National Australia Bank / Clydesdale Demerger 2016

Legacy KB ID: 5402

Question

How do I process the National Australia Bank Demerger from the Clydesdale and Yorkshire Banking Group (CYBG) in Reckon Accounts Personal range?

Answer

Use the Corporate Securities Spinoff transaction type.

The Issue.

Before commencing, users should consult the documentation sent them by the National Australia Bank.  For tax treatment purposes please refer to your Accountant.

A new entity called the Clydesdale and Yorkshire Banking Group was created out of the assets of the National Australia Bank.  After the demerger, the total cost base of your shareholdings stays the same.

The relevant information for the demerger are:

Date:  8/2/2016

New Entity:  Clydesdale and Yorkshire Banking Group (ASX Code: CYB)

Entitlement:  1 CYB share for every 4 NAB shares (ratio: 0.25)

Cost Base of CYB shares: $4.01 per share

This example will use 1000 shares of NAB acquired in a single purchase at the cost of $25.01.

CYB entitlement is 250 shares.

The cost Base of NAB shares will be reduced by 250 x 4.01 = 1.002.50.

The original purchase amount and price will be reduced by this amount:

Purchase Amount $24,007.50

Adjusted Price per share:  24.00750,

In Reckon Accounts Personal:

1. Under Investing in the left hand pane, click on your Portfolio Name and then on Enter Transactions;

2. Select transaction type: Corporate Securities Spin-Off

3. Complete the form:

   1. Transaction Date:  8/2/2016

   2. Security Name:  National Australia Bank

   3. New Company:  Clydesdale & Yorkshire Banking Group

   4. New Shares issues (per old share):  0.25

   5. Cost per old share:  24.0075

   6. Cost per new share:  4.01

4. Enter/Done

You will see 2 transactions generated in the Register:

1. Return of Capital for NAB of 1002.50

2. Share purchase for CYB of 1002.50

On Portfolio Summary screens the Cost Base of NAB shares is adjusted to a Price of 24.0075 and a Value of $24,007.50.

To complete the process, configure your new share:

1. Right-click the Clydesdale share and select Edit Security;

2. In the Symbol field, enter the ASX code:  CYB;

3. In Asset Class Single, change the selection to Australian Stocks;

4. Click OK to save and close.

You can now update your share prices for the latest updates.

Need more help?

Ask the Reckon Community at: https://community.reckon.com/reckon.