See also:
Overview
Automated feeds are available for various wrap accounts. Refer to Wraps and Platforms for a list of supported feeds. In the event a feed is not available, use the below pages to assist in processing wrap accounts manually in Simple Fund 360.
The following guide has been produced to assist you in processing an entire Wrap Account, SMA or Managed Investments as a single line Investment to avoid re-processing the underlying Investments.
Follow the steps below to manage the creation, recording and revaluing of the account:
- Create the Investment Account/record Initial Purchase
- Year End Processing
- Record Transactions, Income and Expenses
- Record Capital Gains for Tax Purposes
- Investment Revaluation
New Investment and Purchase
In addition to the Managed Investment account, a bank account can be added for the portfolio. Refer to Bank Accounts if you have not yet added the bank account.
The recommended investment account is 74700 - Managed Investments (Australian).
- From the Chart of Accounts (Accounting > Chart of Accounts), select Add Account and select Investment. The New Investment Account screen will appear.
From the Main Toolbar, go to Accounting. Select Chart of accounts from the list. - Under the Account Class heading, select Sub Account.
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Select the Investment Type "Managed Investments - Australian". If this is an international wrap, select "Managed Investments (Overseas)".
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Attach a security to this investment. Select Create New to add the security to the list. Refer to the Securities Screen for steps. Simple Fund 360 will now produce an INVESTCODE and name (this is editable upon creation only).
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Next, select More Details to input the following information for the investment:
|
Account Option |
Explanation |
| System - More Details Label | Leave this as Unitised. |
|
SRN/HIN |
Input the SRN/HIN/Investor number for this investment. |
|
Asset subject to CGT |
By default this check box is ticked. This asset is subject to CGT upon disposal. Leave this ticked. |
|
Linked Accounts |
Displayed in this section are the linked accounts to the investment that have been created by Simple Fund 360. Select Add Link Account to add another linked account to the investment or Delete to remove a linked account. SF360 will create income, expense and liability accounts for the investment. By default, the following linked accounts are added automatically: 23800 Distribution income account 23900 Dividend income account 37500 Investment Expenses 61800 Distributions Receivable 83000 Investment Liabilities |
Once you have finished inputting the investment account information, select Save to add the investment account to the chart of accounts or Cancel to not add the account.
Initial Purchase:
If this is a new investment, record the purchase with one unit. Refer to How to Enter Investment Purchases.
Year-End Processing
Scenario: Fund holds single line investment in account 74700/BTWRAP1. At 1 July 2016 the opening balance of the investment is:
Opening Balance
1 Unit with a DR value $100,000
During the year, the following amounts were received/disposed within the managed investment:
New Additions of investment costing $5,000;
Disposals of part of the investment for $7,500, the cost base of which is $3,000.
| Account | Amount for period 01/07/2016 - 30/06/2017 |
|---|---|
| 23800/BTWRAP1 - Distributions | CR $1,000 |
| 23900/BTWRAP1 - Dividends | CR $1,500 |
| 25000/BTWRAP1 - Interest | CR $500 |
| 37500/BTWRAP1 - Investment Expenses | DR $500 |
| 24700 - Changes in Market Value | CR $4,500 (Capital Gains) |
| 60400/BTWRAP1 - Cash at Bank | DR $5,000(NET amount of disposal proceeds less purchases; includes income and expense amounts) |
| 74700/BTWRAP1 - NET Movement in Cost Base | DR $2,000 (NET amount of purchases/disposals) |
Capital Gains for tax purposes:
- Discounted (Gross) $500
- Indexed $0
- Other $200
Closing Balance
1 Unit with a DR value of $102,000
*The market value of $102,000 will need to be input in the Securities screen prior to the year end create entries at 30 June. With reference to the Unrealised Capital Gains/Losses section of the received statement, an upward/downward revaluation can be recorded via the Securities screen. This will be completed after the inputting of all transactions.
Recording Transactions, Income and Expenses
By default, the following linked accounts are added automatically when the investment is created:
23800 Distribution income account
23900 Dividend income account
37500 Investment Expenses
61800 Distributions Receivable
83000 Investment Liabilities
Note: These transactions can be added as one end of year journal:
| Transaction | Reference |
|---|---|
|
Distribution (income) $1,000 |
Refer to How to Enter a Distribution & Tax Statement. When recording distributions, Simple Fund 360 provides a More Details Panel allowing you to input addition tax information including:
|
|
Dividend (income) $1,500 |
Refer to How to Enter Dividends.
|
|
Investment Expenses $500 |
Refer to How to Record Expenses. |
|
Interest (income) $500 |
Refer to How to Enter Interest Received. |
|
Cash at Bank $5,000 |
Record as separate line item with DR to bank account. |
|
NET Movement in Cost Base $2,000 |
A cost base adjustment transaction can be used to record the NET movement. Post to account 74700/BTWRAP1 with 0 units input in the units column to record the adjustment. Refer to How to Enter an Investment Cost Base Adjustment. |
|
Changes in Market Value $4,500 |
Realised gain amount to be posted to 24700. *This will display as Other Revaluations in the operating statement. Refer to How to Reconcile SMSF Annual Return Rounding Amounts where Manual Revaluations Have Been Posted. |
Example of year end journal to record transactions:
Transaction Type is Journal and the transaction is dated at 30 June (refer to Transaction Input for further instructions):
1. Record investment income and expenses:
2. Record net purchase/disposals during the year ( A net purchase of $2,000 worth of investment in the portfolio during the period)
Note: Put units as "0" to trigger a cost base adjustment
Click on More to select the Parcel (Portfolio) previously recorded in the system
3. Record a realised gain of the portfolio (net gain of $4,500)
Record Capital Gains for Tax Purposes
Record any capital gains/losses for tax purposes to the linked distribution account 23800 as a $0 journal using the More Details Panel:
Record Capital Gains/Losses for Tax Purposes
| From the Main Toolbar, go to Accounting. |
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| Select Transaction list |
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- From the Transaction List screen, select New Transaction. From the drop down list, select Journal.
- Input the date of the transaction.
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Select the income account (23800/INVESTCODE), this will prompt Simple Fund 360 to display the More Details Panel to enter the Distribution Details.
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The capital gains / losses can be entered under the Non-Cash Capital Gain / Losses section. Click the arrow beside Non-Cash Capital Gain / Losses to display the relevant fields.
In our example, the following capital gains amounts are to be input:Capital Gains from disposals:
- Discounted (Gross) $500
- Indexed $0
- Other $200
To save the transaction you will need to post a debit and credit of $0.00.
Example
Debit Investment account $0.00
Credit account 23800/INVESTCODE $0.00
By recording the capital gains to the More Details panel of the distribution account, these amounts will be populated on the tax return and the capital gain reports. As there is $0 amount being posted to the distribution account, this will not appear in the operating statement. The tax return gets populated based on what has been recorded to the More Details panel.
- Select Save. The capital gain / losses recorded as above will appear in the CGT Schedule and in the Realised Capital Gain reports as a new line item.
Revaluation
The market value of the portfolio will need to be input in the Securities screen prior to the year end create entries at 30 June. With reference to the Unrealised Capital Gains/Losses section of the received statement, an upward/downward revaluation can be recorded via the Securities screen.
Limitations
1. Non-Cash capital gains/losses under distribution income account (23800) won't be reflected in Trial balance/ Operating statement, though the amount recorded under Non-cash capital gains/Losses will be correctly shown under Realised Capital Gains Report.
2. Buy/Sell Transactions under Managed portfolio are not recorded but only cost base (Movement of cost base) will be accounted for.
Even though buy & sell transactions were not posted some clients have made following query
- Why accounting profit/loss is not flowing through Market movement report
If the managed portfolio is setup as one asset, Simple Fund 360 won't record sales transactions but cost-base adjustment. Also realised gain will be reflected in the Operating Statement under Changes in Market Values - Other Revaluations, which is not fully accurate.
Auditor may address this issue as no accounting profit/loss is accounted for in Market movement report.