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Limitations of the BGL Data Download extract

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Limitations of the BGL Data Download extract Powered By Docstoc
					BGL Simple Fund Data Downloads
                     User Guide




                       March 2007




      Page 1 of 14
Contents

1      INTRODUCTION .........................................................................................................................3

2      TIPS AND TRAPS OF THE BGL DATA DOWNLOAD EXTRACT......................................4
    2.1     GENERAL OVERVIEW ...............................................................................................................4
    2.2     TAXATION TREATMENT OF TRANSACTIONS CONTAINED IN THE BGL EXTRACT .......................4
       2.2.1 GST treatment of standard assets .......................................................................................4
       2.2.2 GST treatment of Private Assets .........................................................................................5
       2.2.3 Tax Reporting .....................................................................................................................5
       2.2.4 Tax Profile Status ...............................................................................................................5
       2.2.5 Selection of CGT Parcels on Sales .....................................................................................5
    2.3     CORPORATE ACTIONS ..............................................................................................................6
3      USER GUIDE ................................................................................................................................7
    3.1        DOWNLOADING BGL DATA REPORTS .....................................................................................7
    3.2        ACCOUNT SETUP......................................................................................................................8
    3.3        TRANSACTION UPLOAD ...........................................................................................................9
4      OTHER INFORMATION YOU NEED TO KNOW................................................................10

5      MORE INFORMATION ............................................................................................................11

6      APPENDIX A: MKC TO BGL TRANSACTION TYPE COMPARISON ............................12




                                                                Page 2 of 14
1      Introduction
BGL Simple Fund is an accounting software package used to administer Self Managed Super Funds
(SMSFs). Amongst other things, BGL Simple Fund is used by accountants to manage SMSF clients’ tax
and produce end of year financial and tax statements.
A large proportion of accountants who have SMSF clients use BGL Simple Fund computer software for
managing these SMSFs. BGL software is currently being utilised by more than 180,000 SMSFs either
directly or indirectly through their accountants for their compliance work.

BGL Simple Fund has the ability to import data from external administrators such as MasterKey
Custom (MKC).
MasterKey Custom Self Managed Super clients can invest via the:
    1. MasterKey Custom Investment Service (MKCIS), or
    2. MasterKey Custom Self Managed Super (MKCSMS)
MKCSMS is a full service which provides asset administration and compliance administration
(including accounting services, tax reporting, auditing, etc). However, the MKCIS only provides asset
administration. Therefore, any SMSFs held within the MKCIS need to arrange for their tax reporting to
be done externally by an accountant.
In order to produce end of year financial statements and tax statements for SMSFs investing via the
MKCIS, accountants are currently required to manually enter client transaction data into their own
internal administration systems, such as BGL Simple Fund.
The BGL Simple Fund download facility will provide advisers with a client’s transaction file, thereby
removing the need to manually enter transactions. The MasterKey Custom BGL Data Download has
been designed to support SMSF clients within the MKCIS.




                                             Page 3 of 14
2           Tips and Traps of the BGL Data Download extract
    2.1      General overview
BGL users should be aware of what is and what is not included in the BGL data download files.

1. The BGL Data Extract process takes MasterKey Custom Investment Service (MKCIS) transactions
   held at client level and passes these as an extract file for upload into BGL Simple Fund software.
2. BGL users may use various accounts for similar purposes. When this occurs, the BGL user will
   need to move the transactions to the account of their preference after the upload has been
   completed. Please see ‘Appendix A: MKC to BGL Transaction Type Comparison’, which provides a
   comparison of MKC transaction codes and BGL account references.
3. Extracts can be run at any time and at multiple times for a financial period.
4. The BGL extracts generated from MKC will only include the client’s transactional data. The extract
   will not include CGT calculations.
5. All non-zero cash and asset transactions (i.e. not superannuation accruals) that have been posted
   to MKCIS accounts for the last financial year will be available. This will include all available tax
   balances for income transactions (i.e. including a break down of income distributed to client
   accounts).
6. The transactions will be posted to the BGL chart of accounts via the BGL xml. definition file. The
   classification of these transactions will not be the same for every case, as individual accountants
   may treat the transactions in different ways for their clients.
7. The BGL user needs to assign a default unit price of $1.00 for the cash asset.
8. All receipts will be classified and posted to Member Undeducted within BGL Simple Fund. The
   client’s accountant will need to re-classify transactions if any changes are required. As a MKCIS
   account does not split into member level, contributions will be defaulted to the first member in
   BGL and the accountant will need to allocate it to the relevant accounts.
9. Income received after the end of the tax year, but belonging to the tax year, will be posted to an
   income accruals account. BGL Simple Fund holds this income in an accrual account. This
   accrual account is not linked to the asset, so the extract will not post the transaction directly to
   the correct account. The transaction will be posted to Sundry Debtors and the accountant will
   have to re-classify the transaction as required.
10. Unclassified expense transactions will be put into the suspense account. In these instances, the
    BGL user can decide where to allocate these expenses, in order to be reclassified to the
    appropriate accounts.
11. Assets that do not match against an ASX or APIR asset code (e.g. Private Assets) may appear as
    “unknown” or “other”, once imported into BGL Simple Fund. In these circumstances, the asset
    codes in BGL Simple Fund can be renamed, so that in the future the code can be matched.
12. If client data is changed once it is imported into BGL, it may not necessarily reconcile with the
    client’s statements provided by MKC.

    2.2      Taxation treatment of transactions contained in the BGL extract
    2.2.1     GST treatment of standard assets
•     The MKCIS platform itself is recognised as an entity for Goods & Services Tax (GST) purposes.
•     As a result, GST credits in relation to fees and charges collected through the MKCIS are generally
      claimed in the Business Activity Statement (BAS) of the platform entity.
•     Therefore, amounts credited to client accounts are inclusive of both GST and reduced by any
      available GST credits. No GST credits are available to be claimed by investors in their own right.



                                               Page 4 of 14
    2.2.2   GST treatment of Private Assets
•     The exception to the rule mentioned in section 2.2.1 above, occurs in relation to Private Asset
      holdings in the client’s own name.
•     Any fees and charges (or other GST related transactions) in relation to these holdings that are
      charged directly to the member’s own name (even if paid from the IDPS account) do not have any
      GST credits claimed by the MKCIS. In these circumstances, the GST credits may be eligible to be
      claimed in the investor’s own BAS.
•     Private asset purchases and sales will be similar to shares in operation. Investment accounts
      corresponding to MKC asset codes must be created in BGL. If the fund is entitled/liable for GST
      on the purchase/sale, the accountant will need to process this themselves.

    2.2.3   Tax Reporting
•     Tax Reporting and BGL data in relation to expense amounts are based on the assumption that
      investors are not eligible to claim any GST credits in their own right (including Private Asset
      holdings).
•     Therefore, in preparing client accounts and tax information using this BGL download it should be
      ensured that:

      1. No GST credits are claimed in relation to platform fees (unless charged to the investor in their
         own name on Private Assets); and
      2. If GST credits are claimed, then the amount of any tax deductions relating to the expenses of
         those credits are reduced by the amount of the GST credits claimed.

    2.2.4   Tax Profile Status
Data may not be complete or correct where:

1. An investment asset has not yet made its final or only distribution for the previous financial year
   (which can continue to occur until as late as October each year);
2. In-specie transfer of assets have occurred and cost base details have not been loaded into the
   MKC system; or
3. Adjustment transactions are required in relation to particular asset types (i.e. warrant
   investments) where the data for those transactions has not been received.
•     If a previously uploaded transaction (e.g. Pre-Tax Profiled data) is extracted subsequently,
      providing the (Unique I.D.) reference has not changed, any data changes will be reflected in BGL.
      If income has been received but no tax profiles loaded, the first extract will have the income
      dollars but no tax profile data. After the tax profile is received and a subsequent data load
      extracted, the transaction will contain the tax profile data as well as the income data.
•     All clients will be assumed to be Australian “Residents” and have a valid Tax File Number (TFN)
      for tax purposes.

    2.2.5   Selection of CGT Parcels on Sales
•     The MKCIS offers investors and their advisers the choice of which parcel to dispose of when a
      partial disposal of an asset occurs. The choice of these parcels is then reflected in the CGT
      details reported in annual tax reports and through on-line reporting services.
•     However, as only transactional data will be loaded into BGL, the choice of parcel information is
      not uploaded into BGL and accordingly, it is possible that different parcels may be treated as




                                               Page 5 of 14
      being disposed of by BGL Simple Fund. This would not only result in different CGT outcomes for
      that sale, but also for unrealised CGT positions and in relation to future sales.
•     Therefore, CGT Parcel Selections nominated at the time of sell down of an asset will not flow
      through to BGL Simple Fund. CGT Parcel Selections can be made after importing the client data
      into BGL Simple Fund. Consequently, CGT Parcel selections made via the MasterKey Custom
      website may not reconcile with the CGT Parcel selections made via BGL Simple Fund.
•     For share purchases, buys will show a pending date as the cgt_date (i.e. the date of the
      transaction is the date of the pending buy, not the date of the confirmation).

    2.3   Corporate Actions
•     Corporate actions will not be included in the data extract.
•     The client’s adviser will be provided with a list of corporate actions from MKC and the accountant
      should refer to the client’s adviser to ensure they have captured these events into BGL.
•     BGL Simple Fund has specialised wizard-based screens designed to handle the variety of unit
      and CGT consequences of corporate actions.




                                               Page 6 of 14
3         User Guide
    3.1    Downloading BGL Data Reports

Step 1: Access the Client Reports screen from Custom Online > Client Reports on
        masterkeycustom.com.au.
Step 2: Select the Data Downloads option under Select Report Type.
Step 3: Select the Clients or Groups option under Select member(s) and then highlight the client(s)
        for whom you wish to download data.
Step 4: Under Select Report(s), highlight the BGL Simple Fund option (this will be the only option
        listed).
Step 5: Under Select Range(s) select the period for which the report is to span. You may run the
        extract for either a Financial Year or a Period Range.
Step 6: Select Request Download.




                                            Page 7 of 14
Step 7: The report will then be generated in XML format and be made available to download from the
         Download Centre.




Step 8: Click on the link to the file under Report Type.
Step 9: Save the downloaded file to your computer.

    3.2   Account Setup
•     An account needs to be setup in the following way:

1. The "Reference" field in the Fund Details window must exactly match the MKC client number, as
   in the example below.




                                             Page 8 of 14
 3.3    Transaction Upload
2. The transactions can then be loaded. There is one file for each account.
3. Select the standard BGL Import or MasterKey Custom Account option, when uploading the
   MKC client file(s).




                                            Page 9 of 14
4     Other information you need to know
•   Pending transactions will not be included in the download, which may cause the file to be
    unbalanced. When you run the download for the following period, these pending transactions will
    be automatically picked up in the next file (unless they are still pending).
•   Where a transaction occurs over multiple periods, such as the financial year’s end (i.e. the
    purchase is made prior to 30 June and confirmed post-30 June), it will be reported as at the
    purchase date, and therefore appear as a transaction in the period that the purchase was
    initiated.
•   To ensure that all transactions in the download are successfully loaded into BGL Simple Fund, it
    is recommended that you run an audit report. The audit report looks very similar to the existing
    Ledger Reports>Transaction List, but provides a comment in the Account Code column, which
    states ‘Not Loaded’ against any transaction that has not been successfully loaded.
•   If there is a transaction with no unit value (e.g. bank charges), the BGL report following the
    upload will show an error. However, the transaction will be loaded correctly.
    If there is a transaction with no dollar value (e.g. share splits), the BGL report following the upload
    will show two transactions, one of +$0.01 and one of -$0.01. In BGL, the transaction will show a
    value of $0.01, but the fund will still balance to the correct amount.

•   Asset transfer transactions, including transfers-in, will be included in BGL reports. You may
    already have these assets recorded in BGL. If so, you will need to delete these transfers following
    the BGL upload. These transactions will generally be positioned at the top of the report, making
    them easily identifiable.

•   BGL reports do not distinguish between CGT amounts having a necessary connection with
    Australia and those not having a necessary connection with Australia. This may impact on the
    taxation treatment of non-resident investors using the BGL download function.

• BGL does not have CGT concession profiles. In order to accommodate for this, the tax exempt
  profiles in BGL have been used to capture the CGT concession portion of trust distribution income.

• If you move data to another date and attempt to upload the same data again, a separate entry will
  be created in BGL. This is because BGL uses the reference and date to determine whether a
  transaction has already been uploaded. This may result in amounts being duplicated.

• MKC Cash Account units will need to be adjusted to two decimal places, as BGL currently captures
  up to four decimal places.

•   You will need to establish a new security account code within your BGL Simple Fund – Securities
    List for the Cash Holding Account.
                  CA0001 – CASH HOLDING ACCOUNT
•   You will also need to establish the following ‘Cash Holding Account’ in BGL Simple Fund to ensure
    the accurate reporting of the specific platforms cash account.
                  724/099 – CASH HOLDING ACCOUNT




                                             Page 10 of 14
5     More Information
•   For assistance with the importing process, call:

        BGL Support desk
        Tel: 1300 654 401

•   For assistance with generating additional MKC client files, call:

        MasterKey Custom Customer Service Centre
        Tel: 1800 647 009




                                             Page 11 of 14
      6     Appendix A: MKC to BGL Transaction Type Comparison

MKC Transaction Code   MKC Description                        BGL A/c Reference   BGL Transaction Type
          1            Entry Fee - Manager                           302          Management Fee
          2            Transfer Fee Manager                          302          Management Fee
          4            Entry Fee - Deferred                          302          Management Fee
          5            Entry Fee - Recouped                          302          Management Fee
         11            Initial Adviser Fee                           302          Management Fee
         12            Transfer Fee Broker                           302          Management Fee
         13            Insurance Fee Broker                          302          Management Fee
         31            Administration Fee                            302          Management Fee
         41            Trailing Broker Fee                           302          Management Fee
         51            Adviser Service Fee                           302          Management Fee
         61            Expense Recovery Fee                          302          Management Fee
         71            Trustee / Custodian Fee                       475          Other Expense
         81            Member Fee                                    302          Management Fee
        ADJ            Adjustment Journal                            998          Other Expense
        AFE            Agent Fee - Property                          379          Other Expense
         AIP           Investment Process Purchase                                Asset Purchase
        AIS            Investment Process Unit Sale                 491           Asset Disposal
        ALR            Allocation of Reserve                                      Asset Purchase
        AP1            Pending Asset Transfer Type 1                              Asset Purchase
        AP2            Pending Asset Transfer Type 2                              Asset Purchase
        AP3            Pending Asset Transfer Type 3                              Asset Purchase
        APP            Pending AIP Purchase                                       Asset Purchase
        AT1            Standard Asset Transfer                                    Asset Purchase
        AT2            Contribution by way of Asset                               Asset Purchase
        AT3            Contribution Purchase - Asset                              Asset Purchase
        ATF            Asset Transfer Fee                           302           Management Fee
        ATU            Asset Transfer - Unallocated                 302           Management Fee
        AUD            Audit, Tax & Legal Related Fees              307           Other Expense
        BAD            Bank Accounts Debit Tax                      315           Bank Charge
         BC            Bank Charges                                 315           Bank Charge
         BI            Income on Bank Account                                     Asset Income
        BKC            Bank Charges Paid                            315           Bank Charge
        BKR            Brokerage Receipt                                          Asset Income
         BP            Benefit Payment                              492           Other Expense
        BPI            Benefit Payment                              492           Other Expense
        BRC            Stockbroker Commission                       302           Management Fee
        BRK            Brokerage Receipt                            302           Management Fee
        CBC            Bank Cheque Payment Reversal                 998           Other Expense
        CDT            Contribution Details                                       Asset Purchase
        CMP            Account Adjustment                                         Asset Income
        COP            Convert Options/Draw Instal                                Asset Instalment Payment
        COR            Courier Fees (chq)                           418           Other Expense
        COU            Courier Fees                                 418           Other Expense
        CPE            Comm. Property Expense (GST)               375/999         Other Expense
        CPP            Com. Property Expense (No GST)             375/999         Property Expense
         CR            Capital Receipt                              998           Other Expense
        CRD            Loan Advance                                               Asset Purchase
        CRI            Commercial Rental Income                                   Asset Income




                                              Page 12 of 14
MKC Transaction Code   MKC Description                      BGL A/c Reference   BGL Transaction Type
         DC            Dishonour Fee on PDC & Cheques              315          Bank Charge
         DD            Dividend Distribution                                    Asset Income
        DSD            Stamp Duty on Trust Deed                   998           Management Fee
        EFE            Investment Entry/Exit Fee                  302           Management Fee
        FEE            Other Sundry Fees                          350           Other Expense
         FID           Financial Institutions Duty                315           Bank Charge
        FLT            Public Float Refund                                      Asset Purchase
        FMR            Fund Manager Rebate                                      Asset Income
        IBC            Interest & Borrowing Costs                 379           Other Expense
        ICA            INTEREST ON CAPITAL GUARNTEED                            Asset Income
         IDT           Interdivisional Transfer                                 Asset Purchase
         IFD           Investment Fees-$ Cost Average             998           Other Expense
         IFR           Investment Fees - Recurring                998           Other Expense
          IL           Payment Interest on Loanback                             Asset Income
        INP            Fixed Interest Purchase                                  Asset Purchase
        INS            Fixed Interest Sale                        491           Asset Disposal
         INT           Interest Received                                        Asset Income
         IPP           Pending Fixed Interest Purch.                            Asset Purchase
        ISC            ATO Supervisory Levy                       998           Other Expense
         ISP           Pending Fixed Interest Sale                491           Asset Disposal
         ITC           Input Tax Credit                         375/999         Other Expense
         LNI           Loan Interest Paid                         379           Other Expense
        LNP            Loan Asset Purchase                                      Asset Purchase
        LNS            Loan Asset Repayment                                     Asset Purchase
        LPS            Life Policy Sale                           491           Asset Disposal
        MPS            Pending Mortgage Sale                      491           Asset Disposal
        MRC            Misc. Receipt (Cost Base)                                Asset Purchase
        MTC            Misc. Expense (GST/RITC)                   350           Other Expense
        MTP            Mortgage Purchase                                        Asset Purchase
        MTS            Mortgage Sale                              491           Asset Disposal
        PID            Pension Payment to Invest. Acc             998           Other Expense
        PNF            Penalty Fee                                382           Other Expense
          PP           Property Purchase                                        Asset Purchase
        PPE            Property Maint. Expense                  375/999         Other Expense
         PPI           Pre Paid Borrowing Costs                 375/999         Other Expense
        PPP            Pending Property Purchase                                Asset Purchase
        PPS            Pending Property Sale                      491           Asset Disposal
          PS           Property Sale                              491           Asset Disposal
        QTP            Quarterly Tax Payments                   850/004         Other Expense
          RI           Residential Rental Income                                Asset Income
        RIC            Receipt of Income/Capital                  491           Asset Disposal
         RIP           Receipt of Income/Capital                                Asset Income
        ROC            Return of Capital                                        Asset Income
        RPE            Residential Property Expenses            375/999         Other Expense
        RW             Regular Withdrawal                         492           Other Expense
        SCP            Surcharge Yearly Payment                   998           Other Expense
         SD            Stamp Duty                                 998           Other Expense
        SHP            Equity Purchase                                          Asset Purchase
        SHS            Equity Sale                                491           Asset Disposal
        SPP            Pending Share Purchase                                   Asset Purchase
        SPS            Pending Share Sale                         491           Asset Disposal




                                            Page 13 of 14
MKC Transaction Code   MKC Description                        BGL A/c Reference   BGL Transaction Type
        STP            Stamp Duty Fee                                998          Other Expense
        SUN            Misc. Expense (No GST/No RITC)                350          Other Expense
        TFE            Title Office Fee - Property                 375/999        Other Expense
          TI           Income Tax                                                 Asset Purchase
         TIS           Asset Transfer In Specie                                   Asset Purchase
         TP            Tax Provision (Payment)                    850/004         Other Expense
        TPA            Tax Profile Allocation (ACCRUA                             Asset Income
        TPM            Withholding Tax                                            Asset Income
        UPP            Pending Unit Trust Purchase                                Asset Purchase
        UPS            Pending Unit Trust Sale                      491           Asset Disposal
        UTP            Unit Trust Purchase                                        Asset Purchase
        UTS            Unit Trust Sale                              491           Asset Disposal
        VOU            ATO Vouchers                                               Asset Income




                                              Page 14 of 14

				
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