Note
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.
Details
An Initial Public Offering (IPO) is when a company offers shares to the public for the first time.
A prospectus containing detailed information about the company is usually provided by the company. Investors are invited to apply for the number of shares they wish to purchase in the company within a specified period.
Generally, the process involves the following transactions:
- Application of shares
- Share Allocation
- Receipt of a refund when the number of shares allocated do not match number of shares applied
Example
The fund applied for 10,000 shares and paid $20,000 with the application on 18/11/2014.
The fund was allocated 4,550 shares on 01/12/2014 and a refund of $10,900 on 04/12/2014.
The Medibank Private Limited IPO is being used as the example. The dates and numbers used are for illustration purposes only. For the exact dates and amounts, refer to the statements issued by the company that is being listed.
Application Payment
The fund paid $20,000 with the application on 18/11/2014.
Share Application Payment
| Date | Journals | Amount |
|---|---|---|
| 18/11/2014 | DR Debtors or Suspense
CR Bank |
$20,000 |
- Go to Accounting | Transaction List and select New Transaction. From the drop-down list, select Bank Statement.
- Input the transaction details and select Post.
Shares Transferred to the Fund
The fund was allocated 4,550 shares for $9,100 on 01/12/2014.
| Date | Journals | Units | Amount |
|---|---|---|---|
| 01/12/2014 | DR 77600/MPL
CR Sundry Debtors or Suspense |
4,550 | $9,100 |
- From the Transaction List scree, select New Transaction | Journal.
- Input the transaction details and select Post.
Receipt of any Refund
An amount of $10,900 was refunded to the fund on 04/12/2014.
| Date | Journals | Amount |
|---|---|---|
| 04/12/2014 | DR Bank
CR Debtors or Suspense |
$10,900 |
- From the Transaction List screen, select New Transaction | Bank Statement.
- Input the details of the refund and select Post.
Transaction Matching
If the fund is subscribed to the BGL Bank Data feed and the BGL Contract Note Service, you can match the transactions through the Transaction Matching screen instead of having to enter them manually. Refer to the Transaction Matching help for more information.