Expense Recording in Bivio

Leonard J Delmolino on

I had always thought expenses are recorded by reducing the
number of units in each member's account. However, when
taking a closer at our records, this does not appear to be
the case. Whenever we've entered an expense, it appears that
the overall unit value is adjusted downward and that the
number of units each member owns remains the same.

Can anyone confirm whether this is correct or incorrect
behavior?

Thanks in advance!

Len Delmolino
Massachusetts High Flyers Investment Club

Bernard Worst on

I would think the number of shares should only change when partners purchase additional shares at the share value at the time. Dividends expenses should change the account value. Member worth is total value divided by total number of member shares.

Bernard Worst

bworst@yahoo.com

From: club_cafe@bivio.com <club_cafe@bivio.com> on behalf of Leonard J Delmolino via bivio.com <user*27879700001@bivio.com>
Sent: Saturday, August 27, 2022 1:19:23 PM
To: club_cafe@bivio.com <club_cafe@bivio.com>
Subject: [club_cafe] Expense Recording in Bivio

I had always thought expenses are recorded by reducing the
number of units in each member's account. However, when
taking a closer at our records, this does not appear to be
the case. Whenever we've entered an expense, it appears that
the overall unit value is adjusted downward and that the
number of units each member owns remains the same.

Can anyone confirm whether this is correct or incorrect
behavior?

Thanks in advance!

Len Delmolino
Massachusetts High Flyers Investment Club

ira smilovitz on

Len,

The usual (that is, the IRS default) method is to reduce the unit value. Expenses are allocated in proportion to each member's ownership share in the club. However, should the club decide to allocate an expense equally to each member, in that case, each member is deemed to have made a partial withdrawal in the amount of their share of the expense. This would reduce each member's number of units.

Ira Smilovitz

On Sat, Aug 27, 2022 at 1:19 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:

I had always thought expenses are recorded by reducing the
number of units in each member's account. However, when
taking a closer at our records, this does not appear to be
the case. Whenever we've entered an expense, it appears that
the overall unit value is adjusted downward and that the
number of units each member owns remains the same.

Can anyone confirm whether this is correct or incorrect
behavior?

Thanks in advance!

Len Delmolino
Massachusetts High Flyers Investment Club

Leonard J Delmolino on

Thanks Ira! That clears it up.

Len Delmolino
Massachusetts High Flyers' Investment Club