You can designate a valuation point (marking the end of an accounting period) as ‘end of year’ and transfer balances in particular accounts to other accounts for the start of the next period.
This feature is designed to set P&L accounts to zero at year end so LUSID can calculate accurate year-to-date P&L figures for the subsequent year.
To do this, you must first:
Add a cleardown module to your chart of accounts (CoA) with at least one cleardown rule specifying the account(s) to transfer from and to.
Apply the code of the cleardown module to each NAV type in your fund.
Create a valuation point with cleardown enabled (see below)
Creating a valuation point with cleardown enabled
To do this in the LUSID web app, navigate to Fund Accounting > Calendar Management, select a fund, click Create valuation point and enable Apply cleardown:
Alternatively, call the UpsertDiaryEntryTypeValuationPoint API and set applyClearDown to true, for example:
curl -X POST 'https://<your-domain>.lusid.com/api/api/funds/MyFunds/Growth/valuationpoints?navTypeCode=OFFICIAL'
-H 'Content-Type: application/json-patch+json'
-H 'Authorization: Bearer <your-API-access-token>'
-d '{
"diaryEntryCode": "31Jan2025",
"name": "End January 2025",
"effectiveAt": "2024-01-31T17:00:00.0000000+00:00",
"queryAsAt": "2024-01-31T19:59:59.0000000+00:00",
"applyClearDown": true
}'Example: Closing the December period with cleardown
Imagine we have a GBP-denominated transaction portfolio holding UK equities, and a chart of accounts with the following general ledger accounts:
We can call the GetCleardownModule API to see that the CoA has a single cleardown module with a single cleardown rule transfering balances in revenue, expense and income-type accounts to the 5-YearEnd account:
{
"cleardownModuleCode": "Cleardown",
"chartOfAccountsId": {
"scope": "Fund",
"code": "Standard"
},
"displayName": "CleardownModule",
"rules": [
{
"ruleId": "Rule001",
"generalLedgerAccountCode": "5-YearEnd",
"ruleFilter": "Account.Type in 'Revenue','Expense','Income'"
}
],
...
}15 December 2023
Our first trade is a purchase of 100 BP shares @ £10 per share = £1,000, trading and settling on 15 December for simplicity. We can call the GetTrialBalance API from portfolio inception to 15 December to provide an accounting view of activity to date:
31 December 2023
There are no more transactions in December. When we call the GetTrialBalance API from portfolio inception to the end of December we see an unrealised gain of £100 has been posted to the 4-PnL account, reflecting a movement in the BP share price in our favor from £10 to £11 (highlighted in red below):
2 January 2024
At EOD on 2 January we call the GetValuationPointData API to strike an estimate NAV and then the AcceptEstimateValuationPoint API to formally close the December 2023 period. More on publishing an official fund valuation.
A valuation point must have a status of Final in order for LUSID to apply cleardown to the subsequent period.
3 January 2024
At SOD on 3 January we call the GetTrialBalance API from 1 January to 3 January, using the unique code of the closed December 2023 period as the start date.
We can see that:
The £100 balance in the
4-PnLaccount from 31 December has been transferred to the5-YearEndaccount (highlighted in green below).The
4-PnLaccount has an opening balance on 1 January of zero, and a closing balance on 3 January of £50, reflecting a further movement in the BP share price in our favor from £11 to £11.50 (highlighted in red).
In other words, with cleardown applied the year-to-date P&L for 2024 is £50, not £150:
Note: LUSID does not currently generate journal entry lines for this transfer. This may change in future.
We can confirm that year-to-date P&L without cleardown applied would erroneously be £150 by calling the GetTrialBalance API for the same period with the excludeCleardownModule option set to True in the API request. The 5-YearEnd account, meanwhile, is empty and therefore unreported:
