Lets say you had symbol 1000 shares of symbol ABC that was split into 600 shares of DEF and 800 shares of XYZ. Assumption is that Symbol and Account currency here is the same. Just before split value of symbol ABC was 13000 and after the split value of DEF was 9000$ and value of XYZ was 4000$ (total the same 13000$). 1. From the holdings tab identify Cost Basis for symbol ABC. If possible confirm that numbers are as expected. Lets say Cost basis is 10000 (you paid 10$ per share) 2. Find price of symbol ABC for the day (or day before) for the change. Lets say price is 13$ per share. 3. For account add transaction with Date=x, TransType = SymbolTransferOut, Symbol=ABC, Qty=1000, Price=13, CostBasisOverride=10000. 4. For Account add transaction with Date=x, TransType=SymbolTransferIn, Symbol=DEF, Qty=600, Price=9000/600=15, CostBasisOverride=9000/13000*10000=6903.08 5. For account add transaction with Date=x, TransType=SymbolTransferIn, Symbol=XYZ, Qty=800,Price=4000/800=5,CostBasisOverride=4000/13000*10000=3076.92
So you removed symbol ABC and added symbols DEF and XYZ with sum of cost basis equal to original value. At the removal of symbol you made sure that price was as of that point in time and when you added new symbols, total value of new symbols was the same as day before , so no flactuation in the protfolio total value. As you can see with these transactions you simply making sure that daily total value stays the same before and after split and cost basis is as original value but proportionally split between new symbols.
If after split ABC was split into ABC and XYZ, same logic applies.
And in may cases when the stock is split between two shares their sum of price is usually higher than the original stock price. So in our example, 13000 would higher/lower as dictated by the CMP, right?
Yes, similar treatment for FV or any split. When you record the split, your goal is to make sure: 1. Original cost base stays as it was because that is how much money you invested and you want to know how much it changed. 2. At the day of the split, after symbol transfers out/in you want to have reasonable impact. That is if before split total value of the symbol(s) was 1000, you expect after split total value to stay close to 1000. If you say that value is higher after the split, then where this higher value came from - is it one day jump in capital gain? If (!) that is what happen, then no problem reporting higher value of SYmbolTransferIn than SymbolTransferOut.
Comments
1. From the holdings tab identify Cost Basis for symbol ABC. If possible confirm that numbers are as expected. Lets say Cost basis is 10000 (you paid 10$ per share)
2. Find price of symbol ABC for the day (or day before) for the change. Lets say price is 13$ per share.
3. For account add transaction with Date=x, TransType = SymbolTransferOut, Symbol=ABC, Qty=1000, Price=13, CostBasisOverride=10000.
4. For Account add transaction with Date=x, TransType=SymbolTransferIn, Symbol=DEF, Qty=600, Price=9000/600=15, CostBasisOverride=9000/13000*10000=6903.08
5. For account add transaction with Date=x, TransType=SymbolTransferIn, Symbol=XYZ, Qty=800,Price=4000/800=5,CostBasisOverride=4000/13000*10000=3076.92
So you removed symbol ABC and added symbols DEF and XYZ with sum of cost basis equal to original value. At the removal of symbol you made sure that price was as of that point in time and when you added new symbols, total value of new symbols was the same as day before , so no flactuation in the protfolio total value.
As you can see with these transactions you simply making sure that daily total value stays the same before and after split and cost basis is as original value but proportionally split between new symbols.
If after split ABC was split into ABC and XYZ, same logic applies.
When you record the split, your goal is to make sure:
1. Original cost base stays as it was because that is how much money you invested and you want to know how much it changed.
2. At the day of the split, after symbol transfers out/in you want to have reasonable impact. That is if before split total value of the symbol(s) was 1000, you expect after split total value to stay close to 1000. If you say that value is higher after the split, then where this higher value came from - is it one day jump in capital gain? If (!) that is what happen, then no problem reporting higher value of SYmbolTransferIn than SymbolTransferOut.