Investment Portfolio Question: Capital Raising/SPP

Christopher Singley csingley at gmail.com
Sat Jan 4 04:49:26 EST 2014


N.B. the example you're looking at is from the perspective of the company,
not the investor.

The investor can just set up 2 asset accounts - 1 for the investment, and
one for a receivable from the investee company.  Debit these two, credit
cash.  Then when the oversub is returned, debit cash to clear the rcvbl.

That's assuming you know the split between subscription & oversubscription
at the time you book the JE.  If not, you can just use a single asset
account (say the investment), book all the cash in there, then book part of
it back out to cash when the oversub is kicked back.  I don't prefer this,
though, because it complicates book-to-tax adjustments... looks like you're
getting a return of capital, which is not the substance of the
transaction.  Better to keep the asset account nice & clean, aligned with
what's going to be reported on tax forms - so split it out into investment
(tax significance) and a receivable for oversub (no tax significance).
Better accounting IMO.


On Sat, Jan 4, 2014 at 7:53 AM, PeterO <petero at fotodomain.com> wrote:

> Thanks David, but it looks that I wasn't explaining myself clearly. I was
> looking for an answer on how to treat an over-subscription. Anyway, I have
> found a bit of info that is helpful, here it is:
> <
> http://gnucash.1415818.n4.nabble.com/file/n4666834/Screen_Shot_2014-01-04_at_10.49.07_am.png
> >
>
>
>
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