The Fund Accountant: Get Desk Ready in 5 Hours

Learn how corporate actions affect equity holders and CFDs, including dividends, rights offerings, stock splits, mergers, spin-offs, and the resulting cash flows and share adjustments in fund accounting.

Learn how stock dividends distribute additional shares proportional to holdings with no cash, increasing shares while the market price falls, and explore the fund impact and fractional shares.

Explore how stock splits, reverse stock splits, stock dividends, and bonus issues change the number of shares and share price without cash flow, while preserving total holdings value.

Explore how takeovers, mergers, and spin-offs affect fund accounting, nav, and market value. See how cash offers, stock-for-share deals, and demergers influence portfolio values with comparable pre- and post-action nav.

Explain how a rights issue lets shareholders buy discounted shares to avoid dilution, using a Tech Innovations Fund example with ten rights for three shares at $4.50, expiring May 20.

Explore the definition of contracts for difference (CFDs) as OTC derivatives that let you speculate on price movements without owning the asset, with initial margin and no expiration.

Understand long equity CFDs, applying initial margin concepts and profit calculations through a 10,000 CFD example moving from $50 to $65.

Learn how margin interest accrues daily for equity CFD, with a $500k notional position funded by a $400k loan at 2% per day and possible commissions or stock lending fees.

Open a short position by selling 10,000 high tech CFDs at $20; buy to close at $18 to realize a $20,000 gain. The fund earns 2% interest income.

Explore how dividends affect long and short CFDs: a long CFD earns dividend income when the underlying goes ex, while a short CFD bears dividend expense.

Understand how equity CFD resets work, where weekly re-openings crystallize gains, interest expense, and dividend accrual; note some accounts may not use regular resets.

Discover why equity CFD trading appeals: gain exposure to assets without owning them, take long or short positions, and trade on margin worldwide with no stamp duty.

Explore how fund accounting systems handle equity CFDs, why CFDs fall outside standard security master file templates, and how futures or total return swaps model CFD positions for reporting.

Master CFD trades by the four core actions—buy to open, sell to close, sell to open, and buy to close—based on opening or closing positions and going long or short.

Explore how equity CFDs incur zero cost and require no payment to hold a position. Learn how collateral payments secure the investment while the cash remains the investor's.

Compute realized gains or losses on CFDs by multiplying the CFD count by the opening–closing price difference, with standard, mini, and micro lots and FIFO, LFO, or average cost methods.

Calculate CFD unrealized gains or losses for nav by multiplying the number of CFDs by the difference between opening and current prices, or since the last reset price.

Discover how equity CFD pricing uses the underlying asset's market price, link CFDs to the asset in accounting systems, and enable automatic dividend accrual and NAV calculations.

Understand how dividend income works for long and short equity CFDs, NAV impact on ex-date, and the verification and tax considerations for CFDs, including index CFDs and dividend adjustments.

Illustrates a four-for-one stock split in CFDs, where 500 shares become 2000 and value stays 50,000 with no cash flow, closed and reopened at the post-split opening price.

Learn how fund accountants handle rights issues for CFDs, including valuing the rights, booking a dummy CFD at zero, and updating holdings and realized gains when exercising.

Close and reopen CFD positions at the reset date to crystallize realized and unrealized gains or losses. Verify the cash flow supports the fund's NAV, including dividends and interest.

Explore currency forwards in fx markets, explaining trade date and settlement date, the difference from spot trades, otc structures, collateral, and how forwards hedge or speculate against currency risk.

Learn how forward rates link spot rates and interest rate differentials in currency trading, using bid, ask, and forward points. Understand direct and indirect quotes and the role of arbitrage.

Calculate realized gains and losses on currency forwards by comparing trade rates to settlement rates, with examples of yen and CHF; assess unrealized gains and nav impact on open forwards.

Investment funds use currency forwards to take directional bets on exchange rates and to hedge currency risk, aligning with valuation policies and forward rates.

Explore currency risk for funds when redemption proceeds are paid in a non-base currency and how hedged share classes use forwards to lock rates and stabilize navs.

Explore fixed income securities' key features—yield, maturity, coupon, credit rating, and liquidity—and examine diverse types, including government, corporate, sovereign, municipal, and mortgage-backed bonds.

Explore long term fixed income securities, including bonds issued by governments and corporations, with fixed or floating coupons, and understand zero coupon bonds and stripping for capital appreciation.

Explore money market instruments, short term fixed income products maturing within a year, such as commercial paper, certificates of deposit, and treasury bills, plus repo structures.

Compute accrued interest and interest receivable for nav by applying daily interest factors across days in the period, using common day count conventions (30 by 360, actual by actual, etc.).

Compute the daily interest factor by dividing the annual coupon by 360, then apply it to days from the last coupon date to settlement under the 30 by 360 convention.

Discover how hedge funds apply management fees and performance fees, including the two and 20 structure, and how high water marks and net asset value drive fee calculations.

Illustrate performance fee calculations using gross asset value, high water mark, and a 20% rate across quarterly periods. Learn how nav and gav interplay in example fund scenarios.

Explore high water marks, crystallization of performance fees, and hurdle rates, and learn how NAV movements determine payable fees and fund incentives.

Show how performance fees should be accurately calculated and equitably allocated when new investments occur during the fee period, preventing misallocation and a free ride.

Explore the series of shares method to compute and distribute performance fees, with per-series nav, high water marks, and monthly gav, and learn how consolidation can reduce active series.

Track performance fee balances across periods using the equalization credit method, calculating EQ and Ed against the high watermark and PFF to ensure fair charges.

Master fund accounting fundamentals, including net asset value calculation and subscriptions and redemptions. Understand corporate actions, CFDs, currency forwards, fixed income securities, and performance fee structures.