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RE: Distributions and taxable components

MySF2 — Thu, 28 Jun 2007 22:52:10 GMT

This is a short post to advise all readers of this discussion thread that the dividend and distribution processing has been revised for version 3.0.0.

Dividends and distributions can now be tagged for completion at a later date, which enables users to enter tax details when they become available. At that time the software automatically adjusts previously entered incomplete dividends and distributions.

This thread will stay on the forum to enable users to view past feedback.

Regards,

MySF

MySF2 — Thu, 07 Jun 2007 21:45:22 GMT

Hi,We are currently testing this and other new features. We would anticipate that testing will be complete in the next week and provided there are no major problems founds the update will be released in the next 2-3 weeks.Regards,MySF

bryanlovquist — Thu, 07 Jun 2007 21:45:22 GMT

HelloI was wondering, when do you expect to release the new functionality as discussed in the previous postings?ThanksBryan Lovquist

MySF2 — Thu, 07 Jun 2007 21:45:22 GMT

Hi,We will be including this in the next major update. Because there are several other modifications to make, this is likely to be at least another 8-10 weeks away.Before that time we will also release a new portfolio manager which contains this exact functionality. Based on what we have learned from that so far and the feedback we receive from users we may modify the approach outlined in previous posts to make it a smoother process.The new portfolio manager is called Manage Invest ([url]http://www.manageinvest.com[/url]). It is capable of administering any type of portfolio from single investor share portfolios to large investment clubs, trusts etc. It offers all of the functionality of MySF but the rules are not hard coded for SMSFs.Please note that most of the functionality in Manage Invest will also appear in MySF after a series of updates.Regards,MySF

Release schedule

bryanlovquist — Thu, 07 Jun 2007 21:45:22 GMT

HelloI was wondering, when do you expect to release the new functionality as discussed in the previous postings?ThanksBryan Lovquist

MySF2 — Thu, 07 Jun 2007 21:45:22 GMT

We will consider the use of a different account and post a reply here.Regards,MySF

Distributions and taxable components

bryanlovquist — Thu, 07 Jun 2007 21:45:22 GMT

Sorry, I realised that the point that I was trying to make in my last post was not clear.The comment re. "logical credit and debit ..." was not well formed.The question that I should have asked is:Do you expect the transaction generated as a result of the "Complete Distribution Details" functionality to leave funds (re. that set of distributions) in the 4110 account. If so, it would seem that the meaning or interpretation of the account changes as transactions are processed against it. It is not an income account until after the last "Complete Distributiuon Details" functionality is complete. Before that it is a combination suspense/income account.I think a designated suspense account approach is cleaner, if for no other reason that errors in data entry are a lot easier to detect and 4110 remains an income account whose interpretation has/does not change.RegardsBryan Lovquist

Distributions and taxable components

bryanlovquist — Thu, 07 Jun 2007 21:45:22 GMT

Re your reply above concerning the entry of the total distribution amount.Is it your intention then that the "Complete Distribution Details" functionality would check the amount entered against the total of the distributions entered via the "Distributions" functionality and would not allow the process to continue if there was a mismatch?Will the transaction created as a result of "Complete Distribution Details" possibly include both a logical credit and debit to 4110 - Distributions Received? I am sorry, I cannot remember the form of the transaction generated in the current version of the software. If so, would usage of a suspense account not be more robust? After EOY processing, one simple check would be to ensure that the amount in the suspense account has been reduced to zero.RegardsBryan Lovquist

Re: Distribution enhancements

MySF2 — Thu, 07 Jun 2007 21:45:22 GMT

[quote]Were the amounts shown on the screen images intended to reflect the documentation? If they were, then I don't understand.[/quote]The text of the message above has now been updated to be more in line with the data on the screenshots.We will post a longer and more details description of the process that would be undertaken, but to answer some of the specific questions:Yes, it would be necessary to enter the amount again, as this would serve as another checkpoint to make sure that there have been no entries missed or duplicated through the year.The specific transactions generated would depend entirely on the actual details of the distribution, so it is a little difficult to be precise with account numbers etc. What is likely is that there would be no use of suspense accounts, as the received amount can be placed straight into 4110 - Distributions Received, and reversed out if needed at the time that details are provided.Regards,MySF

Distribution enhancements

bryanlovquist — Thu, 07 Jun 2007 21:45:22 GMT

HelloIn general, this looks similiar to what I was expecting.Were the amounts shown on the screen images intended to reflect the documentation? If they were, then I don't understand.It was also not clear to me the process which would be followedin the case where more than one distribution is received and entered via the "Distributions" screen.Perhaps the documentation "Continuing from Step 1, ... " could be enhanced.Is there any way that the process could be made VERY robust re. potential errors? The application does have all of the "amount" data for each distribution. Is it necessary that the user re-enter this when performing "Complete Distribution Details".Could you post the set of transactions that you would expect to generate from the "Distributions" screen entries and the subsequent transactions that you would expect to generate as a result of the "Complete Distribution Details" screen. Please us an example incorporating more than one distribution being entered on the "Distributions" screen for a singe asset.RegardsBryan Lovquist

MySF2 — Thu, 07 Jun 2007 21:45:22 GMT

Modification to distribution processing.This posting describes proposed changes to distribution processing in MySF Manager.Current difficulties stem from the fact that there are cases when companies issue several distributions during a given tax year without providing specific breakdowns. To address this problem, distributions handling will be amended to allow distribution records to be tagged for completion at a later date. The completion process must then be run before year end to ensure that all details relevant to income and taxation are provided.Step 1) Recording a distribution with only the full amount provided.There will be a modification to the distributions screen, which will be to add a checkbox allowing the distribution to be tagged as “details pending”. To retain accuracy in bank reconciliations, the distribution will still require that an amount be specified as received. The distribution will then be processed as normal, typically with the full amount recorded to 4110 – Distributions Received.For example a distributions of $150 on 1 May, without exact details of breakdown, would be recorded as Franked Amount $150, Income Account: 4110 – Distributions Received, Details Pending.http://www.mysf.com.au/images/uploads/1334886285_d1.JPGStep 2) Allocating amounts when details are received.An additional menu item will be added, called “Complete Distribution Details”. This function should be invoked when full details of the distributions received from a particular company are received.Completing distribution details takes three steps:i) Select which asset’s distribution details have been received.ii) Allocate the full amount. At this point the full dollar amount of “details pending” tagged distributions from this asset will be shown, and asked to be allocated across a screen that closely resembles the current distribution screen.iii) Automated amendment.After validation and confirmation the system will proceed to amend the distributions previously entered, based on the amount received as a percentage of the total distribution in each instance.Continuing from Step 1, if another distribution was received for $30 and recorded as details pending; users would need to allocate a total of $180 of income across the various fields, which would then be automatically allocated proportionately across the same fields for the two distributions. This would actually mean that the distributions processed would be reversed and new distributions processed, this time with full details.The screenshot below shows an example where there were no distributions other than the $150 was received, but the administrator has received the details of the distribution of the $150 and can now split is accurately. In such a situation, the process would also adjust the entry made.The year end process would not be allowed to run until there are no more distributions tagged as “details pending”.http://www.mysf.com.au/images/uploads/791569200_d2.JPGWe would like to invite MySF users to comment on this proposal, either by posting a reply in this thread, or by emailing us at info@mysf.com.auRegards,MySF

Intermediate action

bryanlovquist — Thu, 07 Jun 2007 21:45:22 GMT

HelloI was wondering if you have had an oportunity to consider my suggestion (two above) where I put forth the proposal that MySF make public the specs to the suspense account. We could then create it manually and continue with the entry of distribution transactions.Given that the first quarter is now over, I have distributions that have to be entered. I am currently resorting to a spreadsheet to maintain an accurate picture of the asset situation.RegardsBryan LovquistPS - If not, do you have any idea how long it will be before you release the upgrade?

wanzhu — Thu, 07 Jun 2007 21:45:22 GMT

[Quote]To be fair to the MySF guys, if the entity can't tell you definitively during the year what the tax position of their distributions is, you can't really expect MySF to accurately post the entries until year end.As for your suggestion Wanzhu, it means you won't have an accurate picture during the year of the fund's tax position. I would like to know within a reasonable margin what the fund tax position is during the year. Thus I would prefer to enter the 'pro forma' information that accompanies each distribution - which is typically 90%+ correct - and then make a relatively minor adjustment at year end. [End quote]I don't want MySF to do the impossible. If there is no data available from the paying institution, then obviously nothing can be entered until it is available. What I am saying is that the software should be designed (says I, who has no clue about software design!) to reflect what actually happens and, when that data does become available, at year end, there is a simple means to enter it up to produce the required journal entries and an accurate tax position.I don't need to keep track of my fund's tax position during the year, although I understand that others may. In any event, the distributions that I receive during the year give no information at all, apart from the sum being paid, so I have no hope of working out the tax position.Finally, in case you are wondering, I really like using MySF, and I am hoping, hoping, hoping, that this deficiency can be remedied.

Don't have to wait

bryanlovquist — Thu, 07 Jun 2007 21:45:22 GMT

If the approach that MySF is taking is generally as described in the third post, ie. usage of a suspense account(s). It may not be necessary to wait until MySF has completed all of the work associated with this enhancement.If MySF was to inform us of the specification of the suspense account(s). We would be able to manually create the account(s) and continue with the posting of the distribution transactions. When the enhancement was complete, the upgrade procedure could ask the user for the deatails re. the suspense account or notice that it already exists and not attempt to create it.The update could then conceivably be delayed until this EOY.It is the generation of the EOY journal which is complex and we don't need that immediately.RegardsBryan Lovquist

adrianrees — Thu, 07 Jun 2007 21:45:21 GMT

Maybe I am expecting too much, but unless this can be sorted out, my accountant will be repeating his recent advice to me, namely that using MySF is of questionable value when he has to spend so much time at the end of the year sorting out the figures to prepare an accurate tax return.[/quote]To be fair to the MySF guys, if the entity can't tell you definitively during the year what the tax position of their distributions is, you can't really expect MySF to accurately post the entries until year end.As for your suggestion Wanzhu, it means you won't have an accurate picture during the year of the fund's tax position. I would like to know within a reasonable margin what the fund tax position is during the year. Thus I would prefer to enter the 'pro forma' information that accompanies each distribution - which is typically 90%+ correct - and then make a relatively minor adjustment at year end.(As an aside Wanzhu, I would have thought the fund accounts should be already correct and signed off by the auditor before the accountant prepares the tax return. Do you sequence it some other way?)As per my previous post (08 Sep), what is needed is a simpler way of presenting the screens to amend the information at year end - whichever way the system operates. The MySF guys say that this needs some major rework on the system so let's see what emerges. Hopefully it won't be TOO long coming!

MySF2 — Thu, 07 Jun 2007 21:45:21 GMT

We are currently checking how we could add in functionality similar to what is outlined in bryanlovquist's post above (third from the top).The main problem with such approaches is that you would still need to wait around to receive the final statement with all of the detailed information, by which time you may have also started to receive distributions for the following year. This means that you cannot tag it against an asset, which is what would be the logical solution otherwise. It also adds an extra step to year end processing where distribution accumulation records would need to be split.This and other difficulties are probably a big part of the reason why there is no investment and asset management software package that has such functionality at the moment.Regards,MySF

wanzhu — Thu, 07 Jun 2007 21:45:21 GMT

I have posted queries before about how to handle propery trust distributions as well as the end of year data in annual tax statements. None of the responses has been satisfactory to me, although I am very appreciative of all the attempts to help me solve my problems.What I would like to see is the processing of distributions to reflect what actually happens for me, i.e., two or four distribution receipts during the year, each of which is a sum of money only, with no information re the various components; then, at the end of the year, an annual statement which contains all the details of components, but on an annual basis and not identified with each of the two or four distributions during the year. Thus, a simple process of entering the distribution sums as they are received, and then, at the end of the year, a further process to automate whatever adjustments need to be made to deal accurately with the annual components disclosed in the annual statements.Maybe I am expecting too much, but unless this can be sorted out, my accountant will be repeating his recent advice to me, namely that using MySF is of questionable value when he has to spend so much time at the end of the year sorting out the figures to prepare an accurate tax return.

Your last comment

mysf — Thu, 07 Jun 2007 21:45:21 GMT

BrianIf you would like us to keep answering your questions and taking on board your ideas we are happy to do so. I have already agreed to look at improving the processShould it take 2 weeks to process distribution transactions - NoIs the distribution process broken - NoCan it be improved - Yes absolutely and we will look at it.RegardsMySF

Default asset allocation

bryanlovquist — Thu, 07 Jun 2007 21:45:21 GMT

The default asset allocation per asset class does not solve the problem. For instance I have investments in managed funds (the asset class). Some of the managed funds invest primarily in Australian securities, others in international securities and others in infrastructure securities. Having a default asset allocation is of no use.Also when you do a distribution/reinvestment the newly created asset should inherit its properties form the asset which created the distribution. I am constantly having to fix up minor typo errors that I do when processing a distribution.I don't believe that there is any situation under which assets having the same asset code would have differing asset allocations. The asset allocation should be at the asset code level not the asset level.I have come to appreciate while doing the EOY entries this year how painful the current distribution recording mechanism is. In order to get things correct and still have the functionality of recording distributions as they occur throughout the year (which I did) I am havinf to manually do the calculations and create journals for every distribution to get the tax components correct. What should be taking me an evening has now stretched on to 2 weeks!!!Distribution processing needs to be fixed!!!RegardsBryan Lovquist

adrianrees — Thu, 07 Jun 2007 21:45:21 GMT

I agree an easier process would be helpful.The difficulty is how accurate you want tax estimates to be during the year. If you want them fairly close, you need to enter the tax components during the year, expecially if you are contemplating selling the trust units.Perhaps there could be a special 'amend franking' or 'amend distribution' screen. This could present the current amounts entered and have a new box next to each current amount for the entry of the new components, including the usual checking mechanisms to make sure they balance.Behind the scenes, the MYSF program could 'seamlessly' do the appropriate reversals and new postings to amend the amounts.If I can offer some gratuitous advice: The more I see the issues users have, the more I believe that a little more user friendliness in how MYSF presents data entry screens, requests for information and especially facilitating amendments (e.g. the two step asset removal process) will go along way towards helping.As I've said befoire, this would not only help users but also ease your support load. Of course I don't know how much aditional programming would be required to convert simpler screens into the right entries; but it may be worth it overall.

MySF2 — Thu, 07 Jun 2007 21:45:21 GMT

We currently have functionality that allows you to define a default asset allocation for an asset class. To see how this works, select an asset class from System Setup > Asset Classes and click on Edit Default Allocations in the bottom left hand side of the screen. This allows you to define a default allocation so that you do not need to type 100% for Shares every time you add one, but you can change it at the asset level if needed.We will do a major update that includes a revision of the user interface, but this is still some time away.Regards,MySF

Distribution reinvestment

bryanlovquist — Thu, 07 Jun 2007 21:45:21 GMT

If you are going to do some work on distributions anyway. Another thing that I would like changed would be that I can choose the asset code for which I am doing a distribution/reinvestment and then all of the attributes of the new asset would be defaulted from the other first asset associated with that code.This would include such things as code, short name, long name, distribution accross asset categories etc.I would also like to be able to set the distribution accross asset categories at the asset code level rather than the individual asset level.Could you also use more of the screen area. I have a 20" monitor but your application uses only a fraction of the available screen area. I am constantly scrolling in order to see the information that I need to see. At least allow me to resize the windows.RegardsBryan Lovquist

Another thought

bryanlovquist — Thu, 07 Jun 2007 21:45:21 GMT

This financial year I find myself in a situation where the distribution from a managed fund did not occur until July 18 but After speaking to the fund manager it seems that I must accru the tax liabilitiy in this financial year.As it is I have had to create a bank account called 'Distributions on deposit' and performed a distrinbution transaction into this. It also causes problems with determining the value of the asset given that I have accrued the distribution and have to determine an effective unit price for the asset so that everything comes out properly.In the next financial year I will have to do an asset purchase funded from the new bank account and update the unit price.If you could have some functionality to handle this situation it would be good.ThanksBryan Lovquist

Suspense account

bryanlovquist — Thu, 07 Jun 2007 21:45:21 GMT

I was thinking.If I could enter the distributions lets say as a distribution reinvestment MYSF would generate a transaction to create and debit the asset and a transaction to credit a distribution suspense account (possibly created for that asset or possibly a shared one).I would do this for each distribution recieved. This would allow me to record the purchase os assets in a timely manner.You would add a new function to MYSF (similiar to the existing one) which would allow me to identify (at EOY) all of the tax components of the total distribution for each asset. MYSF would then generate a journal to remove the funds from the suspense account and distribute as required.RegardsBryan Lovquist

Distributions

mysf — Thu, 07 Jun 2007 21:45:21 GMT

BrianWe are getting a number of requests around distributions. We will look at changes in a future releaseIf anyone has any suggestions around Distributions please postRegardsMySF

Distributions and taxable components

bryanlovquist — Sat, 26 May 2007 20:31:45 GMT

The current situation with the entry of distributions is very difficult. You have to make a choice either to not enter distributions during the course of the year or to go through a messy and difficult process in order to enter the taxable components information at the end of year.The entry of distributions for the purpose of keeping track of investments/portfolio value/asset diversification etc should be separated from the entering of the information re. tax components of a distribution.I would like to be able to enter the distributions during the course of the year and then perform some fairly simple and robust process (errors etc) at end of year to specify the tax components of eith each individual distribution or preferrably the set of distributions related to a single asset.ThanksBryan Lovquist