Support Query
How to record Managed Investments when entering in Opening Balances?
Overview
The two recommended ways to record managed investments in Simple Fund 360 are:
- Recording the Managed Investment using a Single Investment account
- Recording each investment held separately in their own account.
The Third option available includes setting up a Custom Control Account. While this includes a more complicated set up, it can provide benefits in how the Managed Investment is displayed on reports:
This article will outline how to process Option 1, allowing you to setup a managed investment account.
- Reports generated when using Option 1 and Option 2 are displayed below for comparisons.
Example
In this example, a Managed Investment (Account 74700) was recorded as at 30/06/2022.
| Cost Price |
$500,000 Contract Date: 30/06/2015 |
| Market Value | $590,000 as at 30/06/2022 |
Before continuing, ensure to create the Managed Investment (74700) account. The following article contains instructions to do so:
Recording Managed Investments in a Single Investment Account
Under this method, the Managed Investment will be recorded with 1 unit with a debit representing the accounting cost of the total investment (See Unrealised Capital Gains - Detailed Report and Investment Summary Report below)
|
Account Name |
Account Code |
Units |
DR(S) |
CR($) |
|
Managed Investment |
74700/Investment |
1 |
500,000 |
|
|
Member Data Clearing Account |
94920 |
|
|
500,000 |
Ensure to input "1" in the Units field. This 1 unit will be responsible for recording all the details related to the managed investment.
Open the more details panel of the managed investment, ensuring that the Contract Date and Settlement Date are correctly entered:
Once your Balancing entry has been entered, save the transaction by selecting Post.
Member Data Clearing Account (94920)
For Opening Balance purposes we have utilised Account 94920 - Member Data Clearing Account. However, when setting up a fund, other suspense accounts can be used. It is recommended to enter all components of the balance sheet against the same suspense account.
Under both Option 1 and Option 2 outlined above, a second transaction is required for each investment account to record the correct market value of the investment.
- This is recorded as a manual revaluation, typically posted against the same suspense account used to record the other components of the balance sheet.
For the above example, the following manual revaluation would be required:
|
Account Name |
Account Code |
Units |
DR(S) |
CR($) |
|
Managed Investment |
74700/Investment |
<blank> |
90,000 |
|
|
Member Data Clearing Account |
94920 |
|
|
90,000 |
This transaction increases the total balance of the Managed Investment to $590,000 without directly increasing the accounting cost base of the holding.
The following message will appear when posting the transaction. As the fund is recording opening balances, the circumstances mentioned in the message do not apply:
Once both transactions are posted, the final product should show similar to the following:
Whilst the Investment Reports and Detailed Operating Statement will not show a breakdown of each individual investment, they will display the total accounting cost base and market value of the managed investment.
These reports display investments recorded individually as per the instructions in this article.
The following example outlines a Managed Investment comprising of the following Investments:
-
Fixed Interest Securities
- Nab Term Deposit
-
Shares in Listed Companies
- Reece Limited
- Yellow Rock Resources Limited
-
Units in Listed Unit Trusts
- New Horizon Coal Ltd
See Also: