Your MYOB software isn't specifically designed to track the buying and selling of shares, but it's flexible enough to be customised for this purpose. We'll step you through one method you can use to ...
Updated 9 years ago
Version 1.0
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Julie_A_C DuncanS SupportNoteGuy
OK, after referring to your notes above, Julie and Duncan, and a bit of email to-and-fro with my accountant, below is the method I've come up with. I would appreciate if you could run your eye over it and let me know if you spot any issues, before I start to implement. No rush - I appreciate this is the silly season after all.
Firstly, my accountant confirms that I am NOT a Trader, and I therefore don't need a Cost Of Sales account ("‘Cost Of Sales’ usually refers to the allocation of opening stock at the beginning of the financial year plus purchases during the year less closing stock at the end of the year of items purchased for resale against sales made during the year. This would not apply to shares unless you trade in shares as a business.")
Proposed Method
1) Equities should be coded to an Asset category – in my case, Non-Current assets as I am a long-term investor – where they will remain until I sell, and any profit/loss on disposal is transferred to the P&L Statement. For each equity purchased, create a separate account under "Other Assets" (1-2000), eg:
1-2400 Rio Tinto
1-2401 Wesfarmers
1-2402 AMP
etc.
When you run reports, these amounts will not be shown in the P&L, but in the Balance Sheet (which shows assets, liabilities and equity).
2) Create three accounts under "Other Income" (8-0000):
8-2000 Franked Dividends
8-2010 Unfranked Dividends
8-2020 Other Income Distributions - this is for distributions from ETFs, managed funds etc, rather than from shares. Accountant will also need the year end summaries which are sent out by these funds which give a breakup of the various components of the distributions, ie. capital gains, dividends, interest, non-taxable, foreign income etc.
(Imputation credits are worked out at the time of the tax calculation – as they are not physically received in cash, they are not included in the accounts.)
3) Record equity purchases under the relevant Other Asset account, using the Memo field to note the purchase, eg. "Rio Tinto 65 @ $60.54"
There is no need to list the brokerage on a separate line, it can just be included in the purchase transaction (though it may be listed separately if desired).
That's as far as I've got so far - there were no equity sales during FY2017 so for the time being I don't need to account for any, but I will need to get onto that in due course.
Does the above method look OK?