Investment Accounting

Part of the Yardi Investment Suite, the Investment Accounting module empowers you to manage complex ownership structures. It acts as a centralized location for your financial data and gives you the ability to generate customizable reports for different audiences in one system. It also supports different currencies, especially valuable for users with international investments. This module simplifies complex accounting and reporting requirements for joint ventures, equity participation, wholly owned assets, and other investment ownership structures. Other benefits of Yardi Investment Accounting include:

• Ability to set Management Fee percentages and other similar allocation rules
• GAAP and tax reporting ability built into the system
• Automatic equity rollup functionality, customizable with Account Trees; option to select Full Consolidation, Equity Pickup, or Non-Controlling Interest on the back end based on your needs
• Standard GL accounting and Investor-specific accounting performed simultaneously

The Yardi Investment Accounting module adds several different entity types that make it possible to manage complex hierarchies, including Investor, Fund, General Partner, Venture/Fund, among others. These entities function like a property without tenant data; you have the ability to post payables, run reports, and link journal entries to an entity. Unlike other modules, there are rules baked into the system for the relationships between entities, e.g. an entity on a higher level (like a fund) can have equity on an entity on a lower level (like an asset), but not vice versa.

• Entity relationship setup is crucial to successful use of Yardi Investment Accounting. A thorough understanding of the relationships between all involved entities is needed to setup this module. It is recommended that the relationship between entities is specifically mapped out prior to conversion to Yardi.
•  Income allocations give you the ability to prorate amounts like net operating income to different entities. This is done through Account Trees setup.
•  Alternative Payees options allow setup for multiple payees for a fund.

From the IM Analytics menuset, you can access several reports that will assist you in assessing performance of your investments.

• Time-Adjusted IRR is just one example one of these (several reports also include drill-down functionality, giving you more detailed information on a calculation). This report shows you the Internal Rate of Return for the selected investment and prior 1, 3, 5, and 10-year IRRs.
• Further customization is available via IM Templates, which allow you to customize a report by defining types of included transactions

• Not just for daily operations, Yardi Investment Accounting can be used to both track and report on properties from an “asset” perspective
• Adds transaction types including allocations, consolidations, contributions, and distributions
• Calculates Limited Partner and General Partner allocations and Management Fees– if using just Core, you would have to do this manually
• LIHTC properties are financed by the sale of tax credits – private investors purchase the credits and contribute equity (structured as construction financing) to the project. The credits are a dollar for dollar reduction of the investor’s tax burden for the period of the LIHTCs. LIHTC projects are structured as a partnership (with a general partner and a limited partner) in order for the credits to get passed along to the investor. The investor is the limited partner. This structure is just one example of complex partnership structures that involve different rules for allocating revenue and tax burden that is more easily managed in Investment Accounting.