Holding account for a dividend re-investment plan
Holding account for a dividend reinvestment plan
The following article illustrates how you can process a dividend, where a dividend re-investment plan is in place, and a small amount is left over that is not sufficient to purchase an additional share, and the amount is held in a holding account on the Superfund's behalf.
The event is processed in two seperate parts, i.e. merely creating what has really transpired.
The first part involves the dividend payment and the second part the purchase of the additional shares.
- Open a "dummy" bank account in SuperFund to cater for the DRP transaction. From the Assets menu, point to Accounts and click Bank Accounts. In the "Bank Accounts" window, click New and create the "dummy" bank account using an unused bank account number in HandiLedger.
- Prior to processing the DRP transaction the "dummy" bank account needs to be annotated as the default bank account. In the "Bank Accounts" window, highlight the newly created bank account and click the Default.
- The SMSF receives a notional dividend from the company on 1 January 2012 of $700. The dividend has be included in assessable income and needs to be accounted for accordingly.
- The 208 shares at a price of $3.35 each, that has been assigned by the Holding company needs to be processed. From the Assets menu, point to Financial Investments and click Shares in Listed Companies. In the "Shares in Listed Companies" window, click New.
- Now that the transaction has been processed the default bank account needs to revert back to the "actual" bank account. From the Assets menu. point to Accounts and click Bank Accounts. In the "Bank Accounts" window, highlight the actual bank account and click Default.
- This will leave a balance of $3.20 in the Holding Account for DRP's.
Program and version
SuperFund, all versions