Issue

How do I remove the cost base from a delisted security? The share balance of the investment is still showing on the Share Registry, and I cannot sell it all yet.

Background

A CGT G3 event occurs when a liquidator or administrator declares shares or financial instruments worthless. In the instance of a public company, it would also then be delisted.

Please refer to this ATO link for further details.

Class does not have full functionality to process this scenario. The steps below outline the recommended workaround.

Resolution

There are three steps required to resolve this issue:

Step 1: Clear the cost base of the investment

Step 2: Take up the capital loss incurred

Step 3: Match off the Business event and Cash In Transaction

Clear the cost base of the investment

Navigate to Fund Level > Transactions > Investment - Corporate Action > Capital Return

1. Enter the security name in the Holding Account field
2. Enter the date in the Recorded Date field
3. Enter the Payment Date
4. Enter an amount equal to the cost base at Payment Amount
5. Complete the Description

Take up the capital loss incurred

Navigate to Fund Level > Transactions > Fund Income > Realised Accounting Gain/Loss

To process this transaction, you will need an appropriate custom holding account. 

1. Enter the appropriate Custom Holding Account
2. Effective Date should match the Payment Date entered when clearing out the cost base
3. In the Gain/Loss Amount field:
    i) If no money is received, leave the field as $0.00
    ii) If money is received, enter the cash amount
4. Leave Other Capital Gain, Discountable Capital Gain and Indexed Capital Gain as $0.00
5. Enter the amount equal to the difference between Cash received and cost base of the investment at the Capital Loss field.

Match off the Business event and Cash In Transaction