Ah, I have the luxury of being a private investor in a smallish way, so don’t have an accounting system to deal with, and I’m not an accountant, but I’m sure an accountant will be able to figure out what gets debited and what gets credited. Sorry I can’t be of more help. Good to get the value in though! I also see where WDS shares went up substantially today.
Essentially BHP has given us a fully franked dividend. This needs to be declared, the same way that regular dividends are.
The dividend has been used to “purchase” WDS shares, at the market price at COB on 31 May. So yes, we did pay for these WDS shares.
Am I understanding this correctly?
1 Like
So page 18 here actually clears this up:
Entering with the cost base as the market value rather than as $0 will ensure accurate tracking of unrealised performance, and also further reporting if/when the shares are disposed of.
So if you don’t own WDS already, enter these as an opening balance in Sharesight, this will ensure the cost base is what WDS/BHP is outlining in their official documents.
If WDS is already owned, the only way to enter this in Sharesight is as a buy so that the cost base will adjust accordingly.
Anything that is entered into your accounting system you can delete. So in this case, you can delete the transactions if you don’t need this.
With the dividend, BHP/WDS is suggesting that you include this in income reporting:
With regards to point 2, if you already own WDS I’m assuming that your cost base would change, as they are advising that this is entered as market value? It might be something worth consulting an accountant with in this instance.
I had existing WPL which got changed automatically to WDS by SS and now the WDS balance is wrong also WPL no longer available. How do we fix this?
When in a portfolio, with no WPL or WDS, this solution works fine. But not for portfolios with either WPL and/or WDS.
Don’t know how to clean up this.
Under WDS (with old WPL balance), I’ve added new shares as “buy”, unit price $29.76 and number of shares rounded by dropping decimals to match with broker balance.
Question: Is BHP in-specie dividend not going to be automatically posted in SS? Why do we need to enter?
I suggest the BHP in specie dividend should be treated like a DRP. But instead of receiving BHP shares, you get WDS.
For example:
Under BHP, enter a new Dividend of say $7000 franked and $3000 credit.
Under WDS, enter a New Trade. Enter the Quantity of WDS allocated.
The unit/share price of WDS is then calculated by dividing the BHP franked dividend by the WDS share allocation.
In this case you will end up with a common Total value for BHP Dividend and WDS shares
My problem with these instructions is that then I end up with a BHP dividend going into my cash account. How can I stop this from happening as there is obviously no cash involved?
As has been stated “Obviously there is no cash involved” and that is where the problem lies for those who are not accountants.
What you have to think about is that BHP took the cash and bought some Woodside shares for you.
So just enter the dividend, as you normally would, and then enter the buy, as you normally would. The same $ & ¢ amount is used in each case, one off-sets the other.
It should be noted that the in-specie dividend and all instructions in this thread refer to how to handle and enter this into Sharesight strictly. For how to treat this in any other terms should be consulted with a tax specialist on an individual basis 
@here
Upon further advice about this demerger, we have had to update our instructions. This only applies to Australian portfolios.
You will need to edit your WDS trade if you entered these as an opening balance. All you will need to do is change the trade type from an opening balance to a buy trade, with the market price of $29.76 remains the same.
The reason for this is that Sharesight treats an opening balance trade as being held for more than 12 months, meaning that the CGT discount will apply when the shares are sold.
As this discount does not apply to the newly WDS shares, changing to a buy trade will ensure the discount is not applied until the share is held for more than 12 months. The date and in-specie dividend handling will remain the same.
Once changed, if you have a cash account that syncs with your trades you may need to delete this transaction from your cash account. This only affects Australian portfolios, as this applies to the Australian CGT report.
Thanks for understanding, these mergers can get a bit complicated at times! 
1 Like
Jack, I understand how to enter the In Specie Woodside entitlement shares as a buy, as per your updated instructions (and thank you for that), but how and where do we allocate the franking credits into SS that come with the in-specie dividend. Many thanks in advance for your help.
@Jack_Sharesight Thanks Jack as always for your help. Not always simple.
I post to Xero from SS. SS posts divs to my selected bank ac (and to franking asset/income accounts).
I thought about taking this approach:
- Not post to Xero for both the BHP Div and WPL Buy
- Raise a manual journal in Xero (#'s are illustrative, actuals come off the BHP statements)
Dr Investment (Being WPL buy) 70
Dr Franking asset 30
Cr Franked Div 70
Cr Franking credit 30
On further consideration I’ve decided it’s better to post both to Xero and just match off the two offsetting cash legs in the bank accounts (one for the BHP div and the other for the WPL buy) against a suspense account. This will net the amounts to zero and all amounts will be correctly linked from SS to Xero.
Importantly - I needed to change the xero settings in SS such that the trade and the div both post to the same bank ac. After making the change I then post the trade from SS, then change the Xero trade bank ac in SS back to the online bank ac!]
So still manually enter the dividend for BHP, the breakdowns can be found below:
No need to raise a manual journal in Xero. I use Xero across a number of portfolios, 4 of which contained both WDS and BHP shares. This is how I worked it:
- In SS enter a buy transaction for WDS for the 1st June for the number of shares provided at a buy price of $29.76 (the closing price the previous day). No brokerage of course! Note down the total value of the transaction.
- In SS enter a dividend transaction for BHP dated 1st June for the total amount of the value of the WDS shares received. Enter it all in the 'franked dividend field. You should get an automatice calculation of the franking credit. If not, work it out and add it manually.
- In Xero go to your bank account and to the account transactions screen. Check to make sure that the WDS buy transaction is dated for 1st June and hasn’t automatically set the date for 3rd June because of normal settlement terms. If so, change it manually.
- Select both the buy and the dividend transactions and manually reconcile them. This makes it look like the dividend was actualy paid in cash and the shares in WDS were bought from the proceeds.
Finish!
1 Like
thanks v much @Muse. Makes sense and I will take this approach.
Great to have another multi-portfolio SS-Xero user posting here!
1 Like
In Future Income report, BHP “In specie dividend eligible” appears now. I notice reasonable difference in dollars.
Also for BHP, future income reports show BHP in specie dividend for personal portfolios but not for SMSF. Is there any specific reason? Thanks
I just notice it shows under “WDS” where as actual dividend statement shows as BHP. For your clairty and advice. Thanks
Dividend is paid by BHP - fully franked. Shares are bought from WDS at MP (closing price on 31 May). The two transactions are for equal (cash) value, ie not including franking credits, so that it is almost as if there was a faux cash transaction that took place in the middle.
The BHP dividned showing in my Future Income Report is the transaction that I entered.
1 Like