The Create Entries Process in Simple Fund 360


The create entries process is split into the following functions:

    • Automatic System Journals
    • Automatic Daily Journals
    • Year End Create Entries

 

Automatic System Journals

 

Simple Fund 360 will automatically allocate any member transactions automatically to member's accounts upon saving the transaction without the need to run the Create Entries Process. These transactions will be directly allocated to the selected member account(s) and include:

 

  • Contributions (Note: Contributions tax where applicable will be automatically calculated and allocated at the same time)
  • Pension payments
  • Lump Sum Payments
  • Lump Sums Rolled In
  • Internal Transfers
  • Pension Commencements
  • Pension Commutations
  • Insurance Proceeds
  • insurance Premiums


Automatic Daily Journals

Automatic Daily Journals are calculated by Simple Fund 360 on a daily basis and will complete the following (automatically): 

  • Investment Revaluation journals - With the integration of BGL's ASX and UUT Automated Data Feed into Simple Fund 360, automatic investment revaluations are conducted on a daily basis. This will allow Simple Fund 360 to calculate the daily changes in market values of investments, which provides you access to real-time investment information.  
  • Member Allocation journals - Income and expense transactions are allocated to members on a daily basis. This will allow Simple Fund 360 to calculate the daily profit/loss that is attributable to each member of the fund and provides you with real-time member balances.


Year End Create Entries

 This needs to be activated by the Simple Fund 360 user at year end and will:

  1. Finalise profit allocation to members and determine year-end balances at 30 June;
  2. Finalise investment revaluations at 30 June;
  3. Calculate PDIT/FITB (If the fund is applying Tax Effect Accounting);
  4. Offset any foreign, TFN and franking credits against Income Tax Payable;
  5. Determine the net capital gain;
  6. Calculate Income Tax Payable;
  7. Calculate the fund's Exempt Current Pension Income and non-deductible expenses;
  8. Calculate and populate the figures in the SMSF Annual Return and the ATO Schedules.


For more information on the tax calculations performed, refer to the Simple Fund vs. Simple Fund 360 help.

How does SF360 allocate profit/earnings to members? 


How does SF360 determine how much of the fund's earning's should be allocated to each member's account? 

  • From Simple Fund 360 release 1.19 onwards, the Create Entries Process will use the "daily weighted average balance" method when completing profit and tax calculations for members. 
  • The general profit/earnings allocation will include any non-member transactions such as investment market movement, dividends, distributions, interest and fund expenses such as accounting fees, audit fees, rental property expenses, depreciation and bank charges. 
  • The daily weighted average balance method weights ensure that each account receives an appropriate percentage of the profit (or loss) of the fund at year end.This method adds the total amount allocated to the member accounts for the year by placing a weighting on each dollar based on the transaction date (how many days the transaction was relevant to the financial year/period). The remaining profit (or loss) and income tax applicable to the fund is then allocated to member accounts based on the total of the weighted member account balances at year end. 
  • Income Tax and PDIT will only be allocated to Accumulation Members only. Where the fund has only pension members any income tax will be allocated to all pension members. Imputed Credits will always be allocated as part of the profit allocation
  • To view the weightings determined by Simple Fund 360, you can prepare the Create Entries Report (see the Create Entries Report section of this help page). 
  • The member allocation worksheet allows users the ability to change the percentage or amount of profit/(loss) and income tax expense that is allocated to fund members. View Member Allocation Worksheet for further information

How does the Create Entries process allocate profit/earnings to Taxable and Tax-Free components?

  • Accumulation members will have their earnings posted to the Taxable Component.
  • Pension members will have their earnings proportioned between the Taxable and the Tax-Free components based on the Tax-Free proportion entered in the Member Mode screen.

 

How does the Create Entries process allocate profit/earnings to Preservation components?

The create entries process will allocate profit and tax to the various preservation components as follows:

  • Members share of profit/loss will be allocated to Preserved component when:

    • Member is in accumulation mode and is under 65. The system assumes they have not met any conditions of release.
    • Member is in pension mode, however, has a transition to retirement income stream. This is because "attaining preservation age" is not a condition of release with a "nil" cashing restriction (Refer to Superannuation Industry (Supervision) Regulations [SISR] subdivision 6.12 and SISR Schedule 1. Benefits transferred to a transition to retirement pension will retain the preservation status they had before they were transferred, i.e. unrestricted non-preserved, restricted non-preserved and preserved. (Refer to this ATO link and the SISR - Reg 6.22A for further information). A trustee may, however, change the preservation status of restricted and unrestricted non-preserved benefits to the preserved benefit. Once the member meets a condition of release with a "nil" cashing restriction e.g. turning 65, benefits may be transferred to Unrestricted Non-Preserved.


    Members share of profit/loss will be allocated to Unrestricted Non-Preserved component when:

    • Member is purely in pension mode (Pension is not Transition to retirement). Regardless of their age, the system assumes they have met a condition of release, therefore, all profit is allocated to Unrestricted Non-Preserved (UNP).
    • Member is in Accumulation mode and aged 65 or over. 

What are "segments" and how does the Create Entries use them?

  • Where member accounts commence (e.g. New Accumulation or Pension member) or a Member account ceases (e.g. pension ends or member leaves fund) the break down the Year allocation into Create Entries process is separated into segments based on these key start and end dates.
  • This ensures a fairer allocation of earnings to members for these periods as the Profit allocation willl only be based on the weighted balance for that segment. 
  • When an Actuarial Certificate is received only the last segment will need to be repeated with the Actaurial Percentage. The Create Entries process will automatcially apply the proportions for the entire year and adjust the final segment. 

Navigation


From the Main Toolbar, go to Compliance.

Select Period compliance from the list.

Workflow


The workflow timeline will provide an overview of: 

  • CE (Last Create Entries end date)
  • CP (Last Close Period end date)
  • LT (Last Transaction loaded date)

 

IconExplanation
Last Transaction Date

Select the LT icon to view the last transaction date loaded for the fund. Note: This date includes unallocated (suspense) transactions.

Create Entries Date

Select the CE icon to view the last Create Entries period for the fund. Reverse Entries and Close Period options can be selected from this section.

Close Period

Select the CP icon to view the fund's last closed period.

How to complete the year end Create Entries


Follow these steps to complete the year end Create Entries:

 

  1. Under the Create Entries Period heading, input the full financial year of the fund. 

  2. Next, select Create Entries.



  3. The Create Entries will appear in the Create Entries table below (select the image to enlarge it). 

Member Allocation Worksheet


The member allocation worksheet allows users to the ability to change the percentage or amount of profit/(loss) and income tax expense that is allocated to fund members. See Member Allocation Worksheet for more information. 

How to reverse or delete create entries


To remove the Create Entries, select Reverse Entries.

If you have closed the period, the Reverse Entries option will not display. You will need to re-open the period first before being able to reverse entries. See Re-Open Financial Year help.

How to Input Prior Year Losses


  1. From the Create Entries screen, select View Losses.



  2. You can then input any carried forward capital or tax losses.



  3. Select Save after inputting the figures.

Create Entries Report


View the Create Entries Report to obtain a breakdown of the weighting calculations for each member, the profit allocations and tax allocations (to accumulation members). 

Under the Report column of the year end create entries, select the PDF icon

 

The member allocations can be found under the Segment Calculation section: 

 

Note: The Member Allocation Worksheet can be used to override the daily weighted average balance calculation.