Overview
The following article will cover how to record Scrip-for-Scrip rollover with manual journals.
Note: Recording Contract / Settlement Dates with Manual Journals
Please note that processing corporate actions manually requires specific date details to be accurately recorded within the More Details section of transactions. This is especially important when processing corporate actions involving multiple parcels.
As the Corporate Actions screen carries over the necessary details automatically, we strongly recommend using this screen for events including scrip-for-scrip rollovers.
For more complex cases, processing a manual journal may be required, which can include processing a rollover into multiple different investment accounts. The following instructions outline how to process this rollover in manual transactions without triggering unwanted CGT events.
Instructions
Important - 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.
The required information to process this manual journal include the following:
- Cost base of the original investment that will be reduced to 0.
- Market Value of the shares in the new investment.
- Cash Proceeds amount related to acquiring these new shares.
If processing a rollover into more than 1 new investment account, you will require the Unit Holding and Cost Base details to be recorded in each investment account.
| From the Main Toolbar, go to Accounting | |
| Select Transaction List |
Select New Transaction > Journal, then create a transaction similar to the image below:
Click the above image to expand.
This transaction uses the following details:
| Item | Amount |
|---|---|
Cost Base of Old Security |
$1000 |
Market Value of Shares Received |
$1200 |
Cash Proceeds |
$300 |
Cost Base associated with Cash Proceeds |
Cash Proceeds / |
Cost Base to be applied to New Security |
Cost Base of Old Security - Cost Base associated with Cash Proceeds |
Capital Gain from Cash Proceeds |
Cash Proceeds - Cost Base associated with Cash Proceeds |
- CR Old Security for the total Cost Base + Capital Gain from Cash Proceeds = CR $1100
- DR New Security for the Cost Base not associated to the Cash Proceeds = DR $800
- DR Bank for Cash Proceeds = DR $300
Ensure the Contract / Settlement Date details are correct in the More Details section for the investment:
Click the above image to expand.
The resulting transaction will record the Capital Gain from Cash Proceeds correctly, automatically applying it to account 24700 (Changes in Market Values of Investments):
Scrip-for-Scrip Rollovers with Multiple Parcels
This transaction can be altered to record a rollover into multiple investment accounts by simply adding an additional line and splitting the Units + Cost base of the New Security.
Ensure to enter the Contract / Settlement Date under the More Details section for each individual parcel:
Click the above image to expand.
Important: Ensure the "More Details" sections are correct.
It is vital that the information recorded in the "More Details" section is correct as these details are used to determine which parcel is selected for disposals and the resulting CGT events.
Incorrectly entering details could result in incorrect CGT treatment, wrong parcels being selected for disposal, or issues selecting parcels due to incorrect dates.