Year End Mutual Fund Dividends - Simulating Receivables for Personal Account

[Robin Chattopadhyay]

I would just enter the dividend transaction into your account using the
ex-date as the transaction date. The fact that the cash is not yet in your
brokerage account is, then, a reconciliation difference during the period
between the ex-date and the payable date.

There's another benefit to doing it this way besides matching your
1099-DIV... If you're not entering the dividend until you have it in your
brokerage account, your Balance Sheet will be understated because -- it's
especially noticeable for a mutual fund at the end of a year -- the price
of the mutual fund is reduced by the per share amount of the dividend.  So,
in your case, if you have a 0.15 USD/share dividend that went ex- on 12/31
and is payable 1/2, then your market value is short by that $0.15 if you
run a balance sheet as of 12/31.

Robin

On Mon, May 9, 2016 at 9:35 AM, Suresh Bazaj <suresh at bazaj.org> wrote:

> I am trying to figure out how to enter year end Dividends that are accrued
> on the last day of a year but deposited into the account on second (T+2)
> business day of the new year.
>
>
>
> The 1099-Div includes this as income in the prior year though the money is
> deposited in the Brokerage Money Market account in the new year.
>
>
>
> Creating Receivables account type for the few onetime transactions at the
> beginning of each year seems like an overkill.
>
>
>
> So, I created a sub-account named "Receivable" under Assets (Top Level
> Parent Account) and a sub-account "Receivable Opening Balance" under
> Equity.
>
>
>
> I then made an entry for each Dividend amount using Transfer Type Equity:
> Receivable Opening Balance.
>
>
>
> I then made a second entry on the day the Dividend was posted/deposited in
> the Brokerage Money Market account. For this I used Transfer Type Assets:
> Brokerage Money Market Checking.
>
>
>
> This seems to work. The Receivables subaccount under Assets is now Zero and
> the Dividends are in Brokerage Money Market Checking Accounts under Assets.
>
>
>
> The Receivable Opening Balance under Equity continues to show the total of
> all such Dividends.
>
>
>
> Am I on the right track?
>
>
>
> It will be pretty painful, if I have to change all this after I have
> entered
> rest of the transactions (few hundred) for rest of the year.
>
>
>
> Thanks,
>
>
>
> Suresh
>
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