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MySF Administrator
 
Group: Administrators
Last Login: Yesterday @ 5:53:34 PM
Posts: 90,
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Hello
We will investigate this and review the ATO document and post some suggested advice on this over the coming weeks. If anyone has done this already and would like to share their entries we would appreciate the input.
Regards
MySF
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Regular Member
Group: Forum Members
Last Login: 14/09/2008 4:16:48 PM
Posts: 10,
Visits: 53
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| Please advise the necessary journal entries. This is urgent as I need to finalise my 30 June 2008 accounts for audit.
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MySF Administrator
Group: Administrators
Last Login: Today @ 8:08:32 PM
Posts: 293,
Visits: 390
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Hi,
Apologies for the delay in posting a solution to this issue. The steps to processing this event are as follows:
1) Record receipt of cash in exchange for PBL units if applicable
Record the cash component received (if any) for PBL shares. This should be recorded as a sale of the PBL shares using the Manage Fund > Sell Assets > Financial Assets > .... screen, and may result in a capital gain or loss.
2) Process a rollover of the remaining PBL units to Crown Limited shares
If you opted to receive Crown shares in this transaction then you should record the rollover using Housekeeping > Utilities > Scrip for Scrip rollover. Note that this will include the 'rollover relief' as the new units retain the purchase date of the original units for the purposes of determining capital gain discount eligibility if these shares are sold later.
3/i) Record a return of capital of $3.70 per unit for Crown shares
Before proceeding with this step please ensure that you have a "Clearing" bank account set up.
Go to the Housekeeping > Utilities > Capital Repayment screen and record a capital repayment of $3.70 per unit to the "Clearing" bank account.
3/ii) Record a purchase of CMH shares for $3.70 per unit
Use the Manage Fund > Add or Manage Assets > Financial Assets > ... screen to record a purchase of CMH at $3.70 per unit on the 12/12/2007. Please make sure that you select the Clearing bank account as the account to use to generate this transaction. After the transaction is processed you should find that the clearing account balance is back to zero.
Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 14/09/2008 4:16:48 PM
Posts: 10,
Visits: 53
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| I have followed all the above steps and have come up with one problem. After completing all these steps, Crown shows a change in market value equal to the number of shares held by $3.70. Logically there should be no change in market value. Is there any way to fix this anomaly?
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MySF Administrator
Group: Administrators
Last Login: Today @ 8:08:32 PM
Posts: 293,
Visits: 390
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HI,
You can change the market value of any asset for any date (on which the asset is owned) via the Housekeeping > Asset Revaluation Table screen. On this screen you can also revalue all listed financial assets for a range of dates all at once using the 'Revalue All Financial Assets' link in the bottom left hand corner.
CMH shares were revalued to $3.70 per unit because this is the price that you paid for them and the software assumes, for the purposes of establishing an initial value as well as cost, that all assets are bought at market value.
Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 14/09/2008 4:16:48 PM
Posts: 10,
Visits: 53
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| I think you misunderstand the problem. Upon carrying out the transactions, and without doing anything else including any asset revaluations, I created a Change in Market Value report. Crown (not CMH) showed a reduction in market value of $3.70 by the number of shares held. Logically there should be no change in market value of Crown shares as the same number of shares are held, only their cost base has been reduced by $3.70.
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MySF Administrator
Group: Administrators
Last Login: Today @ 8:08:32 PM
Posts: 293,
Visits: 390
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Hi,
Thank you for clarifying, i had indeed misunderstood the original post.
From this information it looks like the capital return step not only reduces the cost base of the asset, but also its market value. This is incorrect, although not a serious problem, so we will fix it in the next update.
Thank you for letting us know about this issue.
Regards,
MySF
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