FO-06 — Fee Accrual

The computed fee figure of record for a fund or share/unit class over a period — the amount that management, performance or expense fees accrued to, as calculated by the fee-and-expense processing function, with full provenance back to the in-force fee definition that produced it. The difference between the gross accrual and the net charge after expense-cap, fee-waiver and reimbursement application makes the disclosed ongoing charges figure (OCF) reconstructable from stored artefacts. The OCF (the UCITS KIID / PRIIPs KID cost-disclosure figure: management fee plus OCF-eligible operating expenses, performance fees and transaction costs excluded) and the TER (total expense ratio, an older and broader disclosure measure with a different scope) are distinct; FO-06 supports reconstruction of both but they are not synonymous.

Specialises: E-07 Valuation. Fee Accrual is a computed, provenance-bearing, append-only figure — the fee analogue of a Valuation. It is a stored result (not a recalculation) of applying an in-force fee definition to a period and a subject, for the same governance reason E-07 is stored: the accrued fee is booked into NAV (SD-12.9), disclosed to investors (SD-16.2 / SD-15.14), and must be answerable from a record with full provenance rather than derived from a live recomputation that may no longer reproduce the original. The computed-figure-of-record family — E-07 Valuation, E-19 Risk Measurement, E-20 Performance Result, E-31 Goal Progress Measurement — establishes the pattern; FO-06 is that pattern applied to the fee computation surface.

Why E-07 Valuation, not E-20 Performance Result. A fee accrual is a value computation over a period applied to a subject (a fund or class), not a return figure. E-07 is the universal point-in-time computed value — valued at a method, with provenance — and the fee amount is precisely that: a method-stamped computed value, effective-dated, append-only, stored with the reference to the definition that produced it. E-20 is the return-computation analogue; forcing a fee into the return family would obscure the economic nature of the figure. E-07 specialises more cleanly: the fee is what the fund costs per period, not how the fund performed per period.

Ownership boundary (resolves the share-class fee-boundary: the schedule lives on the fund-terms / share-class master, the computed amount here).

• Fee definition / schedule → stays on PM-10 Fund Terms (closed-end LPA shape) and FO-02 Share / Unit Class class_fee_schedule (open-ended shape). FO-06 reads these; it does not duplicate the formula.
• Fee computed amount → FO-06, owned by SD-12.11 Expense, Fee & Carry Processing (the calculator and verifier: “SD-12.11 produces and checks the amount”).
• NAV booking of the accrual → SD-12.9 Fund Accounting & NAV consumes FO-06 and books the accrued fee into the struck NAV (SD-12.11’s own text: “SD-12.9 accrues … SD-12.11 calculates … SD-12.9 books it”). No formula is duplicated; no figure is double-owned.

Purpose

A fund manager that operates collective investment vehicles accrues fees against the fund continuously — daily, weekly or at the dealing cycle — and crystallises them periodically into actual charges. The accrued management fee reduces the fund’s NAV as it builds; the performance fee crystallises on the relevant crystallisation event (anniversary, quarter-end, dealing point or high-water mark crossing). A retail fund’s ongoing charges figure (OCF) — the UCITS KIID / PRIIPs KID cost disclosure — is the sum of management fees and OCF-eligible operating expenses (administration, audit, depositary, legal, registration, regulatory) expressed as a percentage of average NAV over the period; performance fees and transaction costs are excluded from the OCF and disclosed separately or at a different reporting grain. The investor and regulator need to know that the disclosed charge is reconstructable from stored records.

FO-06 is that stored record. It captures, for each fund or class and each period, the gross fee amount, the formula-version provenance, and the expense-cap / fee-waiver / reimbursement chain that nets the gross amount down to the charge that flows into NAV and into the regulatory disclosure. With FO-06 in place, the OCF reconstruction chain is: sum net_charge for fee_type = management plus net_charge for fee_type = expense (OCF-eligible operating/service expenses — administration, audit, depositary, legal, registration, regulatory — excluding transaction costs) over the period → divide by average class-grain NAV over the period → the published OCF. Performance fees (fee_type = performance) are excluded from the OCF and disclosed separately. Transaction costs are trade-level costs, excluded from the OCF by the ESMA ongoing-charges methodology. Every step traces to a stored FO-06 row and class-grain E-07 record, not a recalculation. TER (total expense ratio) is an older, broader measure with a different scope; the reconstruction stated here produces the OCF as defined under the UCITS KIID / PRIIPs KID lineage.

FO-06 is distinct from:

• FO-02 class_fee_schedule — the static fee terms record (the rate, the formula type, the performance-fee terms). FO-06 is the computed result of applying those terms to a period. PM-10 Fund Terms is the analogous static terms record for the closed-end LPA shape; FO-06 reads both, duplicates neither.
• E-06 Cash Flow Event (cash_flow_type = fee / expense) — the cash event when the fee is paid. FO-06 is the accrual record; E-06 is the settlement event. The two coexist: the accrual builds in FO-06 rows; the payment crystallises into an E-06 row and zeroes the accrual.
• SD-12.9 Fund Accounting & NAV — SD-12.9 books the accrued fee into the NAV; FO-06 is the amount it books. SD-12.9 consumes FO-06.

Attribute schema

Identity and relationship

Period and grain

Computed amounts

Expense-cap / fee-waiver / reimbursement chain (OCF reconstruction support)

OCF reconstruction chain (explicit). Given FO-06 rows for a fund/class and a year:

1. Sum net_charge for fee_type = management plus net_charge for fee_type = expense (OCF-eligible operating/service expenses; transaction costs excluded) over the period. Do NOT include fee_type = performance in this sum — performance fees are excluded from the OCF by the ESMA ongoing-charges methodology and are disclosed separately.
2. Divide by average NAV over the period (the average of class-grain E-07 value_usd records for the class, denominated in class currency).
3. The result is the OCF (ongoing charges figure) for the period, as defined under the UCITS KIID / PRIIPs KID regulatory lineage. TER (total expense ratio) is an older, broader disclosure measure with a different scope; they are not the same figure and should not be used interchangeably. Each step traces to stored FO-06 rows and class-grain E-07 records — no recomputation from live rates is needed. The NAV-per-unit KIID/KID design note (SD-12.9) applies here symmetrically — the disclosed OCF is the rendering of these FO-06 figures of record, not an independently maintained number.

Formula provenance (computation-as-data)

Performance-fee mechanics

Effective-dating and append-only discipline

Notes

• Append-only. FO-06 follows the computed-figure-of-record discipline: once created, a row is never overwritten. A correction inserts a new row with effective_from set to the correction date; effective_to on the prior row is set to the same date. The set of FO-06 rows for a (fund, class, period, fee_type) is the accrual history.
• Class-grain is the primary grain. The fee accrual attaches at share/unit-class grain wherever the fee schedule is per-class (which is the standard for registered open-ended funds). Fund-level expenses that have not yet been allocated to classes are carried with share_class_id = null and are a transitional state pending allocation.
• Two-component OCF reconstruction (management + OCF-eligible expense). The OCF is not a stored scalar; it is reconstructed from the sum of net_charge for fee_type = management plus net_charge for fee_type = expense (excluding performance fees and transaction costs), divided by average NAV. This reconstruction is deterministic from stored records and carries the audit trail that disclosure standards require. Performance fees are stored in FO-06 as fee_type = performance and are disclosed separately, not included in the OCF. TER (total expense ratio) is a related but distinct, broader disclosure measure; FO-06 supports reconstruction of both if needed, but they are not the same figure.
• FK targets resolve without cross-pack complications. fund_product_id → FO-01 and share_class_id → FO-02 are within the fund-operations pack; asset_class → E-09 is a core-entity FK. The formula_spec_ref is a provenance pointer, not a formal FK, because it references either a PM-10 or a FO-02 schedule-version token depending on the fund structure — noted as a generator-rendered pack-level reference, not requiring a hand-edited core ERD edge.

Out of scope

• The fee terms (the rate, the formula, the performance-fee construct) — those are PM-10 Fund Terms (closed-end LPA) and FO-02 class_fee_schedule (open-ended). FO-06 is the computed result of applying those terms, not the terms themselves.
• The cash payment of the fee — that is an E-06 Cash Flow Event (cash_flow_type = fee). FO-06 is the accrual; the cash movement when the fee is settled is E-06.
• The booking of the fee into the NAV — that is SD-12.9’s operation, consuming FO-06. FO-06 is the amount; SD-12.9 is the booking.
• The closed-end fund’s carried-interest and waterfall calculation at fund level (the GP / LP carry distribution) — that is the SD-12.11 carry-and-waterfall service operation consuming PM-10. FO-06 covers the fund-level fee accrual that flows into a registered or closed-end fund’s expense ratio; the detailed LP-level carry distribution is a PM-10-consuming operation, not a per-class accrual.
• The tax consequence of a fee accrual — that is SD-17.4 Investment & Portfolio Tax, which consumes the fee amounts but is not the accrual record.

Owned and consumed by

• Owned by: SD-12.11 Expense, Fee & Carry Processing — the fee-and-expense processing function calculates and verifies the accrued fee amount for each class and period; FO-06 is the record it produces and signs off. SD-12.11 is the sole authoritative source.
• Consumed by: SD-12.9 Fund Accounting & NAV (books the net_charge into the struck NAV — the fee accrual reduces NAV per unit each period; SD-12.9 consumes FO-06 to accrue and book the fee); SD-09.1 Performance Measurement (the net_charge amount is the fee deduction used when computing net-of-fee return — gross return minus the accrued fee gives the investor’s net return); SD-15.14 Client & Investor Reporting (the fee amounts and the OCF reconstruction chain feed class-level client report fee-disclosure sections); SD-16.2 Owner & Investor Reporting (the net_charge by fee_type and the reconstruction chain are the source for the UCITS KIID / PRIIPs KID ongoing-charges disclosure, fund factsheet fee tables, and the ILPA fee-and-expense line items in LP reports).

FIBO alignment

Partial — structural alignment at the fee-computation level; the OCF reconstruction chain and performance-fee mechanics are OpenIM.

• The ongoing-charges figure (OCF) aligns to the UCITS KIID and PRIIPs KID lineage for investor-disclosure cost figures. The total expense ratio (TER) is an older, broader disclosure measure with a different scope; OCF is the successor figure under UCITS KIID / PRIIPs KID and they are not synonymous. These are regulatory constructs under the UCITS Directive / PRIIPs Regulation (EU) and the FCA’s successor UK-PRIIPs rules; the KID/KII document is the rendering of the figures this entity stores. OpenIM references this lineage without asserting a FIBO class for OCF or TER: FIBO’s published Funds ontology does not define an OngoingChargesFigure or TotalExpenseRatio class; the alignment is to the regulatory lineage, not to a named FIBO RDF class. The NAV-per-unit KIID/KID design note (SD-12.9) establishes the same pattern for the NAV-per-unit figure of record; FO-06 follows it symmetrically for the fee figure of record.

What FIBO does not model, and what FO-06 adds:

• The computed fee amount with formula provenance — which fee-schedule version produced this accrual figure, so the accrual is auditable even after the schedule version changes.
• The expense-cap / fee-waiver / reimbursement chain that nets the gross accrual to the disclosed charge — the three-step reduction that makes the OCF reconstructable from stored records.
• The append-only accrual history — the full trail of corrections and restatements for audit, governance and dispute resolution.
• The performance-fee mechanics (HWM applied, hurdle applied, crystallisation trigger) — the computation-bearing attributes that record what the fee-calculation engine applied, not just the resulting amount.

Open extensions

• The sub-period daily accrual ledger — for funds that accrue daily and crystallise monthly, the per-day accrual sub-records linking to the period FO-06 row.
• The formula_spec_ref formalisation as a typed union FK (PM-10 terms_id | FO-02 schedule-version token) rather than a varchar provenance pointer, when the model’s FK grammar is extended.
• The ILPA-granular fee-and-expense breakdown — the ILPA Reporting Template (v2.0, January 2025) carries a detailed fee, expense and carried-interest schedule; the fee_type enum could be extended with ILPA-specific line-item sub-types.
• The hedge-fund equalisation sub-model for performance fees — where investors subscribe mid-period and receive a performance-fee equalisation credit, the per-investor equalisation amount.