Practitioner Edition

11.4 Year End Processing: Distribute Net P & L

This step distributes the income and expenses from unsegregated assets of the fund to members based on the Members’ Weighted Average (MWA) balances.

To enable you to correctly calculate tax liabilities for various members and correct profit distribution among members, Mclowd will calculate Member Weighted Averages and compose a Member Weighted Average (MWA) Report.

NOTE: You can manually override the % allocations calculated by Mclowd, if necessary, in both the Net Profit and Loss Allocation to Member Accounts and the Allocate Income Tax screens. Simply type your values in the Override field before pressing the ALLOCATE button.

The MWA report is available for download and review by clicking the MWA REPORT button at top right of this screen. The report shows how historical data was used to calculate the MWA.

Net P&L Allocation MWA

NOTE: The calculated MWA percentage can be overridden if an alternative method of distribution is to be used. Simply type a new percentage into the Override column. The Total of percentages for all members must equal 100%. If you make an error when Overriding, click the RESET button to reset to Mclowd’s calculated values.

Your MWA report will list (and factor into the calculation) all segregated transactions, including member contributions, roll-ins, segregated income, and segregated expenses (e.g. insurance).

By considering segregated transactions, and the number of days in the financial year for which the respective income or expense increased or reduced the Fund’s asset balance, Mclowd calculates the percentage of the Fund that rightly attributes to each member. This calculation is useful for assessing tax obligations where some members are in Pension phase (and their income is tax exempt) and some members are in Accumulation phase (and income in taxed). These percentages are also used to calculate the percentage of annual profit/loss to attribute to each respective member.

The information in the MWA Report will assist an actuary to provide the Actuarial Report needed to claim income tax exemption for members in Pension Phase. If your Actuary makes adjustments to the percentages calculated by Mclowd, you can manually override the percentages shown when Mclowd allocates Tax and Profit, by typing new values into the Override fields.

Return to the Net Profit and Loss Allocation screen after checking the MWA report and accept or override the percentage values shown for each member account. Once the MWA % is accepted or overridden, click ALLOCATE P&L.

The user will then see the following message and should click OK to proceed.

Accept Member Profit Allocations

When you click OK, Mclowd will take you back to the Net Profit and Loss Allocation to Member  Accounts screen and should display the following screen.

P&L Allocated Success

Mclowd offers options to EXPORT TO EXCEL, PRINT or DOWNLOAD AS PDF.

Click the NEXT – ALLOCATE CONTRIBUTIONS TAX button in the lower right corner of the screen to move to the next step.

about the author:

Lorraine Cobcroft

With a background in accounting and financial management, followed by two decades writing software documentation, Lorraine joined the Mclowd team in mid-2016 and is enjoying working with a dynamic team to enhance an innovative product that has the potential to revolutionize the way Australians manage their retirement funding. Lorraine is also an accomplished business writer, ghost-writer, novelist and short-story writer and poet.

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