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How do I enter demerger details of Essar Port?

edited May 2013 in General
The details are as under:

Originally, We had 5000 shares of Essar Shipping Ltd., acquistion cost is Rs. 550,000/- on 25/05/2011 Composite Scheme of arrangement between Essar Shipping Port & Logistics Ltd, Essar Port & Terminal Ltd, Essar International Ltd and Essar Shipping Ltd. They issue us shares as under:

01.    Essar Port Ltd   3333 shares  
02.    Essar Shipping Ltd 1666 shares

How do I enter Demerger Record?

Comments

  • Follow the steps below:

    1) Right click the stock name 'Essar Port' and select Other Transactions->Add Stock D'Merger Details
    2) Enter effective date of demerger
    3) You will notice the default stock as Essar Port with 5000 quantity. Change the quantity here as 3333. The Effective purchase date will remain blank here. Change the proportionate amount based on the scheme of arrangement for Essar Port.
    4) Hit enter and fill the details on the second row for Essar Shipping. Enter the effective purchase date of Essar Shipping. It should be the same as original purchase date of Essar Port. Enter the quantity as 1666, select the stock as 'Essar Shipping' and enter the propotionate amount as per the scheme of arrangement.

    The total purchase amount for both the stocks should be equal to the original purchase amount of Essar Port for 5000 shares. Effective date of purchase is used for capital gains calculation only and as per IT rule, it should be the same as the orinial purchase date of the parent company.
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