Simple Fund 360 now removes many of the friction points associated with processing dividend reinvestment plans. The dashboard will alert you to which reinvestment plans have taken place during the year and provide the required calculations and data to action these where applicable to your fund's circumstances.
A dividend or distribution reinvestment is an additional purchase of units by way of dividend or distribution received from the investment to fund the purchase. Any residual dividend/distribution reinvestment balance that remains after unit purchases can be allocated to account 62550/INVESTCODE.
Dividend reinvestments will appear in the Corporate Actions screen where the fund holds units in the particular investment and where dividend reinvestments are offered by the company.
Dividend Reinvestment Plans (DRP) will not show in the Corporate Actions screen if you have the following transaction posted:
DR Bank Account
CR 23900/XXX (Dividends Received)
DR Investment Account
The transaction date has to be plus/minus a day of the DRP Corporate Action date.
For funds using bank feeds such as the BGL Bank Data Service, bank transactions loaded to the ledger will match to any cash components of DRP transactions processed through the Corporate Actions screen.
BGL does 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.
Under the Corporate Actions page, DRP will automatically appear matching relevant ASX announcements that apply to investments held by the fund. Information will be pre-filled by the system allowing users to quickly process reinvestment transactions.
In the following example, the reinvestment will consist of:
Bank of Queensland (BOQ) Ordinary Fully Paid Shares (110)
Dividend amount of $37.40 received on 27/11/2014 (franking credit of $16.03)
No Cash Balance brought forward giving a total amount for reinvestment of $37.40
3 shares purchased at a cost of $36.18
Cash Balance carried forward of $1.22 ($37.40 - $36.18)
Dividend Residual amount of $1.22 posted to account 62550/BOQ.AX
How to Process
This Dividend Reinvestment below is an example only.
- Select Investments from the Main Toolbar and click on Corporate Actions
From the Main Toolbar, select Investments. Select Corporate actions from the list.
- From the Corporate Actions screen, view the Type column. Make sure that Dividend Reinvestment Plan appears under the Type column before proceeding.
- Select Process under the Action column.
- Then system will lead users to New Corporate Action page and the Security will be automatically selected.
- Dividend Reinvestment Plan will display as the Corporate Actions Type.
- Confirm the chart account for the corporate action (e.g. 77600/BOQ.AX).
- The Ex / Balance Date (the Corporate Action Ex Date) and the Payable Date (Transaction Date) will be selected. Simple Fund 360 will create a dividend reinvestment transaction in the Transaction List Payable Date.
- The Income Type (Toggled to Dividend) and the reinvestment percentage will display. The percentage will default to 100%.
- The linked income dividend account (23900) will automatically display as well as the linked dividend residual account (62550).
- View the reinvestment transaction details. The franked amount will automatically prefill as well as the DRP price per share and number of shares allotted during the transaction. The Residual Balance C/F is the sum of: (Residual Balance B/F + [Total Amount Available - Cost of Shares Allotted]).
Note: The Residual Balance B/F is any amount sitting in account 62550/INVESTCODE.
Note: The Residual Balance C/F can be rounded down to $0 if the amount is immaterial. This amount will then be transferred to the cost base of the shares received as part of the dividend reinvestment.
- Select Foreign Income/Other Deductions + to view/input additional amounts. The Cash Received field will update depending on the reinvestment percentage displayed in step 7.
- The Corporate Action Summary will appear below. Select Process Corporate Action. The reinvestment plan event will appear as Processed in the Corporate Actions screen.
How to Delete
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.