Tax-lot accounting methods

What are the supported tax lot accounting methods in LUSID?

LUSID supports all the industry standard accounting methods. These can be configured in various places in LUSID:

See How do I handle different tax lot accounting conventions? for more details on setting this up in LUSID.

Accounting Method types

  • Default: When set on a portfolio, this instructs LUSID to use the system default accounting method (currently AverageCost). When set on a derived portfolio it means take the AccountingMethod from the parent portfolio, and when set on a transaction it means take the AccountingMethod from the containing portfolio.
  • AverageCost: Do not split the holdings into taxlots, instead aggregate at the holding level and calculate an average cost

For the remaining accounting methods, LUSID will create new tax lots for all transactions which increase a position, ie buys and short sells. The AccountingMethod determines which tax lots will be updated by transactions which reduce the overall position:

  • FirstInFirstOut: the oldest taxlots
  • LastInFirstOut: the newest taxlots
  • HighestCostFirst: the taxlots with the highest cost
  • LowestCostFirst: the taxlots with the lowest cost