Support Query
How do I process a transaction for shares which have been deemed worthless or are liquidation?
Further Information
When a company is placed in liquidation or administration, company law restricts the transfer of shares in the company.
You may be able to claim a capital loss if you are:
- a shareholder and a liquidator or an administrator of a company declares in writing that they have reasonable grounds to believe there is no likelihood that shareholders will receive any further distribution for their shares
- an investor who holds a financial instrument in a company and the liquidator or administrator of the company makes a declaration in writing that the financial instrument has no value or negligible value
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.
Shares and other securities when you can choose to make a capital loss
- On the Transaction List screen create a new Journal transaction
- Enter a DR and CR $0 to the Investment account.
- On the Credit Transaction enter the disposal details. This will trigger a Capital Loss
Shares and other securities when you cannot make a capital loss
- On the Chart of Accounts screen, unselect the Asset Subject to CGT checkbox and save
- On the Transaction List screen create a new Journal transaction
- Enter a DR and CR $0 to the Investment account.
- On the Credit Transaction enter the disposal details. This will trigger an Accounting Loss (Not CGT) and post the amount to Account 24800 Changes in Market Values of Other Assets