BGL do not provide accounting or taxation advice. The following is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps.
The demerger process is a restructure of a corporation. The corporation splits its operations into two or more entities/groups. As a result of a demerger, the owners of shares in the head entity of the group (SMSF) acquire a direct interest (shares) in the demerged entity.
Process a Demerger
This Demerger is an example only.
- From the Corporate Actions screen, view the Type column. Confirm Demerger appears under the column before proceeding.
- Select Process under the Action column.
- The Head Security will be automatically selected.
- Demerger will display as the Corporate Actions Type.
- Select the account for the corporate action (for example, 77600/BHP.AX).
- The Ex / Balance Date (Corporate Action Ex Date) and the Corporate Action Date (Transaction Date) will be selected. Simple Fund 360 will create a demerger transaction in the Transaction List based on the corporate action date that was entered and parcels dated prior to the Ex / Balance date will be affected by the action.
- The Current Units on Hand for the head entity will display.
You will need to select the demerged security.
Field Explanation Select Securities The security will automatically be selected if it already exists in the fund. If it does not yet exist, select Add New Investment. Add New Investment If the fund does not have the demerged entity set up, select Add New Investment. See Investment Accounts for instructions.
Select the date to use for when the demerged security is acquired.
The demerged security will be deemed to have been acquired on the Purchase date of the original head security purchase date. The demerged security will be deemed to have been acquired on the Demerger date.
Complete the Unit Details.
Field Explanation Units in head security after demerger Input the number of units the fund will have in the head entity after the demerger. Units in demerged security The number of units the fund will receive in the demerged entity after the demerger will display.
Select which method to use for the cost base treatment.
Select this option to split the cost base using percentages. You will then need to input the following information: Head security % - % of the cost base that will apply to the head entity (remain for the original investment) Demerged security % - % of the original cost base that will form the new cost base of the demerged entity Select this option to use a dollar amount for the cost base amount per unit for the Demerged Security. You will then need to input the cost base amount per unit for the Demerged Security.
The Corporate Action Summary will detail the demerger transaction. It will display the Units on hand for each entity before and after the demerger; as well as the numerical effect on the cost base of the head entity (reduction) and demerged entity (increase). Review these details and once confirmed, select Process Corporate Action.
How to delete a demerger
If you are required to change a corporate action, you can delete and re-process the action from the Corporate Action screen.
|From the Main Toolbar, go to Investments.
|Select Corporate actions from the list.
Alternatively, you can access the Corporate Actions screen from the Transaction List:
Locate the corporate action to delete. Select the check box located next to the transaction and Delete.