How do I change Afterpay (AFY) to Afterpay Touch Group (APT)

Afterpay Holdings (AFY) recently merged with Touchcorp (TCH) and the new code is APT. Can you please advise on how to update this.
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  • Angela Thompson (Digital Marketing Manager) July 12, 2017 07:14
    Hi Michelle,

    We've written a blog post on how to handle the Afterpay (AFY) and Touchcorp (TCH) merger.



    We hope this answers your question. Let us know if you have any further questions on how to handle this corporate action within Sharesight.
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  • 1
    Thanks Michelle for this very informative and timely response.

    I held shares in TCH prior to the merger and have two small concerns with the content of the blog post:

    1) The process seems to negativey impact figures reported on the Overview tab of Sharesight.

    Assuming rollover relief (which I also think is the correct approach) I agree completely with reporting a cost base sale for TCH, as it is not a CGT event.

    This however creates what looks like a loss/or gain of value in the TCH trade for anyone who purchased TCH at a share price other than the prevailing price on t he date the scheme was implements—$1.67. And this difference is reflected in performance reports and on the "Overview" tab.

    I found that entering the Market Value of new APT shares to match the initial cost base value of TCH shares sorted this out a bit better. But then it looks like all the profit I made in TCH shares occurred on the day they were replaced by APT shares.

    e.g. My cost base price for TCH shares was $1.14
    On 6 July TCH traded at $1.67
    Recording, for GST rollover relief purposes, a cost base sale and zero capital gain makes it look like TCH made no money whereas it really made 46% profit.

    Subsequently replacing my TCH shares with APT shares at the prevailing market value of $3.15 per share results in the system now reporting a 3% loss in value whereas my real gain since initial purchase of TCH should be ($3.04*0.64)/$1.14 -> 71%.

    What I need is a way for Sharesight to correctly see my TCH disposal as a zero CGT event but still report the performance correctly for my new APT shares. i.e to take into consideration the previous TCH gains.

    2) In the example calculation for "No Rollover Relief" I believe the assumed sale price for TCH shares should be 0.64 x $3.15. Otherwise there is a black hole swallowing about $11k.

    The example says the TCH shares were sold for $31,500 and resulted in only $21,600 in APT shares.

    IMHO I believe $21600 in TCH shares became $21,600 in APT shares.
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  • Hi slymeat,

    You've raised good points that relate to a dilemma we've often faced when dealing with these types of corporate actions - mergers, demergers, takeovers etc. When it comes to accounting for these events, within the current Sharesight functionality, we write these blog posts with the aim of providing as much of a balance, between tax outcomes and performance reporting, as possible. As evidenced by some of your points, unfortunately at times there is a trade-off between the two.

    As an FYI, we are currently developing a solution to tackle this, and hope to release something shortly.

    With that said, we generally steer toward correct tax reporting for the original holding, to ensure there is no tax incurred when running the CGT report within Sharesight. As you've noticed, this subsequently impacts the actual 'performance' of your Touchcorp holding. This is a step where you can either sell off for a zero-CGT outcome, or sell at the prevailing market price to reflect true performance, and make a manual adjustment at tax time when running the CGT report.

    As you've also noted, currently there is no facility to translate the 'performance ' from the original holding to the new - this makes sense from the perspective of the two being separate companies, although also ties back to the paragraph above in that the true 'performance' of Touchcorp is not reflected when following our steps. You can definitely enter a date for the new APT holding that matches your original purchase date for TCH, although you'll find the prices for APT will not stretch back that far.

    In terms of reflecting the performance of your APT holding, from the Implementation date forward - in this instance it would be best to use an 'Opening Balance' transaction to start, as you can enter your carried-over cost-base, in addition to a 'Market Value'. The cost-base is used in tax reports, whereas the Market Value is used for performance reporting purposes, to reflect the performance of your holding in the new company.

    Finally, thanks for pointing out that mistake for the 'No Rollover Relief' section! We'll correct that part - instead of selling at the APT market price, enter a 'Sell' at a price equal to '0.64 * $3.15'. Thanks for pointing that one out!

    Again, as mentioned earlier, we're currently working on a solution to make accounting for these types of events, within Sharesight, a lot easier! We'll keep you updated as we progress on that front.

    Cheers,

    Josh
    • Thanks Josh, that reply is above and beyond and is part of what I love about Sharesight. You are a very professional mob and I appreciate your responsiveness.

      I am looking forward to the solution that is planned; that will be a real help for members if implemented well.

      I agree that the CGT calculation is the most important thing to get right and I only raised my concerns as I have some goals set for myself regarding annual return. The way things work at the moment obfuscates performance somewhat but I can live with that and can alter the final result to reflect reality.

      To-date I am extremely happy with Sharesight, I recently did my 2017 tax return and Sharesight highlighted some CGT calcs I had incorrectly done and also showed me how to correctly account for some foreign income. At the same time it confirmed that I had treated a capital return correctly. These few corrections almost paid for my annual subscription right there.
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  • I am quite the newbie and a bit confused by the process...am I supposed to open a free account to account for touchcorp becoming Afterpay touch? And if so what do I need to do to incorporate this into my existing portfolio? A very confused
    Grace
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  • Hi Grace,

    For those who are entitled and opt for rollover relief on your Afterpay or Touchcorp shares the process has become a whole lot simpler since that blog was written.

    We've invested a lot of effort in developing a merger feature that does the leg work for you.

    To complete the merger.

    1. Open your TCH holding (or AFY - whichever you hold)
    2. Click the Holding Settings - bottom right of the screen
    3. Select Merge this holding
    4. In the screen that displays enter:

    Date of Merger: 6th July 2017
    New Holding: APT.ASX
    Quantity: The number of APT shares you are entitled to

    5. Hit save and your done.

    We work out everything for you.

    You can read more about our new merger feature here:
    https://help.sharesight.com/mergers/

    Regards
    Ben
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