How to Audit a Distribution

The audit trail is WaterfallOne's permanent record of every finalized distribution. Once a distribution is locked, every detail (amounts, investor allocations, tier flows, and fees) is recorded immutably. This locked data becomes your source of truth for reporting, reconciliation, and reconstruction of historical distributions.

What's in the Audit Trail

Every finalized distribution creates a detailed, locked record that includes:

• Distribution events: The top-level record of each distribution: date, amount, asset, status.
• Allocations with investor snapshots: Exactly what each investor received, including their capital position and account balance before and after the distribution.
• Allocation line items per tier: A granular record of how cash flowed through each tier (ROC, Preferred Return, Catch-up, Promote, etc.) for each investor class.
• State snapshots: Before and after balances showing the full impact of the distribution on each investor's account.
• Fee events and deductions: Any fees, asset-level fees, or other deductions applied during the distribution, with amounts and timing.

How to Read the Audit Trail

To view the audit trail for a finalized distribution:

1. Navigate to an asset's Distributions tab.
2. Click on any finalized distribution to open its detail view.
3. Scroll to the audit trail section to see all locked records and state snapshots.

The audit trail is organized by investor and tier, making it easy to trace cash flow and verify calculations.

Per-Investor Detail and Tier Tracing

For each investor, the audit trail shows:

• Capital contributed and remaining unreturned capital.
• Which tier the investor received cash from (e.g., ROC, Preferred, Promote).
• Amount received and remaining balance in each tier.
• Sequence of allocations if the investor received cash from multiple tiers in the same distribution.

This per-investor detail lets you trace exactly how cash flowed from your waterfall tiers to each investor, essential for reconciliation and investor reporting.

Void Records and History

If a distribution is voided, the audit trail remains visible with the void reason and timestamp. This creates a complete historical record showing that the distribution was executed and later reversed, rather than simply erasing it. You can always see what happened and why.

Reconstruction and Historical Analysis

Because all distribution data is locked and immutable, you can reconstruct any distribution at any point in time. This is invaluable for:

• Verifying investor statements months or years later.
• Auditing asset performance and compliance.
• Supporting legal or tax inquiries.
• Reconciling with external accounting systems.