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Junior Member
Group: Forum Members
Last Login: 21/04/2010 3:28:12 PM
Posts: 6,
Visits: 18
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| This year end report may be wrong. 2009 is the first year end I have completed. My opening balances were loaded with the Adjusted cost base as reported by my previous fy returns and the asset were added with the original purchase price and aquisition costs. When I review the year end report for Total change of assets from cost base, the start values are the Original Purchase price etc - any cost base journal adjustments during the year due to distributions etc. I expected the start values to be the Opening Balances - any cost base journal adjustments during the year due to distributions etc.
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MySF Administrator
Group: Administrators
Last Login: 17/05/2010 6:31:15 PM
Posts: 464,
Visits: 632
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Hi,
The two numbers (cost base at start of year x number of units owned at start of year and the opening balance posted) should be the same. The opening balance for an asset should be its cost base, which in turn should be what is entered when the asset is added.
For example, let's assume that there was a purchase of 200 units of XYZ for $10 each in 2004 and there was a $0.30 per unit return of capital in 2006. Additionally, 50 units of XYZ were sold in early 2007. So, the current holding is 150 units at a cost base of $9.70 per unit, total of $1455. In this case, if we are setting up for FY08-09, the asset should be added as purchase price: $9.70, number of units purchased: 150, and no brokerage. The opening balance for this asset will be $1455.
Once the asset is added its cost base and account balance will change together. For example, if you process tax deferred income of $.50 per unit then the balance of the account would fall by $0.50 x number of units owned and the cost base per unit would also be lowered by $0.50. (This happens automatically in cases where such income is recorded, for example when adding a distribution which contains tax deferred income.)
This all means that if the XYZ has a market value of $15 per unit at the end of the year then the increase is the same, whether it is calculated from the balance of the account, or the cost base of the asset held in the asset record.
Adding the asset at the original (unadjusted) cost base and original number of units is not correct. That would lead to an inconsistency between the asset information and the data held in the accounts.
The setup procedure is outlined in the "Setup" pdf. We send a copy of the pdf with purchases and demo downloads (email attachments in both cases). It is also available from here.
Please let us know if you would like any additional information or assistance.
Regards,
MySF
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