientbytyping"C"(CapitalGainsTax)or"S"(SuperannuationTax)respectively.Thenextoptioniswhetherornotindexationistoapplytothisparticularclient.Thisquestionisaskedinthenegativesothattoallowindexationtooccurthenyouwouldchoose"N".Foranyclientorportfoliooperatingundernormalcapitalgainstaxrulesthen"N"wouldbethestandardoptionchosen.Ausermayhaveaparticularreasonnottohaveassetsindexedfortaxpurposes,inthiscaseyouwouldchoose"Y"forthisflag.Ifthecapitalgainstaxoptionischosenthentheuseristhenaskedtodefinethetreatmentoffixedinterest 0T,; transactions.WhentheFITreatmentoptionissetto"C"thecapitalgainstaxiscalculatedonthedifferencebetweenthecapital,ratherthantotal,costbasis.InordertogeneratethegainsorlossessothatfixedinterestsecuritiesaretreatedonatotalcostbasisOption"M"shouldbeselected.AccordingtoarecentdraftrulingputoutbytheAustralianTaxOffice(DraftRulingTR92/D40)thestandardapproachfordealingwithfixedinterestsecuritiesshouldbeonatotalcostbasissothat"M"isthemostcommonoptionchosenhere.TheAutoUpdateoptionletsyoudecidewhetheryouwanttheholdingfile(HTFIL)updatedautomatically    uponbatchupdateoratthetimeofthetaxfileupdate.Initially,untilyouarecomfortablewiththetaxmodulesyoucouldconsidersettingthisto"N".Inversion6whentheCostingmoduleisusedthisisforcedtobe"Y"sothattheholdingfileisautomaticallychangedwhenupdatingabatchintheinvestmentsystem.DependingontheParcelBasischosentheTaxRatefieldwilldefaulttotheapplicabletaxrateforthistype D  ofclient.Takeons   Inordertocalculatecapitalgainstaxcorrectlyanyholdingmustbeabletobebrokendownintotaxationparcelsorlots.TheselotsarebasedoncalendarquarterssothattheCPIindexnumberscanbeappliedcorrectly.ThewayinwhichHiPortfoliodeterminesthetaxparcelsislookingatthetransactiondateand,thus,pickingupthematchingCPInumberforthatquarter.Theimplicationfortakeonofexistingportfoliosisthat,ideally,afulltransactionhistoryisknownforeachoftheholdingsuptothetakeondate.ThesetransactionscanthenbeenteredusingstandardproceduressothatHiPortfoliowillgeneratethecorrectcapitalgainstaxfiguresimmediatelyfromthetakeondate.Ofcourse,afulltransactionhistoryoneachwillmeanaheavyloadofkeyingin;amorepracticaloptionmaybeoneofthoselistedbelow.Thebasictransactionsdetailsforeachsecurityholdingforcapitalgainstaxareasfollows:̀Trade/transactiondates " ̀NetConsideration Q $ ̀Transactionexchangerate(foroverseassecurities)  & Animportantconsiderationwhenoperatingaclientunderoneofthetaxmodulesistobeawareoftheclient'syearendfortaxationpurposes.Indexation $T + Thebasisofthecapitalgainstaxlegislationistheapplicationofanindexationfactortotheoriginalpurchasepriceofasecurity.Thereforeinordertopreparethecapitalgainstaxreportswemustrecordtheinformationtocreatetheindexationfactor.  )$1 s{{}\LH~|x) 0 @ @sTheindexedcostbaseofanassetistheinitialcostmultipliedbytheindexationfactorwhichis: E o\LHz<v 0 @Xdddddddd@o ""          ""TheIndexNumberisthe"ConsumerPriceIndex"(CPI)asreleasedbytheAustralianBureauofStatistics  D inthemonthfollowingtheendofeachquarter.AttheendofeachquarteranestimateoftheCPIfiguremustbeinputforthenewquarter.MaintenanceandenquiryofCPIsaremadethroughtheReferenceFileoptionunderMaintenance.The M   CPIMaintenancescreenisalsothe8thoptionontheTaxMenu.Eithermethodarrivesatthesamescreens.ApersonshouldbenominatedtoensurethattheCPIfigureoranappropriateestimatehasbeenenteredintoHiPortfolio.Ifselection4(CPIMaintenance)andthenF7arechosenthepreviousscreenisdisplayedshowingthe """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""CPIforeachquarter.Quarterlyfigurescanbeinputbyenteringtheyear;HiPortfoliowillthenaskforthequarterandtheindexnumber.UsingtheF5/F6keyallowsyoutorollbackwardandforwardquarterbyquarter.ProceduresshouldbeputinplacetoensurethattheCPIestimateisreplacedbytherealfigureonceithasbeenreleased.TheCPIfiguresaregenerallyreleasedbytheAustralianBureauofStatisticswithin34weeksoftheend 0L,; ofthequarter,howeveronoccasionsitcanbedelayedfor67weeks.Thismeansforthatperiodthesystemwillrequireestimatesfortwoquarters.s{{}\LH~| xu 0 @ @sTheAustralianBureauofStatisticshasaCPIHotline=>005586400Code(11)Itshouldbemadecleartousersofthetaxreportsthatanytaxprofitorlossreportedonsalestradedinthecurrentquarterisbasedonanestimateonlyofthequarter'sCPIfigureandarenottobeusedfortaxationpurposes. """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""   %    TRW\6&W\6&6&A46&A4T  р E  CreatingtheTaxFiles   Usingthetaxationmodulesmeansthattwotypesofprofitcanbecalculatedforacquisitionanddisposal:*V :actualprofit,and E *V :taxableprofit.  ActualprofitisbasedontheactualcostsandproceedsofatransactionandisrepresentedinHiPortfoliobytheRealisedandUnrealisedreturnfigures.TaxationPrograms    Thecapitalgainstaxmoduleisdesignedtocalculatethetaxableprofitbyextractingthetransactions{{}\LH~|<v 0 @ @sdetailsfromthemainsystem. NOTE:w Regularextractionofdatafromthemainsystemwillbenecessaryonanongoingbasis.Itis E  advisablethatthisbedoneonaweeklybasissothatanyproblemswiththedatacanbeisolatedas """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""earlyaspossible.<( x (08!X<Itisalsoadvisablethatonlynominatedstaffmembershavetheresponsibilityofcarryingouttheinitialextractionprocessuponthetakeonofanewclient.ThetaxationmoduleisaccessedviathesupervisorprogramTAXMENU.ItiscommontohavethisinstalledasamenuoptionunderCustomPrograms. ,'5 SelectionofthisprogramresultsintheTaxMenubeingbroughtup.  -D)7 TwoStageProcessing  Theextractionprocess,aswasnotedearlier,isexecutedintwostages.koZJFz|s t`0* b@@@k """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""Thismethodensuresthatalldataenteringthemoduleiscorrectandthatthepreviouslyextracteddataisnotcorruptedbyincorrectdatabeingmergedwithit.Italsomeanstheentireprocesscanberunoverandoveragain,shouldtherebechangestothelegislationoriftherehasbeenaproblemwiththesystem.s{{}\LH~|< v 0 @ @s """""" """" Thefilescreatedbytheprocessare:̀COSFIL xx .DATandHTFIL xx .DAT  where xx isthetwocharactercodeofthefundsothatthetaxfileswhilebeingcreatedattheclientlevelare E fundspecific.TocreatetheinitialcostingfilechooseOption1oftheTaxMenuwhichwillgiveyouthepreviousscreen.Beforeproceedingwiththeextractionprocesscheckthatpricesandexchangerateshavebeeninputforthesecuritiesintheportfolio.s{{}\LH~|!tv 0 @ @sThenextscreenisforthecreationofthecostingfile.UnlesstheSpecificIDmoduleisbeingusedupdatingofthecostingfileisexecutedonaFIFO(firstinfirst11 """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""out)basissothatoption2ischosen.AuditTrail )$1 Runningtheupdateprocessgeneratesthe"InitialCostingErrorList"andthe"COSFILAuditTrail"whichwilldetailtheCreating,DeletingandAdjustingofparcels.Thiswillalsoidentifyanyerrorsthathaveoccurredduringtheextractionprocess.Anyerrorsidentifiedshouldbefollowedupimmediately.  -@)7 Themajorityoftheerrorsoccurbecauseofdataandtransactionsbeingprocessedbythesysteminanunexpectedorderfortaxpurposes.Typicalcausesforerrorsarethefollowing:̀*transactionshavebeenenteredinthewrongorder,̀*transactionshavebeenenteredusingthewrongtradedate,̀*transactionshavebeendeletedwithoutthetaxparcelbeingamended,̀*adjustmenttransactionshavebeenreferencedtoawrongtransaction.Inthemoduledocumentationthereisalistingofthedifferenterrortypes.    s{{}\LH~|Xvu 0 @ @s  4ReportsandScreenEnquiries 4 E TheTaxmodulesprovidefullreportingcapabilities.Thesereportscanbeproducedonarealisedorunrealisedbasis.AnumberofformatandinformationchangeshavebeenmadetothecapitalgainstaxmodulereportsinVersion6.Theimportanceofhavingfull,correctandtimelyinformationinproducingthetaxationreportsmustbeconveyedbothtotheusersofthetaxreportsandtothedataentrystaff.Thetaxreportsshouldberunandreviewed,atleast,onamonthlybasissothatanyerrorscanbeidentifiedandrectified.TheTaxProfit(Realised)andTaxLiability(Unrealised)reportshavetobeproducedonaclientbyclientbasis.Fundlevelreportsareabletobeproducedsimplybyleavingtheclientblank.TaxProfitorRealisedReport   TheTaxProfit(Realised)reportshowsthetaxableprofitontheacquisitionanddisposalofportfoliosecuritiesplusinterestfrommoneymarketandfixedinterestsecurities.ItisrunbychoosingOption3intheHiPortfolioTaxMenu.Thefollowingselectionsareavailable: """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""PrintforclientG  G Canbeleftblankforfundlevelreports )$1 PrintProfitReport " $UseYtorunthestandardtaxprofitreport )%2 PrintReconciliation " $LeaveblankifReconciliationreportnotrequired *@&3 ReconcileonBookorCost  'Ifreconciliationreportisrunthenoptionisgiventorun E+'4 G  G  $thereconciliationbasedoncostorbookvalueReportSequence  $Basedondisposaltransactiondate(D)orbyReport ,(6 G  G  $Groupsequence(G)Securities/Group  $Allowsusertonominatesecuritiesorreportgrouprange E.*8 G  G  $forthereportStartingdateG 9 G  $Startingdateforthereport /+: EndingdateG  G  $Endingdateforthereport 0@,; Includemoneymarket "0 $"Y"letsyouincludemoneymarkettransactionsintheE " " G  G  $reportIndexFI\DSG  G  $AllowsyoutoindexFixedInterestandDiscounted  G  G  $Securities,doesnotimpactontraditionalsecuritiesWhentheprofitreportisbeingrunsometimesthemessageErrorNopurchasesfoundforthissalewill  appear.ThisoccursifthesalecannotfindanappropriateparceltouseforthissaleandcanbepassedbypressingenteranditalsoindicatethatsomethingiswrongwiththetransactionthereforetheIDnumbershouldbenotedandthetransactionchecked.Theprofitreportprovidesdetailsofallsaletransactionsincludingtheparcel(s)used,theindexedvalue(ifapplicable)andthetaxableprofitorlosscalculated.Thereportcanbeprintedrepeatedlyandforanyspecifieddaterange.Iftheproceedsvaluefallsbetweenthecostandmarketvalues,neitheraprofitnoralossiscalculated.Thesameappliesif,afterindexation,theproceedsliebetweenthesevalues.Somespecialcodesareusedonthereporttohighlightthis:MG gIndicatesthattheproceedsfallbetweenCostandMarketvalue D =G vIndicatesthattheproceedsareequaltoeithertheCostorMarketvalue I IG :Indicatesthat,afterindexation,theproceedsfallbetweenCostand   G MarketvalueIntheCapitalGainTaxmoduleanydisposalsthathaveoccurredonacquisitionsmadebefore20/9/85willappearonthereportwithNiltaxprofit.WhileHiPortfoliohasthecapabilityofproducingataxprofitonaconsolidatedbasisifitisdonethenasalefromonefundmanagermaybematchedagainstapurchaseofanother.Thereportitselfshowsdetailsofthesaletransactionalongwiththeparcelsitallocatedthesaleto.Inthecapitalgainstaxmoduletheprofitorlossisshowninoneoftwocolumnsdependingonwhetheritistaxableornontaxable.IntheSuperannuationTaxmoduletherearecolumnsforcapitalgainsandlossesplusanincomecolumn.IntheCapitalGainsTaxreportanumberofadditionalitemsareincludedseparately.Thesearethetaxfreeandtaxdeferredamountsfrompropertytrustdistributions,anydisposalstaxableunders.26AAA,andtheindexationamountforappropriatesecuritiesheldforlongerthan12months.Includedinbothversionsofthereportaretheincomeitemssuchasinterestearnedandsubunderwritingcommission.TheinformationintheProfitreportcanalsobepresentedintheformofareconciliationreport.Thisreportsreconcilestheamountsusedfortaxationpurposestotheamountsusedinthebasesystemreports.TaxLiabilityorUnrealisedReport  &!- TheTaxLiabilityreportshowsthetaxableprofitonthenotionaldisposalofportfoliosecuritiesatthemarketvalueofthereportdatechosenplusandestimateofinterestfrommoneymarketandfixedinterestsecurities.  *D&3 TheTaxLiabilityreportisrunbychoosingOption5intheHiPortfolioTaxMenu.Thispresentsthescreenbelow.s{{}\LH~|<i vu 0 @ @s """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""Thefollowingselectionsareavailable:PrintforclientG  G  $CanbeleftblankforFundlevel @# ReportGroupG u G  $AllReportGroupsie.01to99 E$ PrintSummaryOnly (  $Canchoosebetweenthedetailedreportor  % G  G  $thesummaryreportonlyAsatdateG  G  $Nominatedvaluationdate !@' IndexFI\DSG  G  $AllowsyoutoindexFixedInterestandDiscounted E"( G  G  $Securities,doesnotimpactontraditionalsecuritiesIncludeOptionsG  G Allowsoptionstobeincludeorexcludedfrom #* G  G  $calculationsMarketvaluereduction $ $Enablescalculationsonnetrealisablebasis E%!, AswiththeTaxProfitReportwhentheTaxLiabilityReportisbeingrunthemessageErrorNopurchases E($0 foundforthissalemayappear.Thisgenerallyindicatesthatsomethingiswrongwiththetransaction  )$1 thereforetheIDnumbershouldbenotedandthetransactionchecked.RunningtheLiability(Unrealised)reportenablesanadditionalcheckonsecuritiesbeforetheyaredisposedofand'hit'theTaxProfitreport.Thisreportissimilarincontenttotheprofitreportbutrelatestocurrentholdingsorholdingsataparticulardateratherthantosalesthathavetakenplace.Thesamespecialcodingisusedtoindicatewhereproceedsfallwithrespecttooriginalandindexedcosts. -H)7 Thereportisrunataparticulardateandshowstheamountofprofitorlossthatwouldhavebeenrealisedhadallholdingsbeensoldonthatdate. 0L,; Thisenablestheusertodeterminetheextentofhisunrealisedtaxliabilityatanytime.ThereportmaybebackdatedbutfortheSuperannuationTaxmodulesthisisrestrictedbackto30thJune1988.OtherReports @ OtherreportsobtainablefromthetaxationmodulesaretheSalesSummaryreportandtheDividendImputationAnalysisreport.TheformerpresentstheinformationgivenintheTaxProfitreportinamorecompressedformat,andtheDividendImputationAnalysisreportshowsthebreakupofalldividendsreceivedincludingtheFrankedpercentage,TaxFree,TaxDeferredandWithholdingTaxamount.Thislatterreportispreparedonasettledbasissothatallcomponentsofthedividendareknown.Anumberofscreenenquiriescanbemadeofthetaxationparcelsthroughoption2oftheTaxMenu.   @   5HowtheCostingModuleWorks  E  Introduction   TheCostingmoduleisdesignedtoallowtheaccountingforinvestmentportfolioassetstobedoneonaparcelbasis.ThisovercomestherestrictionofthecurrentaccountingbasisoftheHiPortfoliosystemwhichisbasedonaveragecost.WhileoneofthesidebenefitsofusingtheCostingmoduleforusersoftheAustraliantaxmodulesisthattheycanusethesameparcelbasisforboththeiraccountingandtaxationcalculations,itmustberememberedthatthiswasnottheprinciplereasonforthemodule'sexistence.Thereforeitcannotbeexpectedthatthetaxationandcostingparcelprocesswillalwaysresultinperfectalignment. Setup    TheparametersdefinedfortheCostingmodulehaveamajorimpactonhowthesystemoperates.These @  parametersaresetatthemodulelevel,atthefundlevel,attheclientlevelandwithinaclientatthesecuritylevel.ThedifferentlevelsofparameterisationcanbethoughtofasfiltersforhowtheCostingprocesswilloperateforparticularsituations.ModuleParameters  ThemoduleparametersaresetviaReferenceFileMaintenace,menuoption1.4.6.Afterenteringthe"CO"modulecodetheuserispresentedwiththefollowingscreen:s{{}\LH~|<)vu 0 @ @sTheuserisaskedtochoosewhichcategoryofsecuritiesmaybecostedonaparcelbasisforthisdatabase. """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""Itisimportanttonotethatif"N"ischoseninanyofthefivecategoriesatthislevelthennofundinthisdatabasewillbeabletouseparcel-basedcostingforthisparticularclassofsecurities. 0@,; ЇThefinaloptionallowstheusertochoosethecurrencyinwhichthetransactionsavailableformatchingaretobeshown.FundLevelFlags @ s{{}\LH~| vu 0 @ @sAtfundleveltherelevantcostingflagsarefoundonthethirdscreenasseenbelow:ThefirstflagcontrolswhetherCostingistobeusedinthisfundwhilethesecondflagdefineswhetherSpecificIDistobeusedbyanyclientsinthisfund. """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""Turningcostingonoroffforafundisarareeventandnotsomethingthatwouldbedoneonaregularbasis.Toreinforcethis,changingthefundlevelcostingflagrequiresthattheoverrideflagbeusedtoensureachangeofmethodologyisnotdonefrivolously.Whenthisflagisbeingchangeditisrecommendedthatanyoutstandingtransactionsbeupdatedandthattherearenootherusersleftinthefund.Aswellanumberofalgorithms,suchasFIFO,thecostingmoduleallowsforholdingstobecostedonaspecificidentificationoradhocbasis.Thismeansthatwhenadisposalcomestobecostedtheusercan '@#/ useanyoftheavailableparcels.Again,ifSpecificIDissetto"N"atthefundlevelthennoclientsinthatfundwillbeabletousespecificlotselectionforitscosting.Theotherconsequenceofsettingthisflagistodefinehowmuchofthecostingprocessisdoneautomatically.WiththeSpecificIDisset"Y"thentheusermustgointothecostingmenuandmanuallystarttheupdateprocess(MenuOption2.4.1).Whentheflagissetto"N"thentheclientsinthefundareeithernotusingcostingorareusingoneofthefouralgorithmsasthebasisforallocation.Sincethemethodforselectingparcelsisalreadydefined,thismeansthatthecostingprocesscanberunasanextensionofthenormalbatchupdateroutine. 0D,; ClientLevelFlags E Atclientleveltherelevantcostingflagsarefoundintwosectionsofthefirstmaintenacescreenasseenbelow: """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""Theclientlevelflagsarelargelydeterminedbywhathasbeensetatthehigherlevel.t{{}]MI~|evu p @ @tThefirstflagthatneedstobesetistheParcelBasiswhichcanbesetatthefollowing: " ̀N8forclientportfoliosthatdonotrequirecostingtobeused,I$ ̀C8forclientportfoliosthatareusingparcelbasisforboththeircapitalgainstaxandaccounting  & purposes,  ̀S8forclientportfoliosthatareusingparcelbasisforboththeirsuperannuationtaxand  #) accountingpurposes,  ̀M8forclientportfolioswhicharenottaxclientsbutareusingaparcelbasisforaccounting I%!, purposes.  Itispossibletohavewithinthesamefunddifferentclientswithencompassallfourparcelbases.WhencostingisturnedonthefundleveltheAutoupdateflagisnotaccessibleandwillautomaticallybesetat"Y" I($0 meaningthattheholdingfile(HTFILxx)willbeautomaticallyupdatedfollowingbatchupdate.TheotherflagsintheTaxationIntegrationareawillonlyberelevantforclientportfoliosusingoneoftheAustraliantaxmodules.Thenextsetofselectionsrequiredistodecideforthisparticularclientportfoliowhichsecuritycategorieswhichbecostedonaparcelbasisandwhichwilluseanaveragecostbasis.Accesstoeachinstrumenttypewillcontrolledbywhether,atthemoduleparameterlevel,theseinstrumenttypeshavebeenturnedon.Forclientportfolioswhichdonothavecostingturnedonthesfieldswillnotbeaccessible. 0H,; TheCostingflagcanbesetatoneoftwooptions: E ̀A8useaveragecostforthisinstrumenttype ̀S8useaparcelcostbasisforthisinstrumenttype.I ThefinalflagistheAllokoZJFz|'v_ `0*b@@@kcationmethodwhichdefineswhichparcelbasisischosen.Therearefive  possibilities:̀F8FirstInFirstOutorFIFObasis,whereanydisposalismatchedoffagainstthefirstavailable    acquisition;  ̀I8KLastInFirstOutorLIFObasis,whereanydisposalismatchedoffagainstthelatest M   acquisition;  ̀P8ProfitMaximisation,wheretheparcel(s)arechosenwhichcreatesthelargestpossible H  profit,orsmallestpossibleloss,foranydisposal;  ̀L8LossMaximisation,wheretheparcel(s)arechosenwhichcreatesthelargestpossibleloss,   orsmallestpossibleprofit,foranydisposal;  ̀S8SpecificID,thisoptioncanonlybeselectediftheSpecificIDflagissetto"Y"atthefund   level,thisallowsparcelstobeselectedonanadhocbasisforanydisposal. Accessibilitytothisfieldisagaindeterminedbywhathasbeenselectedbeforehand.Forcostingonlyclientswhen(A)verageischosenastheCostingbasisthentheAllocationfieldisleftblank.  ForclientportfoliosusingoneofthetaxationmodulestheAllocationfieldstillneedstobeset,evenwhen T (A)verageischosenastheCostingbasis,asthiswilldefinehowparcelsaretobeselectedfortaxation ] purposes.Oncetheseflagshavebeensetandinusethenclientsshouldbewaryofchangingthemwithoutfirstconsideringtheimpact.Changingtheallocationmethodwouldhavetheleastintrusiveimpactasitsimplymeansthatfromthetimeofchangeparcelswillbeselectedonadifferentbasis,itwillnotaffectparcelsalreadyallocated.Buteventhisisnotstraightforwardparticularlyifaparcelshavebeenunmmatchedastheymaybereallocateddifferently.Changingfrom(A)verageto(S)pecificcostingbasishasamuchgreaterimpactastherewillnotbeaparcelhistoryavailablefromwhichtomatchoff.AsimilarproblemexistsforclientportfolioshavingnotusingcostingtosuddenlyturningcostingoniftheyhavenotpreviouslybeenusersoftheAustraliantaxmodules. RelationshipbetweenTaxandCostingModules  !#) OneofthemajorchangesinVersion6,comparedwithVersion5,ishowtheTaxationmodulesinteractwiththeCostingmodule. """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""0\,;"""" ToalargeextentCostingintheearlierversionexistedasaseparateentityfromanytaxationprocessing.TheseparationwasobvioustotheuserwhoperformedthecostingupdatebyrunningtheIMATCHprocessandthenwasrequiredtorunanupdatefromthetaxmenu.InVersion5anumberofstepswereinvolvedifauserwantedtorunbothCostingandTaxforaparticularclient.Anytransactionsenteredintothesystemneedtobewrittenintoaholdingfile(HTFIL),atthesametimetoallocatetheparcelsinthebasisrequireditwasnecessarytorunIMATCHwhichrecordedhowparcelshadbeenallocatedontheXRFFIL.Thefinalstepwastorunthecostingupdateinthetaxmodule,whichbyinterrogatingtheXRFFILallocatedthetaxparcelonthesamebasisastheaccountingparcels.ThechangeinVersion6canbeseeninthenextdiagram. """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""koZJFz|t`0*b@@@k߳InVersion6theupdatingandmatchingforboththetaxandcostingisdoneatthesametime.TheprocesshasbeenstreamlinedsothatitisnolongernecessarytohaveafilesuchastheXRFFILinwhichtoholdthematchinginformation.IntheearlierversiontheuserhadthechoicebetweenhavingtheHTFILupdatedautomaticallywhenaninvestmentbatchwasupdatedortoupdatetheHTFILwhenrunningthetaxationupdate.ThislatteroptiontomanuallyupdatetheHTFILhasbeenremoved.Anotheradvantageisthatthepossibilityofrunningthetaxandcostingupdateoutofsequenceisnolongeraconcern.InVersion5therewasadangerofdataproblemsoccurringifthetaxinformationwasupdatedbeforetheIMATCHprocesswasrun. CostingProcessing  ,'5 Thecostingmodulehasundergonearadicalchangebetweenversion5andversion6,evenwithinversion6fairlydramaticstructuralchangeshaveoccurredthathavemovedtheprocessingawayfrombeingfundandtransactionIDdependant,tobeingclientanddatedependant.Ascanbeseenabove,thecostingmodulenowoperatesinasimilarfashiontothetaxationmodules.   /+:  0@,;  DependingonwhethertheSpecificIDflagissetto"Y"or"N"atthefundlevel,thecostingupdateprocess E canbesetofffromtheCostingmenu(Option2.4.1)orautomaticallyfromthebatchupdate.Theprocessfollowedisthesamenomatterwhichstartingmethodisused.Theroutinewillsearchthroughtheholdingfile(HTFILxx)isdateandtransactionIDordercreatingparcelsonthecostingfile(COSFILxx)foranyacquisitions,andallocatingparcelsfromthecostingfileforanydisposals.Whenitcomesacrossanundissectedtransactionitwillactuallystopprocessingsincethismayimpactonhowfuturedisposalsareallocated.Forthisreasonwhenaproblemoccurswithcostingoneofthefirstfactorstolookforistoseeifthereareanyundissectedtransactionswhichmaybeblockingtheprocessing.vdThemajordifferencefromthetaxupdateprocessisthatwhendisposalsareallocatedbythecostingupdateachangeismadetothedisposaltransactionrecord.Untilthecostingprocessisrunanynewdisposalwillhaveacostofsaleequaltozero.  Ih 6ParcelEditingandDeletions  E  HiPortfolioallowsforthetaxparcelscreatedoutoftheupdateprocesstobeadjustedtoarriveatdifferentgainorlossfiguretothatgeneratedautomaticallybythetaxationmodules.Pressingoption1ontheEditParcelsubmenuwillresultinthefollowingscreen: """"""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""""  """"""t{{}]MI~| vU p @ @tQIQTypically,thiswouldbeusedwhereHiPortfoliodoesnotproducethecorrectfigurewithoutmanipulations.Someexamplesare:oG ITaxfreesecurities E"( oG ITakeonofclientswithdifferenttaxandaccountingbases #) ButitisimportanttonotethatwhiletheEditParceloptionisavailable,itshouldnotgenerallybeusedasitisverytimeconsumingtomaintainAdjustedparcelsoveralengthyperiodoftime.ItisalsoimportantthatarecordbekeptofanyadjustmentsmadeviaEditParcelasanychangeswillbelostifthetaxhistoryfor &!- aparticularsecurityisdeleted.SWhenthescreenisinEditmodeofthefieldscanbechanged.BeforeyouattemptchangesotherthantothecostfieldsitisadvisabletocontactHiPortfoliosothatyoucanbemadefullyawareoftheconsequences.ThereisalsotheabilitytodeleteparcelswhileinEditmode,thisisexceedinglydangerousunlessitisdonecarefullyasitwillresultinnotenoughparcelsbeingavailableforsubsequentsales.SimilarsituationscanoccurwhenmanipulatingtheSaleandPurchaseIDsonaparcelsasitcanaccidentallyresultinparcelsbeingaddedtoorremovedfromavailability.SInordertoreinforcetotheusertheseriousimplicationsthatresultfromchangingataxationparcelitis /+: necessaryfortheusertoobtainapasswordfromHiPortfolio. 0D,; ЇWiththecostingmoduleontheopportunityforuserstoeditparcelshasbeenremoved.Thereasonforthisisthattheaccountingcostsheldonthecostingfilearefloweddirectlythroughtotheinvestmenttransactionrecord.Giventhisabilitywithoutadetailedknowlegeofhowthecostingandbasemodulesinteractitwouldbetooeasytocreateasituationthatbringthecostingandinvestmentrecordoutofalignment.tisstronglyrecommendedthatparceleditingbekepttoabareminimum.InearlierversionsofHiPortfoliotherewereanumberoftaxationtreatmentswhichthesystemdidnotsupportbutinthecurrentversionveryfewsituationscannotbecateredfor.TaxFileDeletions    IfanydeletionoftransactionsisdoneitmaybenecessarytodeletetheCOSFILfortheindividualsecurities.ThisisdoneviatheF1programTAXDEL. ""                                                              ""ChoosingOption1DeleteCostingFilegivestheuserthenextscreen.s{{}\LH~| sv 0 @ @sTheuseridentifiestheclientandthenthesecuritythatistobedeletedfromthetaxcostingfiles.ByleavingthesecurityfieldblankalltaxationparcelsareremovedfromtheCOSFIL.Thesystemproducesalistingofparcelsthathavebeendeleted.Theseshouldbecheckedtoensurethatonlytheexpectedtransactionsaredeleted.Thereareothersituationswherethetaxfiledeletionprocessmayberequired.ArecentexamplewastheintroductionofanewflagforprocessingoffixedinterestsecuritiesintheCapitalGainsTaxmodule.InordertoimplementthenewprocessingitwasnecessaryfortheusertorunTAXDELforthesecuritiesinquestionandreruntheupdateprocess.  0@,;   7ProblemIdentification   E ItisinevitablethatoverthecourseoftimesomeproblemsmayarisewiththetaxationprocessinginHiPortfolio.Mostoftheproblemsarisetendtobedatarelated.Sometypicalexamplesofproblemsthatoccurare:̀*PurchaseparcelsincorrectlydeletedfromCOSFIL̀*SaletransactionsincorrectlydeletedfromCOSFIL̀*ParcelIDsincorrectlyeditedonCOSFIL̀*TransactionsdeletedfromITRFILbutnotCOSFIL̀*Transactionsdatedincorrectlỳ*InappropriateuseoftransactiontypesWhenerrorsarefoundorproblemsdooccurthenfollowingsomestraightforwardstepsshouldhelpinidentifyingandresolvingtheprobleminmostcases.Primarilythisinvolvescomparingthetaxationparcelstotheunderlyingtransactionsinthebasesystem.Thiscanbedonebycomparingatransactionlistingofthesecurityinquestion,plusanyassociatedsecurities,withalistingofmatchedandavailableparcels.s{{}\LH~|vU 0 @ @sThisparcellistingisaccessedthroughOption2DisplayAllParcelsfromtheEditParcelssubmenu,andwillresultinthescreenabove:ThemainitemstolookforaretransactionIDswhichappearononelistingandnotontheother.Youshould !"!"""  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"  !"!"!"!"0@,;!"!" alsocheckofftheparcelmatchingfordisposalstomakesurethattheyarematchedoffasexpected.InthetransactionlistingsomeofthesituationstolookoutforareNilunitstransactionssuchasdividends,whicharedatedafteraholdinghasbeenclosedoutandadjustmententriesappearingasanopeningtransactionorasameansofreplicatinganothertransaction.Anotherpointer,althoughitmaynotbeparticularlyaproblem,iswherethetransactionIDsforthesecuritydonotruninchronologicalorder.DeletedTransactions    Extremecautionshouldbeusedwhendeletingtransactionsastheorderofprocessingmaybedisruptedbydeletingatransactionoutofsequence.DuetothestrictmatchingprocessincorporatedintheModule,deletingtransactionscancauseerroneousinformationtobeoutput.Forexample,deletingasalethathasbeenmatchedtoaparcelwouldcausethesystemtoreportincorrectinformationontheparcel.ItisimportanttorememberthattheprocessingoftransactionsfortaxationpurposesisbasedondateratherthanIDorderwhichthebasesystemusestoprocesstransactions.DeletingorbackdatingtransactionsafterthetaxfileshavebeenupdatedcanmeanthattheparcelsontheCOSFILareoutofdatesequence. CostingFileUtilities  E Inordertoaidintheidentificationandsolvingoftaxandcostingproblemsasuiteofdiagnosticprogramshaverecentlybeenaddedtothesystem.TheseprogramsareundertheUtilitiessubmenuwhichisoption3ontheCostingmenuandoption9ontheTaxmenu.Bothdresultinthefollowingscreen:d 0@,; Theseprogramslettheuserdocomparisonsbetweenwhatrecordsareontransactionslfileandthoseonthecostingfile.Italsoprovidesextractsofthecostingfilenandtheholdingfile.n       AppendixA E TreatmentofDifferentSecurityTypes d  d      PropertyTrustDistributions  AssumetheXXXfundheld100,000unitsintheZZZpropertytrustwhichitpurchasedon15September,1986for$2.50each.On11October1987and15October1988ZZZpaiddistributionsbothofwhichincludedataxdeferredcomponentsof30centsperunitandataxfreecomponentof10centsperunit.Thisinformationistabulatedbelow:DateG 9 G Units  )O ,Price8:WBCPI E  15/9/86G 100,000 $$2.50O1O3:77.6    G  G TaxDeferredO_0TaxFree;WBWICPIFactor E  11/10/87 e $0.30 a *O ,$0.108:WB85.5M1.102   15/10/88 e $0.30 a *O ,$0.108:WB92.0M1.076 E  30/8/89G ValueDate b 'O ,O3:97.4W:F1.059   TheHiPortfolioreportsshowascosttheReducedCostbase,calculatedasfollows:OriginalCostlessTaxDeferredamounts\<$2.50($0.30+$0.30)=$1.90  TheindexedCostbaseiscalculatedasfollows:IndexationofCosttofirstdistribution?=$2.50*1.102=$2.755  lessTaxDeferredamountOB-O3:$2.755$0.30=$2.455 @ IndexationofCosttoseconddistribution>>$2.455*1.076=$2.63082  lessTaxDeferredamountOB-O3:$2.63082$0.30=$2.33082  IndexationofCosttovaluedateO5O3$2.33082*1.059=$2.46834 E  TheValueUsedinalossscenarioiscalculatedasfollows:ReducedCostlessTaxFreeamounts7$1.90($0.10+$0.10)=$1.70 E$ Scenario  & Sobasedontheabove,iftheunitsweretobedisposedon30August1989then,acapitalgainwouldariseifthedisposalpriceexceeded$2.46834acapitallosswouldariseifthedisposalpricewaslessthan$1.70thedisposalistaxneutralifthepricefellbetween$1.70and$2.46834.  )$1 ConvertibleNotesConversions E Therearespecialrequirementsrelatedtothetaxtreatmentofconvertiblenotes.Theissueisthattheconversionfromtheconvertiblenotetothetargetsecurityisataxableeventwhichisnotthecaseforcodeconversionsingeneral.AssumetheXXXfundheld100,000unitsintheZZZconvertiblenoteswhichitpurchasedon15September,1989for$2.50each.On11October1991thenoteswereconvertedtoZZZordinaryshareswhentheordinaryshareshadamarketvalueof$3.20.Theordinaryshareswerefinallysold15May1993for$4.00.Thisinformationistabulatedbelow:DateG 9 G Units  )O ,Price8:CPI  @  15/9/89G 100,000 $$2.50O1O397.4   11/10/91 e MarketValue:$3.20 <107.6 @  15/5/93G 100,000 %$4.00O1O3109.3   Thetaxableincomeiscalculatedasfollows:Asatconversiondate:MarketvalueoftargetstocklessOriginalpriceofCN b )O ,O3100,000*(3.202.50)=$70,000.00 E whichisrecordedasanincomeitem.Asatsaledate:ProceedsfromSalelessMVoftargetstockonConversionm5100,000*(4.003.2512e,eaeeԀ)=$74,880.00 @ whichisrecordedasancapitalprofititem.Note(a):3.2512=3.20*(109.3/107.6)