Users may have accidentally entered incorrect details for investments when inputting the opening balance and only to realise in a later financial year. This article provides instructions as to how to update the incorrect opening balance for an investment.
1. Reverse create entries period by period back to the financial year immediately after the opening balance period.
By reversing create entries, previous transactions can be updated without further effects on tax calculation and profit/loss allocation for future periods.
2. Delete transactions for any disposals of the relevant investment in the corresponding financial period of step 1 where applicable.
By deleting future disposal transactions, the system allows the cost base of an investment to be updated. Please note investment detail fields will be greyed out, disallowing changes to be made if there are any future disposal transactions.
Delete button will only be activated when a transaction has been selected.
3. Reopen the prior period by period back to the financial year of the opening balance period and repeat steps 1 & 2 above correspondingly.
4. Change the Financial Year to the opening balance period through the Fund Details.
Ensure to press after changing the financial year,
5. When in the opening balance period, update the investment with relevant changes.
Search for the opening balance transaction and update Investment units, original purchase price or contract date (from More Details panel).
Also check transaction input for further details.
6. Where the original value of the investment has been updated, you will also need to adjust correspondingly the revaluation journal to reflect the correct market value.
The procedure of updating revalution journal is similar to that in step 4.
For example, in step 4, if the original purchase price has been increased by $5,000, then in the revaluation journal, the investment needs to be adjusted down by $5,000 correspondingly, provided the market value was correct and would thus remain unchanged.
Also check Opening Balance for further details.
7. Generate a Statement of Financial Position under Reports for the opening balance period to make sure it is balanced.
8. Update the financial period from Fund Details and re-create entries where relevant.
Note: Create entries is NOT required for entering opening balance.