Hi! Thanks for the feedback. Let me try to answer both your and John's
questions and perhaps a few details along the way.
> Let's say there is $1000 in 100 shares in IPE account.
2000-01-01 * Bought IPE
Assets:Investments:Broker:Shares:IPE 100 IPE {10.00 USD} [2000-01-01]
@ 10.00 USD
Assets:Investments:Broker:Cash -1000.00 USD
> The fund is shutting down and returning funds to the shareholders.
> Now, I still have the same amount of shares (100) but they are only worth
> ~$500, and I got $500 back in cash.
2019-04-01 * Return of capital
Assets:Investments:Broker:Cash 500.00 USD
Assets:Investments:Broker:Shares:IPE 100 IPE { 5.00 USD} [2000-01-01]
@ 5.00 USD
Assets:Investments:Broker:Shares:IPE -100 IPE {10.00 USD} [2000-01-01]
@ 5.00 USD
Ref:
- question on SE:
https://money.stackexchange.com/questions/107906/how-to-enter-return-of-capital-in-ledger-cli
- Australian Tax Office (ATO) ruling:
https://www.ato.gov.au/law/view/document?docid=%22CLR%2FCR201834%2FNAT%2FATO%2F00001%22
First note that the numbers are simplified for the sake of example. The real
return of capital was 3.5 cents per share, as per ATO ruling. So, what
happens above:
- the first transaction shows that IPE was purchased at $10 a share.
- some background: the fund is shutting down its operations and is returning
the capital to the shareholders
- the Return of Capital transactions does two things:
- shows a return of $500 to the cash account (this is what happened in the
real world)
- shows a repricing of the original cost. One split shows a sale of all
the shares at the original price ($10) and "purchase" of the same quantity
at the new price of $5.
These are supposedly correct as, in the end, I've got $500 back. The number
of shares has not changed, I still have 100 shares in the fund. The actual
value has decreased but mainly due to the drop in the market price. And,
finally, I have the new base price for those 100 shares. It is no longer $10
but $5.
This last point is important for the potential future Capital Gains
calculation.
I would like to show this ideally in one transaction because it balances and
represents what actually happens. Technically, it should be possible (and
perhaps is but I don't know how to enter it correctly).
To answer John's questions - IPE was an equity fund on ASX, now delisted
(http://www.delisted.com.au/company/ipe-limited). They've returned all of
their capital over a few years and shut down operations.
So, technically I don't have to worry about potential capital gains but
that's beyond the scope of the original question. :)
When I try to create this second transaction in GnuCash, I'm stuck at the
following - https://imgur.com/vihbSst
<http://gnucash.1415818.n4.nabble.com/file/t377766/vihbSst.png>
The trading split is inserted automatically, due to the usage of Trading
Accounts and that throws off the balance, I suspect, but I also may be
wrong.
--
Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
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