Demerger of a company

[Lee]

Hi Mark,

I haven't found any previous topics on demerger of a company so hope you can clarify.

I had 4589 shares in a company. It demerged in May 2011 and gave us 1530 shares in a sub company (seems to have been a 1 for 3 basis). The initial holding of 4589 shares remained intact with the parent company until it sold in December 2011. We still have the 1530 shares in the sub company.

I tried to show this as a 1 for 3 split but it reduced the number of shares from the 4589 so I've entered the 1530 shares in the sub company as a purchase for nil value at the moment and the 4589 shares as a sale.

Is this ok or is there a better way?

Lee

[Mark]

Hi Lee,

This sounds like a "spin-off". You can use the spin-off wizard to help you record this. Right mouse click on the parent investment, and choose "Investment Data / Spin Off..." and fill out the wizard, and it will record the necessary transactions for you. While you are in this dialog, press the "Help" button for a detailed description of how spin-offs are recorded.

[Lee]

That's great thanks Mark!