Guide to Reading Your Morgan Stanley Smith Barney Statement

Transcription

1 Guide to Reding Your Morgn Stnley Smith Brney Sttement Your Morgn Stnley Smith Brney ( MSSB ) ccount sttement is vluble nd, powerful resource tht provides you with the informtion you need to prtner with your Finncil Advisor s you work towrd relizing your finncil objectives. By crefully reding your sttement, you cn remin up-to-dte on your ccount(s). The gol of this guide is to provide suggestions on how to red nd understnd your sttement. We encourge you to support our go green efforts by reviewing your sttements online vi MSSB Online nd eliminting pper sttements. By enrolling in edelivery, you reduce the volume of pper you hve to mnge, while retining online ccess to seven yers of sttements on MSSB Online. As n dded benefit, you need not wit for the mil: when your sttement is vilble to view online, you receive n emil notifiction. To enroll in edelivery, log in to MSSB Online, click on the Records tb nd select Sign-up for edelivery. If you re not lredy enrolled in MSSB Online, go to: Tble of Contents 1 Introduction 3 Cover Pge 4 Consolidted Summry 5 Account Summry 10 Holdings 13 Activity 14 Additionl Account Sections 16 Annul & Fiscl Reviews 17 Frequently Asked Questions Regrdless of the delivery method you choose, we re committed to providing sttements tht keep you informed s you work towrds reching your finncil gols.

2 The Morgn Stnley Smith Brney sttement is orgnized into eight min components nd is designed with top-down pproch, moving from summry level informtion to the more grnulr detils of ccount holdings nd ctivity. The sttement gives you snpshot of your ccount nd when pproprite, provides perspective on growth nd the chnge in vlue of your ccount(s) over time. Our gol is to give you the informtion tht enbles you to be n informed prticipnt in the finncil mngement of your ccount. key Sttement Components Cover Pge: Provides snpshot of the beginning, ending nd chnge in vlue of your ccount(s). Consolidted Summry: Provides key summry informtion for ll the ccounts included in your miling envelope (i.e., sttement pckge). For single sttement pckges, this section would not pper. Account Summry: Provides summry informtion t n ccount level. The sections in the Account Summry re similr to the Consolidted Summry. Depending upon the type of ccount, there my be dditionl detils (e.g., Retirement contributions, Active Assets Account spending). MSSB sttements re dynmic, showing the relevnt dditionl summries nd detiled sections for ech ccount in given sttement period. These sections include: Holdings: Presents the holdings grouped by product, with informtion unique to the security. Activity: Presents ll ctivity up through the lst business dy of the sttement period. Messges: Alerts you to timely ccount-specific informtion. Reserch Rtings Definitions: Provides definition of the rtings you my see in the Holdings component. Note, tht for Advisory Accounts, the definitions re for Consulting Group Investment Advisory Reserch Sttus Definitions insted. Disclosures: Provides importnt informtion bout your ccounts nd how we conduct business. The following pges contin exmples of sttement sections for illustrtive purposes only nd do not represent complete ccount sttement. morgn stnley smith brney 2

3 Cover Pge The Cover Pge provides n overview of your ccount(s). You will find the sttement reporting period on every pge of the sttement. Sttement frequency is bsed upon the type of ccount nd ctivity. Generlly, Active Assets (AAA) nd Advisory ccounts receive sttements every month. Individul Retirement Accounts (IRA) nd Bsic Securities Accounts (BSA) receive sttements on qurterly bsis (unless there hs been qulifying ctivity). Eduction ccounts receive qurterly sttements only detiling ctivity for tht period. Also displyed re c the contct detils for your Finncil Advisor or Tem, d the direct phone number for the Client Interction Center nd e the firm s Web site. d e b c b The vlue of your ccount(s) is provided: Totl Vlue Lst Period nd Totl Vlue of Your Accounts. Net Contributions / Withdrwls represents csh nd / or securities tht hve moved into or out of ny of your ccount(s). Chnge in Vlue of your ccounts represents the difference between the Totl Ending Vlue s of the end of the sttement period minus the Totl Beginning Vlue, Net Contributions / Withdrwls nd Security Trnsfers. For more detiled brekdown of Chnge in Vlue, refer to the Account Summry component. morgn stnley smith brney 3

4 Consolidted Summry The Consolidted Summry is good plce to strt ssessing your totl investment picture nd provides concise, t--glnce snpshot of ll ccounts included in your linked sttement pckge. The Consolidted Summry nd the Account Summry re similr components, with the Consolidted Summry providing n ggregte view of ll of the ccounts included in your sttement pckge. Clients with single ccount will receive only the Account Summry. b The OVERVIEW OF YOuR ACCOuNTS section within the Consolidted Summry provides key informtion for ech ccount, with totls by ccount ctegory (i.e., Personl, Retirement, Eduction, Trust, nd Business). b The strting pge number for ech ccount is displyed in the lst column on the right of the sttement pge Begins on Pge. morgn stnley smith brney 4

5 Account Summry The Account Summry provides n overview for ech of your ccounts. For your convenience, you will find the Account Number nd Account Nme t the top of every pge in the blue br. b Account Type nd Investment Objectives re displyed for your reference. If you hve sked your Finncil Advisor to nicknme your ccount, the nicknme will pper here, s well s in the OVERVIEW OF YOuR ACCOuNTS section. b c d c The CHANGE IN VALuE OF YOuR ACCOuNTS SECTION ws designed s quick nd esy wy to see your ccount s chnge in vlue for the current period nd yer-to-dte; nd nswer the simple question: How m I doing? Strting with the Totl Beginning Vlue, we dd ll net Contributions (credits) nd Withdrwls (debits), s well s Security Trnsfers tht flowed into or out of your ccount. This results in the Chnge in Vlue figure which represents the difference between the Totl Ending Vlue s of the end of the sttement period minus the Totl Beginning Vlue, Net Contributions / Withdrwls nd Security Trnsfers. d The CHANGE IN VALuE OVER TIME grph provides n historicl view of the impct of ny deposits nd withdrwls on the chnging mrket vlue of your ccount. morgn stnley smith brney 5

6 Account Summry (continued) In most cses, the ALLOCATION OF HOLDINGS is displyed s pie chrt. However, if the ccount hs either short position, or debit blnce, the informtion is displyed s br chrt. b Accounts re orgnized in the sttement pckge into ctegories (i.e., Personl, Retirements, Eduction, Trust, Business) nd within ctegory by ccount number. The Wyfinding tbs on the bottom of the pge signls where you re within the sttement pckge. b morgn stnley smith brney 6

7 Account Summry (continued) To help you understnd both sides of your finncil ledger, we disply BALANCE SHEET view of your ssets, s well s libilities (which my include short positions, debits, nd other libilities). When relevnt, line items for fixed income securities include interest ccruls s indicted by the ^. For more detils on Accrued Interest, see the Holdings component. b b We know tht mny of our clients like to blnce the movement of csh in their ccounts from opening to closing blnces, nd therefore CASH FLOW summry tble hs been included. The ctegories re ligned with the wy our clients hve told us they view the movement of their funds. The tble begins with n opening blnce, which is the combined opening blnce of your csh, deposits nd money mrket funds. It then lists vriety of deposit nd withdrwl line items, grouped into three mjor ctegories: Investment Relted Activity, Csh Relted Activity nd Debit Crd / Check Activity. Since our sttements present trde dte view of ctivity, you my see trdes tht were executed during the lst dys of the month. In this cse you will lso see line for Net Unsettled Purchses / Sles in the BALANCE SHEET nd CASH FLOW sections which would represent the net mount of ll unsettled securities trnsctions. In the subsequent month, this mount will be reflected in line clled Prior Unsettled Purchses / Sles in the CASH FLOW section. morgn stnley smith brney 7

8 Account Summry (continued) The INCOME SuMMARY presents both Txble Income nd Tx-Exempt Income credited to your ccount for this yer nd this period, nd is ctegorized by type of distribution including Qulified Dividends, Other Dividends, Long Term Cpitl Gins Distributions, Interest, nd Other Income. For ccounts not subject to IRS tx reporting by MSSB, txble nd tx-exempt income is not broken out seprtely. c b b GAIN / (LOSS) SuMMARY presents the Net Relized Gin / (Loss) for this period nd this yer. Net Unrelized Gin / (Loss) is clculted bsed upon the cquisition dte of the holding through the lst business dy of the current sttement period. When security positions re sold, the detils of ech trnsction re displyed t tx lot level in seprte REALIZED GAIN / (LOSS) section within Activity. c When relevnt, the ADDITIONAL ACCOuNT INFORMATION provides Accrued Interest Pid nd Accrued Interest Received on purchses nd sles of fixed income securities, s well s Foreign Tx Pid, Return of Cpitl nd Municipl Interest. morgn stnley smith brney 8

9 Account Summry (continued) b The RETIREMENT RECAP section trcks contributions nd distributions for Coverdell ESA, IRA nd VIP Bsic ccounts. The section lso includes: Fir Mrket Vlue of the ccount which is reported to the IRS nnully for IRAs. If you hve hd Rollovers, Conversions, Contributions or Rechrcteriztions deposited to these ccounts, you will receive seprte IRS Form Mx. Individul Contributions Allowed is bsed on your ge nd the mximum IRA contribution llowed under current regultions. If you re over ge 70 ½, this section only ppers if you hve Roth IRA. Any unspecified contributions will be included with deductible contributions. Rollovers, Roth Conversions nd Roth Rechrcteriztions re ggregted. c b HISTORICAL CONTRIBuTIONS & DISTRIBuTIONS is n t--glnce view of contributions nd distributions for the most recent five yers, with summry line cpturing ll prior contributions nd distributions. This section is displyed on ech qurterly sttement for Coverdell ESAs nd IRAs. c The Primry nd Contingent beneficiries tht you hve identified re listed on your IRA sttement. It is importnt to review your IRA beneficiries nd contct your Finncil Advisor regrding ny necessry chnges. For nnuities displyed in IRA ccounts where MSSB is not the custodin, contct the crrier for the current nnuity beneficiry. For eligible IRA clients, we clculte your nnul Required Minimum Distribution (RMD) nd disply this mount on ech qurterly sttement, mking it esy to trck your yer-to-dte distributions, nd to compre those withdrwls to the required nnul mount. The RMD clcultions re vluble for clients ge 70½ nd older, who must withdrw the RMD. For clients who hve elected to py their IRA fees by check, your IRA Invoice will be included with the qurterly sttement prior to the nniversry of your ccount s open dte. morgn stnley smith brney 9

10 Holdings The Holdings component presents comprehensive list of the ccount s positions s of the lst business dy of the sttement period nd is orgnized by product type. For certin products such s Alterntive Investments nd Insurnce nd Annuities, other relevnt detil is provided. In Holdings, most securities re listed lphbeticlly by nme; though fixed income securities re displyed by mturity dte. The type of informtion listed for ech holding vries depending upon the security. Generlly, you ll find the Quntity, Totl Cost, Mrket Vlue, Unrelized Gin / (Loss), Estimted Annul Income, nd Yield % to the right of the Security Description. Trde Dte nd Unit Cost re displyed for ccounts which reflect tx-lot level gin / (loss) detils. Additionl informtion is displyed beneth the security nd my vry depending on the type of security. For exmple, for Common Stocks, items such s Current Shre Price, Reserch Rting nd Next Dividend Pyble Dte re displyed; for Fixed Income Securities, Coupon Rte, s well s mturity nd rtings re displyed; for Mutul Funds, Mutul Fund Reinvestment Options re displyed. As convenience, for eligible ccounts, the vlue of some outside investments my be shown on the sttement. morgn stnley smith brney 10

11 Holdings (continued) For Fixed Income securities, Originl Unit Cost nd Adjusted Unit Cost s well s Accrued Interest re displyed. Both the relized nd unrelized gin / (loss) informtion my hve been djusted for vriety of resons; including return of principl, ccretion of originl issue discount (OID), mrket discount nd the mortiztion of bond premiums. Accrued Interest is the estimted mount tht would be received upon sle of fixed income securities. It is clculted from the dte of the lst coupon pyment (or dted dte) through the closing dte of the sttement, bsed on informtion provided by the issuer. morgn stnley smith brney 11

12 Holdings (continued) b b For Mutul Funds, severl unique pieces of informtion re presented which, when tken together, provide comprehensive snpshot of your mutul funds. Unrelized Gin / (Loss) compres the Totl Cost of ll fund purchses (including shres cquired through reinvestment of distributions) with the current Mrket Vlue. Totl Purchses vs Mrket Vlue is provided to ssist you in compring your totl purchses, excluding reinvested distributions, with the current vlue of the mutul fund positions in your ccount. For mutul funds for which you choose not to reinvest distributions, Cumultive Csh Distributions (including income nd cpitl gins distributions) reflects mounts received for ech fund. It my not reflect ll such distributions, including those on investments mde prior to the ddition of this informtion on sttements. Net Vlue Increse / (Decrese) compres the difference between : Your totl purchses (excluding reinvestments) plus the csh distributions nd, The current vlue of the fund s shres (including reinvestments). morgn stnley smith brney 12

13 Activity As prtner with your Finncil Advisor, review of the Activity on your sttement is n importnt prctice. All ctivity for the month is included in this component. The CASH FLOW ACTIVITY BY DATE section is chronologicl disply of the ctivities ffecting your overll csh blnces; including purchses nd sles, dividends nd interest pyments. In ddition, DEBIT CARD & CHECKING ACTIVITY re lso discretely broken out in their own section. Becuse the sttement presents ll trdes executed in the current sttement period, you my see trdes in this section tht hve not settled by the end of the month. Items not ffecting your csh blnce, such s Options Activity, Corporte Actions, Open Orders, nd Security Trnsfers, re displyed seprtely by ctegory. An lterntive presenttion of ctivity by ctegory is vilble, with ctivity displyed in discrete ctegories (e.g., Purchses & Sles, Income & Distributions, Deposits & Withdrwls). Plese spek to your Finncil Advisor for more detils. morgn stnley smith brney 13

14 Additionl Account Sections Ech month, your Active Assets Account sttement will provide detiled informtion on your checking ctivity; including Pyee Nme, Check Number, Dollr Amount, Dte Written nd Dte Clered. Using the Expense Anlyzer codes in the bck of your check register, you cn nnotte your checks nd ctegorize your personl, business nd tx-deductible expenses, mking budgeting nd tx preprtion esier. You will lso receive summry of pyments by ctegory, nd t yer-end you'll receive detils for the entire yer's checks, grouped nd summrized by expense ctegory. With the Morgn Stnley Smith Brney Debit Crd, you gin ccess to the funds in your Active Assets Account when you need them, nd wherever the crd is ccepted. All of your Debit Crd ctivity including purchses, csh withdrwls nd ATM trnsctions re detiled on your monthly sttement nd recpped t yer-end. A grph of TOTAL SPENDING YEAR-TO-DATE nd REWARDS SuMMARY re lso provided in the Account Summry. morgn stnley smith brney 14

15 Additionl Account Sections (continued) The unsettled PuRCHASE / SALES ACTIVITY is displyed for trdes tht were executed during the current sttement period, but hve not settled (including trdes with extended settlements). When the trdes re purchses, the positions re lso reflected in the Holdings component; nd when the trdes re sles, the positions re no longer displyed in the Holdings component. b b If you hve sked us to send copies of your sttement to dditionl prties, the nmes of the Interested Prties re listed here. (Fees my pply. Ask your Finncil Advisor for more detils). morgn stnley smith brney 15

16 Annul & Fiscl Reviews For eligible ccounts, yer-end review component is produced For Active Assets Accounts, the Annul Review is summry of the ccount ctivity for the preceding 12 months, nd, for eligible ccounts ccompnies the December sttement. This dditionl component is lso vilble for Mnged Bsic Securities Accounts. It is not vilble for Retirement ccounts. As prt of the Annul Review, Debit Crd ctivity is orgnized by spending ctegory; nd checks re orgnized by expense code, with subtotls for Deductible nd Non-Deductible. Business Accounts with fiscl yer-end other thn December re eligible for Fiscl Review, which will ccompny the lst sttement of their fiscl yer. Business ccounts whose fiscl yer end is December will get n Annul Review with their December sttement. morgn stnley smith brney 16

17 Frequently Asked Questions Q. I don t wnt to wit to get my sttement in the mil. Do I hve ny other options? A. Yes! Clients enrolled in edelivery cn ccess documents electroniclly. In most cses, enrollment in edelivery replces the pper miling. As sttements nd other documents become vilble, n emil is sent to enrolled clients with link to log on nd ccess the document. Enroll n ccount in edelivery vi MSSB Online or Online Business Services. To enroll ll ccounts in your Account Link Group for sttement edelivery, enroll the Primry ccount. Q. Wht does trde dte ctivity presenttion men? A. Historiclly there hve been two pproches to displying security trnsctions, nd the impct on your ccount: Settlement Dte Displying only those trnsctions tht hve settled within the current sttement period; or Trde Dte Displying ll trdes executed within the current sttement period, regrdless of whether or not they hve settled. In the pst, when clients purchsed or sold position t the end of the month, they hd to wit until the next sttement to see the impct of the trde. MSSB uses trde dte ctivity presenttion in order to reflect the impct of ll trdes executed through the lst business dy of the month nd, to lign with both performnce nd cost bsis reporting. Q. How re unsettled trdes represented on my sttement? A. Any position bought or sold, regrdless of whether or not it hs settled, will pper in (or, be removed from) the Holdings component of your sttement. Since neither monies nor securities re due to the contr side until settlement dte there is no impct to csh, deposits or money mrket funds until the trdes settle. As result, when n unsettled trde is included on your sttement, you will see Net Unsettled Purchses / Sles in the BALANCE SHEET nd CASH FLOW summry sections so tht the Totl Vlue is not over (or under) stted. Q. Wht re the Estimted Annul Income nd Estimted Yield tht re displyed in the Holdings component of my sttement nd how re they different from the informtion in the Income Summry? A. Estimted Annul Income is projection of future income nd the Income Summry section is recp of the income ctully credited to your ccount during the current sttement period yer-to-dte. The Estimted Annul Income which ppers in the Holdings is bsed upon the dividend or interest expected to be received over the next twelve months. Generlly, for equities, it is the most recent dividend (per-shre) times the pyment frequency, times the number of shres or units held. Estimted Yield is then clculted by dividing the totl estimted nnul income by the current mrket vlue of the entire position. For exmple: Number of Shres Current Shre Price Most Recent Dividend Amount Dividend Pyment Frequency (Qurterly) Estimted Annul Income Current Mrket Vlue of the Entire Position Estimted Yield 100 $ $ $ % Mutul fund Estimted Annul Income is bsed upon historicl distributions over the preceding 12 month period, rther thn on the most recent dividend. The Annul Percentge Yield (APY) for Bnk Deposits represents the pplicble rte in effect for your deposits t the sttement ending dte. This APY my be different thn the APY tht ws in effect during the sttement period. For Money Mrk Funds (MMF), the Current Yield refers to simple nnulized yield (net of fees) for n identified seven clendr dy period. morgn stnley smith brney 17

18 Frequently Asked Questions (continued) Q. Wht is the reltionship between Shre Price nd Mrket Vlue? A. Shre Price of the securities displyed on the sttement is obtined from vrious sources. For securities tht re listed on n exchnge or trde continully in n ctive mrketplce, the Shre Price reflects the closing price s of the lst business dy of your sttement period. For securities tht trde less frequently, the price generlly reflects the bid price if it is vilble. Fixed income prices re provided by outside pricing services nd / or computerized pricing models, which do not lwys give us ctul mrket vlues nd my be bsed on recent trnsctions or bids, or estimtes. For Mutul Funds, the Shre Price is represented by the fund s Net Asset Vlue (NAV) t the end of the dy. Depending upon the security type, the shre price lbel my vry, e.g., contrct price for options, unit price for bonds. Your sttement Disclosures contin more detil on pricing nd ccount vlutions. Mrket Vlue is generlly derived by multiplying the Shre Price times the Quntity. For certin securities (such s Collterlized Mortgge Obligtions), there is nother component, the Fctor, which is lso prt of the eqution. The fctor reflects the remining principl blnce of mortgge security nd it chnges fter ech principl pyment. Q. Wht's the difference between Cpitl Gins nd Cpitl Gins Distributions? A. A Cpitl Gin is profit between the security's djusted cost bsis nd the price t which it is sold. A Cpitl Gins Distribution is mutul fund's distribution to shreholders of the profits on the sle from one or more of fund's underlying securities. Q. Wht s the difference between Unrelized Gin / (Loss) nd Relized Gin / (Loss)? A. Unrelized Gin / (Loss) presents the potentil gin or loss if you were to hve sold security t the price displyed on your month-end sttement. Unrelized Gin / (Loss) does not include commissions or fees tht my pply to proceeds upon the finl sle of the security. Gins or losses re considered relized when the position is ctully sold, nd the detils (which would include the impct of ll commissions nd / or fees) re presented in seprte section on your sttement. Q. In my summry sections, why do I only see one number for Unrelized Gin / (Loss), but I see This Period / This Yer for Relized Gin / (Loss)? A. Generlly speking, Relized Gin / (Loss) is reportble in the yer the trde is mde. Since you hve the option to see your relized Gin / (Loss) detils for the current sttement period, or for yer-to-dte, we provide summry totls for ech. For the positions tht you currently own nd for which there hs been no reportble event (i.e., sle), we disply unrelized Gin / (Loss) informtion from cquisition dte to the present, in the Consolidted Summry, Account Summry nd the Holdings components. morgn stnley smith brney 18

19 Frequently Asked Questions (continued) Q. Wht is the difference between ll of the cost terms? A. Totl Cost (lso known s Cost Bsis) represents the mount pid for the security, including commissions nd fees if pplicble, nd excluding ccrued interest on fixed income purchses. Totl Cost my differ from the net mount on the trde confirmtion (e.g., for fixed income trdes), s the net mount pid could include ccrued interest pid to the seller (or received from the buyer). Unit Cost represents the per-shre mount pid for the security, including commissions nd fees if pplicble nd excluding ccrued interest on fixed income purchses. For exmple: 100 shres t $50 per shre $5, Commission $55.00 Trnsction Fee $6.00 Totl Cost $5, Unit Cost (Totl Cost / # of Shres) $50.61 Adjusted Cost: Your Totl Cost (or, Cost Bsis) my be djusted for vriety of resons. For fixed-income securities, the mjority of djustments to cost bsis re either mortiztion of the premium (the mount you pid for bond in excess of its fce vlue) t purchse, or the ccretion of originl issue discount (OID) or mrket discount. Whether you choose to mortize the premium on non-municipl bonds or not, the pertinent informtion is redily vilble. Amortiztion is n ccounting procedure tht reduces the cost bsis of bond by the mount of ny premium (the mount in excess of pr) pid for the bond. Cost bsis of the bond will be decresed dily until it is equl to its fce vlue t mturity dte (or erlier cll dte). MSSB mortizes premiums pid on both tx-exempt nd txble bonds. And, lthough the premium on tx-exempt bond must be mortized, clients my use this informtion or elect not to do so for txble bonds. Accretion refers to the dily process of incresing your originl cost bsis by the Originl Issue Discount (OID) tht ccrues on the bond until the sle or redemption of the bond. IRS regultions require the holder to report OID s it ccrues over the term of the debt instrument whether or not you receive ny pyments from the issuer. If you purchse the bond t originl issue nd hold it to mturity, the bsis upon mturity will hve incresed to the fce mount. We use the constnt yield method, lso referred to s the economic ccrul method, for both municipl nd txble fixed-income securities. Cost bsis my lso be djusted for other securities. For equities, the bsis must be djusted for certin events tht occur fter purchse. For exmple, if you receive dditionl stock from non-txble stock dividends or stock splits, the bsis of your originl shres is reduced. Similrly, bsis is reduced when you receive non-dividend distributions, such s non-txble return of cpitl (up to the mount of your bsis). morgn stnley smith brney 19

20 Frequently Asked Questions (continued) Q. Wht do you men when you sy ccounts subject to tx reporting? A. Accounts subject to tx reporting re those ccounts for which Morgn Stnley Smith Brney is required to provide n IRS Form 1099 for US ccounts nd form 1042-S for foreign ccounts. Certin ccounts re exempt from MSSB s reporting requirements (though these ccounts my hve reporting requirements of their own). These include, mong others, corporte, tx-exempt orgniztions, IRA nd retirement ccounts. Q. Wht is Accrued Interest, nd how does it impct my ccount? A. Accrued Interest is the estimted mount of interest tht would be included in the totl mount received upon the sle of fixed income position; nd is clculted from the dte of the lst coupon pyment (or dted dte) through the closing dte of the sttement. Since the vlue of your fixed income positions includes the interest tht ccrues every dy, this provides comprehensive vlution of your ccount. The Accrued Interest is shown in Holdings for ech fixed income security, s well s on the BALANCE SHEET (where it is included in the overll vlue of ech fixed income product type). Q. Wht is Accrued Interest You Pid nd Accrued Interest Received? A. Accrued Interest You Pid is tht portion of bond purchse tht represents the interest which will be given to the seller of the bond on next coupon pyble dte. As the new owner of the bond, the purchser will receive the entire coupon pyment even if it hs not been owned for the full period. This mount is prt of the totl trnsction cost but not prt of the bond s cost bsis. On the other hnd, when client sells bond, Accrued Interest Received represents the interest tht hs ccrued since the lst coupon pyble dte nd to which the client is entitled. And, lthough prt of the totl trnsction proceeds, Accrued Interest You Pid is not prt of the proceeds for the purposes of gin / (loss) clcultion. Q. My bonds seem to be in rndom order. Are they in ny order? A. Bonds re presented by mturity nd / or pre-refunding dte, nd then lphbeticl within dte. Morgn Stnley Smith Brney does not render dvice on tx nd tx ccounting mtters to clients. This mteril ws not intended or written to be used, nd it cnnot be used by ny txpyer, for the purpose of voiding penlties tht my be imposed on the txpyer under U.S. federl tx lws Morgn Stnley Smith Brney LLC. Member SIPC. CRC / /12 morgn stnley smith brney 20