BHP S32 demerger

Hi,

How do I handle the spin off of S32 from BHP in Sharesight?

Thanks!
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  • Hi Justin,

    There is some general guidance on recording a spin off in Sharesight here:
    https://getsatisfaction.com/sharesigh...

    BHP have also published a circular to Shareholders detailing the CGT implications which can be downloaded here: http://www.bhpbilliton.com/home/inves... The relevant information begins on page 93.

    From my reading of this document the suggested treatment in the forum post linked above is valid for Australian users in this case. Note that the opening balance date that you record for the new South32 shares should match the date that you originally acquired the BHP shares, this is primarily relevant for determining whether you qualify for a CGT discount should you sell the S32 shares.
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  • This reply was removed on 2015-05-20.
    see the change log
  • Hi Scott

    I am having the same issue with S32 and cannot understand as to what numbers I put where for the adjust cost base.

    If I just enter S32 as a new holding as a zero value at the start is this really the same thing?

    thanks

    Tim
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  • Tim,

    S32 has not yet released the cost base adjustments. They are waiting on a class ruling from the ATO which should provide the necessary guidance and cost base adjustments. This should come out in the next few weeks

    In the meantime I would put in the opening day price as your cost base adjustment and buy price for S32 ($2.205). Putting in a 0 buy price will result in incorrect performance calculations

    All the above assumes Australian shareholders

    Hope that helps
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  • Sorry Andew, I am still confused. If I open my BHP holding and click on ajust cost base which spaces do I put numbers in; cost base reduction / or demerger calculator and what numbers do I enter.
    I assume I then enter a new trade for S32, is this correct?

    thanks

    tim
    • Hi Tim,

      When recording a cost base adjustment against BHP, the amount that you want to reduce the cost base by is entered as a single figure in the 'Cost Base reduction' field. The demerger calculator can be used to calculate this figure where a specified cost base reduction ratio is provided by the company. As Andrew mentioned, specific guidance for Australian investors has not yet been published, the BHP website states only that this will be made available in June 2015.

      S32 should be added as a new holding using an opening balance transaction.
    • This comment was removed on 2015-06-01.
      see the change log
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    • Hi Phillip, I just merged your question here as a topic on S32 has already been started.
      As Andrew mentioned above, specific cost base adjustment guidance has not yet been published. BHP states that they have sent out letters to investors on 1 June and will be publishing this information on their website as well.
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  • Hi Sharesight team,
    Putting together the above directions, I tried to enter South32 shares as an opening balance transaction with the opening balance date matching the date I acquired the BHP shares (9/5/14), and a price of 2.205 per share. I am getting an error message saying "we do not have price on 9 May 2014". What have I done wrong?

    Thanks
    Gillian
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  • Because it is not possible to set a CGT effective date in the opening balance would I be correct in assuming if the user wanted to get the CGT calculations correct within Sharesight then if using opening cost base for BHP the date of that transaction should be set more than 1yr ago? How would this work because:

    i) S32 didn't exist a year ago ?
    ii) as far as I can see I can only see cost base of my BHP holding as at now, rather than at a date in the past (prior to transactions I've had in the last year)
    • Hi Darren, you can still enter a buy/ opening balance of S32 as a year ago, there is just not going to be any price movement before it's actually listed.

      To find the BHP cost base as at a particular date, you can check Historical cost report. Set the period end date as the date you want, you will get the cost base balance.

      Hope that answers your question!
    • Sorry Darren, I just realised that you wouldn't be able to use the Historical cost report if you don't have BHP trading history in Sharesight (only a recent opening balance). In that case, you'd need to go back to your trading record to calculate the cost base on a date prior to your opening balance date.
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  • 1
    Ok this is how I ended up tackling this. As we know the cost allocation to South 32 is now allocated at 7.1% of the value of the cost base of BHP as at 25 May 2015. Letter to BHP http://www.bhpbilliton.com/home/inves...

    Bottom line you have to calculate your cost base but in ShareSight this is relatively simple

    First is run an unrealised capital gains report in the portfolio. The All Trades Report will not allocate the cost base of any sales previously made - So all Trades may work if you only bought the stock. The advantage of Unrealised Capital Gains is will automatically include Bonus Issues and adjust the quantity etc.

    You may need to sort this by both company and date. (a sidebar suggestion for Sharesight is to sort by company and date) once you have this dump to a spreadsheet and setup a column for 7.1% of the cost base and calculate and sum. The total is the number that goes into the Adjust Cost Base Adjustment as a total amount in your BHP Stock.

    Leave the Demerger Calculator alone as the Quantity of shares on hand does not change. I'd suggest a comment a such as South 32 Demerger and you can upload a PDF or your spreadsheet as proof for your record keeping.

    At this point BHP is done now for S32..

    If you've only got say less than 4 lines to enter you may choose to do this manually - more than that I'd do an import. So you need to setup a CSV File to import from.

    You can cut and paste the spreadsheet so you can import it as a new share. A couple of tips on creating an import file.

    - Make sure the dates are in the format dd/mm/yyyy (generally you'll have to change the format for this. If you only have YY at the end the the date will be dd/mm/00yy which is not want you want as you are back in the first century
    - Code will be S32
    - Market will be ASX
    - Quantity you can paste from the spreadsheet, try paste special - Value (aka no formats as you don't want the comma's etc)
    - Price in dollars (just divide the capital for S32 (the 7.1%) by quantity - ShareSight will import up to 6 decimal places) again Paste Special value as you don't want $ etc a useful formula in excel is =Round(S32CostBase/QuanityOnHand,6) which will give you 6 decimal places rounded
    - Brokerage = 0
    - Transaction is "BUY" for each line - regardless of what it was
    - Exchange is 1 (You will have to manually match this in the import process to "Exchange Rate")
    - Currency is set to "AUD" again you will have to manually match this to "Brokerage Currency" in the import
    - Put in a suitable comment such as "South 32 Demerger"

    Complete the import and you're done

    Cheers

    Mike
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  • It's too hard? Like I said should be part of automation. What if I had 50 lines of trade.
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    • Same here from professional experience over 20 years in Australian market. Not the same as NZ as NZ doesn't have CGT. Especially when it includes indexation, discount option, makes a difference.
    • There seems to be some confusion here. Calculating and recording your BHP cost base adjustment in Sharesight is straightforward and does not require a spreadsheet or multiple adjustments.

      1. In your BHP holding, click on enter a new trade or adjustment, and select 'Adjust Cost Base'.
      2. Set the date to 24 May 2015
      3. Use the demerger calculator to work out the total adjustment amount, in this case the adjustment ratio provided by BHP is 92.9 : 7.1
      4. Enter the calculated amount into the cost base reduction field (you can click the calculated figure to populate the above field automatically). Click 'Save'

      The Adjust cost base transaction adjusts the cost base of all parcels of shares in the prescribed ratio. You only need to record a single adjustment for your holding regardless of the number of trades you have.
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  • The system should do a cost adjustment at platform level. Not by the user
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