1.7.3 Define the Events and the Basis Amount

A security goes through different stages in its life cycle, such as:

• Booking
• Interest Accrual
• Liquidation, etc.

Each stage is referred to as an Event, in Oracle Banking Treasury Management. When defining an Issuer Tax class, you should specify the following:

• The Association Event
• Basis Amount

The event at which you would like to associate a tax component to a security is referred to as the Association Event.

The basis on which interest, charge or tax is calculated or levied is referred to as the Basis Amount. (An Issuer Tax can be on the basis of the coupon paid, or on a cash dividend.) The different basis amounts available in the Securities module are associated with a unique ‘tag’. When building a tax component, you have to specify the tag associated with the Basis Amount. When tax is calculated for a security, the basis amount corresponding to the tag will be picked up automatically.