dwg1957
commented
3 years ago To provide a very current example.
I have a demerger to process, it is partially being "funded" though a return of capital on owned shared. I have 29 lots to manage - lot matching is a legal requirement for most share transactions here. So I need to reduce the cost base of each lot and by extension each share in the lot. Each lot has a different cost basis.
Just to add to the processing the shares in the demerged company are deemed to have been purchased on the date you purchased the original shares on.
To use the original purchase date on the new shares would stuff up your history, but it needs to be reflected in reporting - especially cost basis and capital gains so I am thinking these sort of reports should be able to use the tax date rather than the entry date.
Today there is no effective way to enter a Return of Capital in Moneydance.
In accounting these are handled as an entry that decreases the cost base of your investment and credits the monies received to something like a bank account, simple enough as a set of books shows totals only.
To manage investments these need to be handled at the share level, since transactions can be bought and sold at the lot or part of lot level, in accounting you would do this in a separate worksheet and/or journal.
A simple example would be if you received a RoC for a security that came down to 10 cents per share, the cost base of each share that you own in that security at that date needs to be reduced by that 10 cents, and the funds received placed as a total cash amount in the Investment account.
The attached file shows this in a little more detail.
A point is that if the sign of a Return of Capital is honored then it can also handle a capital call which is the same transaction in reverse.
Return of Capital.odt