Challenges With Developing Portfolio Accounting Software for After-Tax Reporting

The ability to produce after-tax performance returns for mutual funds, separate accounts and composites is a timely subject.  Earlier this year the U.S. Securities & Exchange Commission (SEC) issued standards mandating after-tax return reporting for most mutual funds beginning February 2002.  After providing comment to the SEC initiative, the Association for Investment Management & Research (AIMR) issued for public comment proposed revised standards for separate accounts and composites. To allow software firms to focus on key issues, The Journal of Performance Measurement has requested the assistance of two industry leaders to address the challenges that firms may confront in the development or modification of software to produce after-tax returns.

We asked Doug Rogers, Chair of the AIMR Subcommittee on After-Tax Reportin, for an overview of the proposal to serve as an introduction to the subject.  And we asked Lee Price, former Chair of the AIMR Subcommittee, who is recognized for his vast knowledge of performance measurement standards, to address key issues with developing a software solution that could serve as a supplement to a firm’s “stand alone” system.  Within the past year, Lee has established Price Performance Measurement Systems to provide firms that have a pressing need with a viable option to complete after-tax returns.

Authors: Douglas Rogers and Lee Price, Ph.D.