Show 

Transaction Types

Overview

List of Transaction Types

This topic provides information about each transaction type used in transactional accounts in Morningstar Office and the security types to which they apply. You will learn the following:

Before reading about each transaction type, it is important to familiarize yourself with the following terms related to importing in Morningstar Office:

Understanding Morningstar’s Cash Accounting Methodology

This section explains the concepts behind the cash accounting methodology used in Morningstar Office when importing transactions. The following topics are covered:

What is a cash account?

Morningstar Office uses a cash accounting method for transactions, and each custodian has its own cash account with a name unique to that custodian. A cash account is a “passthrough” account required by Morningstar Office to track the cash flow of transactions (with the exception of certain accounts from Charles Schwab and DST Vision).

That is, every time a client purchases a security, a corresponding withdrawal from the cash account takes place as well. Likewise, when a client sells a security, a deposit is made into the cash account. These transactions are referred to as cash offset transactions.

Cash accounts typically maintain a zero balance since they represent funds for (or proceeds from) a transaction that are required to move through these accounts before the funds reach their final destination, either as a security a client owns, or in a client’s money market account. It is extremely important to use the proper cash account when entering manual transactions.

Click here to view the cash account that is used for a specific Custodian.

What is a cash offset transaction?

Cash offsets are transactions that are paired with certain non-cash transactions (i.e., Buy, Sell, etc.) to combine and create a balanced, auditable transaction process. For example, when a client sells a security, a cash offset transaction takes place to deposit cash into the proper cash account.

These cash offset transactions occur automatically at the custodian level, and are brought into Morningstar Office as part of the importing process. If you create a manual transaction in Morningstar Office, cash offsets are automatically generated for you.

What cash flow types are used in Morningstar Office?

The cash flow for a transaction will be either external to an account, or internal to it, depending on the transaction type. These cash flow types indicate whether funds are moving within an account, or coming from outside of it.

The following table further explains these cash flow types:

Cash Flow Type

Description

External cash flow

This results from transactions where the funds or proceeds of a transaction move to (or from) an outside account, such as a  Deliver-in or Deliver-out.

Transactions with external cash flow do not have an offsetting cash transaction.

Internal cash flow

This results from transactions between securities within an account. These transactions always have an offsetting cash transaction.

Users can change any transaction type that generates internal cash flow to external cash flow by manually coding the transaction as Out of Pocket. Note, though, that Out of Pocket transactions rarely occur.

What is the transaction process when a cash account is involved?

For most custodians, cash and money market accounts are used for tracking cash flows. These are used to complete some, but not all, transactions. The following transaction process shows an example of buying a stock with funds not currently in a client’s account:

    1. Deposit cash

    2. Buy into money market account

    3. Withdrawal of cash (a cash offset for step 2)

    4. Sell from money market account

    5. Deposit cash (a cash offset for step 4)

    6. Buy security

    7. Withdraw cash (a cash offset for step 6)

What transaction types are available in Morningstar Office?

Transaction types used in Morningstar Office are listed in the following table. Be sure to read the Description column for each one, as well as the Cash Offset Transaction column. The latter will tell you whether you should expect another transaction type to be paired with the one in the row you’re reading about.

If you need to enter a transaction manually, the steps in the Description column guide you on how to do this for each type.

Transactions are presented in two ways - the list below is alphabetical, while the table groups the transactions according to the type of activity in regard to the investment.

Accrued Interest Bought

Distribution

Management Fee

Short-term Capital Gain

Accrued Interest Sold

Distribution Reinvest

Margin Interest

Short-term Capital Gain Reinvest

Adjust Cost

Exchange-in

Merge-in

Split

Adjust Lot

Exchange-out

Merge-out

Start Value

Buy

Expense

Redeem

Surrender

Cover Short

Expire

Return of Principal

Tax Withheld

Credit of Security

Income

Reversal

Transfer-in

Debit of Security

Income Reinvest

Sell

Transfer-out

Deliver-in

Interest

Sell Short

Withdrawal

Deliver-out

Long-term Capital Gain

Sell to Pay Expense

 

Deposit

 

Long-term Capital Gain Reinvest

 

Sell to Pay Fees

 

 

 

PURCHASES

LIQUIDATIONS

INCOME / DISTRIBUTIONS

FEES / TAXES

MISCELLANEOUS

 

Activity Type

Transaction Type

Description

Use with these Security Types

Cash Offset Transaction

Default Cash Flow Type

Purchases

Buy
Back to Transaction List

Records the purchase of a security. When entering this transaction type manually, it requires a Withdrawal cash offset transaction.

  1. Enter the date of purchase.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. Verify the correct linked cash security is input in the Cash Security Name field.

All security types except Cash and Cash Equivalents

Withdrawal

Internal

Purchases

Deposit
Back to Transaction List

Records a deposit into a cash security.

  1. Enter the date and deposit amount.

  2. Verify the linked cash security is populated in the cash security name field.

When a linked cash security is selected, Deposits and Withdrawals are also automatically generated to accompany other transaction types such as buys and sells of securities.

Cash and Cash Equivalents

Varies

Internal

Could also be an "out-of-pocket" transaction

Purchases

Deliver-in
Back to Transaction List

Records the transfer of assets from another account. This transaction is also used to establish initial positions when importing for the first time.

  1. Enter the following:

  • number of shares received

  • date received

  • position type, and

  • price.

  1. You may also choose to enter the original purchase date and original cost basis of the holding.

All security types

None

External

Purchases

Credit of Security
Back to Transaction List

Records the receipt of shares resulting from a merger, acquisition, spin-off, share class exchange, and/or split of a security already held in an account.

  1. Enter the following information:

  • received date

  • share quantity, and

  • price.

  1. You may also enter original date and original cost basis, but this information is not required.

All security types

None

None

Purchases

Sell Short
Back to Transaction List

Records the short sale of a security.

  1. Enter the trade date and matching method, if applicable.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. Enter any fees or commissions.

  2. Verify the correct linked cash security is input in the cash security name field.

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Fixed Income
  • Limited Partnership
  • Open-End Fund
  • Options
  • Preferred Stock
  • Stock
  • Treasury Inflation Protected
  • Unit Investment Trust
  • 529 Portfolio

Deposit

Internal

Purchases

Transfer-in
Back to Transaction List

Same as Credit of Security. Although Transfer-in can be used as a way to categorize transactions, for simplicity in reporting and accounting practices, it’s a best practice to use Credit of Security instead.

All security types

N/A

N/A

Purchases

Merge-in
Back to Transaction List

This is the same as Credit of Security. Although Merge-in can be used as a way to categorize transactions, for simplicity in reporting and accounting practices, it’s a best practice to use Credit of Security instead.

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Limited Partnership
  • Money Market Fund
  • Open-End Fund
  • Preferred Stock
  • Separate Account/CIT
  • Stock
  • Unit Investment Trust
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)
  • 529 Portfolio 

N/A

N/A

Purchases

Exchange-in
Back to Transaction List

Records the receipt (buy) of shares resulting from an exchange from another security. An Exchange-in occurs, for example, in portfolio re-allocation. An Exchange-in should always be accompanied by an Exchange-out with the same amount. This transaction does not generate external cash flow; it is a direct exchange from one security to another.

Enter the transaction date and one of the following:

  • share quantity and price

  • dollar amount and price, or

  • share quantity and amount.

  • Open-End Fund
  • Unit Investment Trust
  • 529 Portfolio

Exchange-out

None

Purchases

Start Value
Back to Transaction List

This is the same as Deliver-in. Although Start Value can be used as a way to categorize transactions, for simplicity in reporting and accounting practices, it’s a best practice to use Deliver-in instead.

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Fixed Income
  • Hedge Fund
  • Limited Partnership
  • Open-End Fund
  • Preferred Stock
  • Separate Account/CIT
  • Stock
  • Unit Investment Trust
  • 529 Portfolio

N/A

N/A

Liquidations

Sell
Back to Transaction List

Records the sale of a security.

  1. Enter the trade date and matching method, if applicable.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. Enter any fees or commissions.

  2. Verify the correct linked cash security is input in the cash security name field.

All security types except
Cash and Cash Equivalents

Deposit

Internal

Liquidations

Withdrawal
Back to Transaction List

Records a withdrawal of a cash security.

  1. Enter the date and withdrawal amount.

  2. Verify the linked cash security is populated in the cash security name field.

When a linked cash security is selected, deposits and withdrawals are automatically generated to accompany other transaction types such as buys and sells of securities.

  • Cash and Cash Equivalents
 

Varies

Internal or Out-of-Pocket

Liquidations

Deliver-out
Back to Transaction List

Records the transfer of assets out of an account.

Enter the following information:

  • share quantity

  • deliver-out date

  • price, and

  • position type.

All security types

None

External

Liquidations

Debit of Security
Back to Transaction List

Records the removal of shares resulting from a merger, acquisition, spin-off, share class exchange, and/or split of a security already held in an account.

Enter the following information:

  • transaction date

  • share quantity, and

  • price.

All security types

None

None

Liquidations

Redeem
Back to Transaction List

Records the redemption of a fixed income class security at the maturity date.

  1. Enter the trade date and matching method, if applicable.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. Enter any fees or commissions.

  2. Verify the correct linked cash security is input in the cash security name field.

  • CD
  • CMO
  • Fixed Income
  • Treasury Inflation Protected 

Deposit

Internal

Liquidations

Cover Short
Back to Transaction List

Records the purchase of a security to close an open short position.

When entering this transaction type manually, it requires a Withdrawal cash offset transaction.

  1. Enter the trade date and matching method, if applicable.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. If applicable, enter any fees or commissions.

  2. Verify the correct linked cash security is input in the Cash Security Name field.

  • Closed-End fund
  • Exchange-Traded Fund (ETF)
  • Fixed Income
  • Limited Partnership
  • Open-End Fund
  • Options
  • Preferred Stock
  • Stock
  • Treasury Inflation Protected
  • Unit Investment Trust
  • 529 Portfolio

Withdrawal

Internal

Liquidations

Expire
Back to Transaction List

Records the expiration of contracts for an option or other derivative security.

Enter the expiration date.

  • CMO
  • Options
  • Tangible Assets
  • Warrants and Rights

None

None

Liquidations

Surrender
Back to Transaction List

Records the sale of a Variable Annuity or Variable Life subaccount resulting from the surrender or partial surrender of the policy.

  1. Enter the trade date.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. Enter surrender charge, if any.

  2. Verify the correct linked cash security is input in the cash security name field.

  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)

Deposit

Internal

Liquidations

Transfer-out
Back to Transaction List

Same as Debit of Security. Although Transfer-out can be used as a way to categorize transactions, for simplicity in reporting and accounting practices, it’s a best practice to use Debit of Security instead.

All security types

N/A

N/A

Liquidations

Merge-out
Back to Transaction List

This is the same as Debit of Security. Although Merge-out can be used as a way to categorize transactions, for simplicity in reporting and accounting practices, it’s a best practice to use Debit of Security instead.

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Limited Partnership
  • Money Market Fund
  • Open-End Fund
  • Preferred Stock
  • Separate Account/CIT
  • Stock
  • Unit Investment Trust
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)
  • 529 Portfolio

N/A

N/A

Liquidations

Exchange-out
Back to Transaction List

Records the removal (sale) of shares resulting from an exchange from another security. An Exchange-out occurs, for example, in portfolio re-allocation. An Exchange-out should always be accompanied by an Exchange-in with the same amount. This transaction does not generate external cash flow; it is a direct exchange from one security to another.

Enter the transaction date and one of the following:

  • share quantity and price

  • dollar amount and price, or

  • share quantity and amount.

  • Open-End Fund
  • Unit Investment Trust
  • 529 Portfolio

Exchange-in

None

Income / Distributions

Distribution
Back to Transaction List

Records a distribution payment from a stock or fund.

  1. Enter the following information:

  • date

  • ex-date

  • total dollar amount or the amount received per share held.

  1. Verify the correct linked cash security is input in the cash security name field.

  • Category (Category Average)
  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Hedge Fund
  • Index
  • Limited Partnership
  • Money Market Fund
  • Open-End Fund
  • Objective (MF Objective)
  • Other
  • Preferred Stock
  • Proxy
  • Separate Account/CIT
  • Stock
  • Tangible Assets
  • Unit Investment Trust
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)
  • 529 Portfolio

Deposit

Internal

Income / Distributions

Distribution Reinvest
Back to Transaction List

Records the payment and reinvestment of a cash distribution as a single transaction.

  1. Enter the reinvest date and exdate.

  2. Enter either the amount and price, or the amount per share and price. (The number of shares bought is automatically calculated.)

  • Category (Category Average)
  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Hedge Fund
  • Index
  • Limited Partnership
  • Money Market Fund
  • Open-End Fund
  • Objective (MF Objective)
  • Other
  • Preferred Stock
  • Proxy
  • Separate Account/CIT
  • Stock
  • Tangible Assets
  • Unit Investment Trust
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)
  • 529 Portfolio

None

None

Income / Distributions

Income
Back to Transaction List

Records an income payment from a fixed income security.

  1. Enter the pay date and total dollar amount received in the income field.

  2. Verify the correct linked cash security is input in the cash security name field.

  • CD
  • CMO
  • Fixed Income
  • Treasury Inflation Protected
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)

Deposit

Internal

Income / Distributions

Income Reinvest
Back to Transaction List

Records the payment and reinvestment of a cash income payment as a single transaction.

Enter the following information:

  • trade date

  • total dollar amount, and

  • the price per share.

The number of shares bought will be automatically calculated.

  • CD
  • Fixed Income
  • Treasury Inflation Protected
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)

None

None

Income / Distributions

Interest
Back to Transaction List

Records an interest payment from a cash security.

  1. Enter the amount.

  2. Verify the correct linked cash security is input in the Cash Security Name field. (If the interest is reinvested, the linked cash security will be the cash security paying interest.)

  • Cash and Cash Equivalents

Deposit or None

Internal or None

Income / Distributions

Accrued Interest Bought
Back to Transaction List

Records the purchase of accrued interest accompanying the purchase of a fixed income security.

Note that when entering this transaction type manually, you must pair it with a Withdrawal transaction. Be sure to use the correct Cash source for this.

  1. Enter the purchase date and interest amount.

  2. In the Cash Security Name field, verify the linked cash security is correctly input.

  • CD
  • CMO
  • Fixed Income
  • Treasury Inflation Protected

Withdrawal

Internal

Income / Distributions

Accrued Interest Sold
Back to Transaction List

Records the sale of accrued interest accompanying the sale of a fixed income security.

Note that when entering this transaction type manually, you must pair it with a Deposit transaction. Be sure to use the correct Cash source for this.

  1. Enter the sale date and interest amount.

  2. Verify the correct linked cash security is input in the Cash Security Name field.

  • CD
  • CMO
  • Fixed Income
  • Treasury Inflation Protected

Deposit

Internal

Income / Distributions

Margin Interest
Back to Transaction List

Records a cash withdrawal from an account to pay interest due on a margin balance.

Enter the date and margin interest amount.

  • Cash and Cash Equivalents

None

External

Income / Distributions

Long-term Capital Gain
Back to Transaction List

Records the receipt of a long-term capital gain payment from a security. Similar to Distribution.

Enter the following information:

  • pay date and

  • amount or

  • amount per share

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Money Market Fund
  • Open-End Fund
  • Separate Account/CIT
  • Unit Investment Trust
  • 529 Portfolio

Deposit

Internal

Income / Distributions

Long-term Capital Gain Reinvest
Back to Transaction List

Records the payment and reinvestment of a long-term capital gain payment as a single transaction. Similar to Distribution Reinvest.

Enter the following information:

  • pay date and

  • amount or

  • amount per share

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Money Market Fund
  • Open-End Fund
  • Separate Account/CIT
  • Unit Investment Trust
  • 529 Portfolio

None

None

Income / Distributions

Short-term Capital Gain
Back to Transaction List

Records the receipt of a short-term capital gain payment from a security. Similar to Distribution.

Enter the following information:

  • pay date and

  • amount or

  • amount per share

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Money Market Fund
  • Open-End Fund
  • Separate Account/CIT
  • Unit Investment Trust
  • 529 Portfolio 

Deposit

Internal

Income / Distributions

Short-term Capital Gain Reinvest
Back to Transaction List

Records the payment and reinvestment of a short-term capital gain payment as a single transaction. Similar to Distribution Reinvest.

Enter the following information:

  • pay date and

  • amount or

  • amount per share

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Money Market Fund
  • Open-End Fund
  • Separate Account/CIT
  • Unit Investment Trust
  • 529 Portfolio

None

None

Fees / Taxes

Management Fee
Back to Transaction List

Records a withdrawal from the client’s account to pay a management fee to the advisor. Note that payments not related to management fees should be classified with the Expense transaction type. To understand how to handle sales related to paying management fees, see the Sell to Pay Fees transaction type.

Enter the transaction date and management fee amount.

  • Cash and Cash Equivalents
  • Money Market

None

External

Fees / Taxes

Expense
Back to Transaction List

Records a withdrawal of cash from the client's account to pay an expense other than a management fee. This transaction applies either to a cash security, in which the transaction is similar to a Withdrawal, or to a money market fund, in which it is similar to a Sell.

  • Cash and Cash Equivalents
  • Money Market

Withdrawal

External

Fees / Taxes

Sell to Pay Expense
Back to Transaction List

Records the sale of a security to pay an expense other than a management fee.

  1. Enter the trade date and matching method, if applicable.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. Enter any fees or commissions.

  2. Verify the correct linked cash security is input in the cash security name field.

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Hedge Fund
  • Limited Partnership
  • Money Market Fund
  • Open-End Fund
  • Preferred Stock
  • Separate Account/CIT
  • Stock
  • Unit Investment Trust
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)
  • 529 Portfolio

None

External

Fees / Taxes

Sell to Pay Fees
Back to Transaction List

Records the sale of a security to pay a management fee to the advisor.

  1. Enter the trade date and matching method, if applicable.

  2. Enter one of the following:

  • share quantity and price

  • total dollar amount and price, or

  • share quantity and total dollar amount.

  1. Enter any fees or commissions.

  2. Verify the correct linked cash security is input in the cash security name field.

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Hedge Fund
  • Limited Partnership
  • Money Market Fund
  • Open-End Fund
  • Preferred Stock
  • Separate Account/CIT
  • Stock
  • Unit Investment Trust
  • Variable Annuity Subaccount (VA)
  • Variable Life Subaccount (VL)
  • 529 Portfolio

None

External

Fees / Taxes

Tax Withheld
Back to Transaction List

Records a withdrawal from the client’s account to deposit into an escrow account.

Enter the date and tax withhold amount.

  • Cash and Cash Equivalents
  • Money Market

None

External

Miscellaneous

Reversal
Back to Transaction List

Cancels a previously entered transaction.

  1. Specify the lot and transaction type to which the reversal applies.

  2. Enter the following information:

  • reversal date

  • share quantity and/or

  • amount.

All security types

Deposit, Withdrawal, or neither, depending on original transaction.

For example, if you are reversing a Buy  transaction, then the offsetting cash transaction the Reversal should be paired with is Deposit.

External, Internal or neither, depending on original transaction

Miscellaneous

Split
Back to Transaction List

Records a stock split.

Enter the following information:

  • date

  • conversion price and

  • pre/post split ratio.

  • In the case that fractional shares result, indicate whether fractional shares are maintained or converted into a dividend or capital gain payment.

  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Limited Partnership
  • Open-End Fund
  • Preferred Stock
  • Separate Account/CIT
  • Stock
  • Unit Investment Trust
  • 529 Portfolio

None, unless fractional shares are paid out. In the latter case, a Split transaction should be paired with a Deposit transaction.

None, unless fractional shares are paid out, in which case cash flow is internal.

Miscellaneous

Return of Principal
Back to Transaction List

Records a full or partial return of principal received.

  1. Enter the date and amount received in the ROP field.

  2. Verify the correct linked cash security is input in the cash security name field.

  • Category (Category Average)
  • CD
  • CMO
  • Closed-End Fund
  • Exchange-Traded Fund (ETF)
  • Fixed Income
  • Hedge Fund
  • Index
  • Limited Partnership
  • Open-End Fund
  • Objective (MF Objective)
  • Other
  • Proxy
  • Preferred Stock
  • Stock
  • Treasury Inflation Protected
  • Unit Investment Trust
  • Warrants and Rights
  • 529 Portfolio 

Deposit

Internal

Miscellaneous

Adjust Cost
Back to Transaction List

Adjusts the original cost basis of an existing tax lot. When entering this transaction type manually, note that it requires no cash offset transaction.

  1. Specify the lot.

  2. Enter the original trade date and original amount.

All security types except Cash and Cash Equivalents

None

None

Miscellaneous

Adjust Lot
Back to Transaction List

Adjusts the date and amount of the original purchase and/or the deliver-in of a security.

When entering this transaction type manually, the type of offsetting cash transaction you need to enter depends on the type of transaction that was originally entered. For example, if you are adjusting a Deposit, you would need to enter a Withdrawal from Cash as well.

  1. Specify the lot.

  2. Edit any details needing to be changed, including the following:

  • original date

  • original per share cost basis

  • received date, and

  • received date price.

All security types

Deposit, Withdrawal, or neither, depending on original transaction.

For example, if you are reversing a Buy  transaction, then the offsetting cash transaction the Reversal should be paired with is Deposit.

External, Internal or neither, depending on original transaction