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Junior Member
Group: Forum Members
Last Login: 13/12/2008 4:05:17 AM
Posts: 4,
Visits: 35
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| I have encountered a problem using the year end wizard where the revaluation losses on segregated assets are bundled together with other income and allocated across my account and my wife's account. Both accounts are in accumulation mode. However, I have segregated my shares in anticipation of moving to pension mode. I had expected that any revaluation losses would also be segregated. Is there a way to achieve this? Your guidance would be much appreciated. Regards, Jim
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MySF Administrator
Group: Administrators
Last Login: Yesterday @ 8:08:32 PM
Posts: 293,
Visits: 390
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Hi,
We are currently reviewing the year end process and the way in which realised and unrealised capital losses are treated.
The allocation you expected to see is what should happen and we will take that into account when testing the changes being implemented.
Regards,
MySF
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Junior Member
Group: Forum Members
Last Login: 13/12/2008 4:05:17 AM
Posts: 4,
Visits: 35
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Thank you. I look forward to hearing the results of your testing.
Regards,
Jim
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Junior Member
Group: Forum Members
Last Login: 13/12/2008 4:05:17 AM
Posts: 4,
Visits: 35
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| To try and better understand this issue, I have rerun the year end process and find that the reduction in value of my shares is not reflected in my member account. Is this correct? I had expected that member accounts would be adjusted to reflect the valuations at reporting time. By the way, is there any progress on my initial problem? Regards, Jim
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MySF Administrator
Group: Administrators
Last Login: Yesterday @ 8:08:32 PM
Posts: 293,
Visits: 390
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Hi,
The current version of MySF Manager will do one of two things. First, it can carry forward the amount of loss due to a fall in asset values. Second, it can allocate the drop in value to members' equity. The approach depends on the setting used under File > Settings > Carried Forward Losses.
After several consultations and feedback from groups of advising accountants we believe that the first option is incorrect. This means that unrealised losses (falls in market value of investments) must be reflected in members' equity accounts. However realised losses (losses on investments sold) can and may be carried forward to the next financial year, where these losses may be used to offset against gains made in that year. In the latter case the losses are not reflected in members' equity and are instead carried forward as a contra-liability.
(It is important to point out at this time that it is not possible for realised losses to be carried forward and also be reflected in the members' account. This can be tested by attempting to write the T-account entries for this event, as the entries j
just do not add up.)
We are currently working on a new year end process which addresses all of these issues. Unrealised gains and losses from segregated assets are segregated to the relevant member and realised losses are treated according to user choice.
We decided to provide a choice between carry forward losses or post losses against equity as there is a split of opinion among accountants (and auditors) about the correct approach. Using one option to the exclusion of the other would have ineviatbly caused problems for clients who disagree with the decision taken.
Regards,
MySF
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