Valuation Dates

Paul Bleicher on

In starting our club, we need to decide about setting
valuation dates. Floating valuation dates are easier with
AccountSync, but there are two problems I see - one minor,
the other major.

Minor - deposits made at different times in the same month
may buy differing numbers of units. Nobody in my club is
likely to worry about this. In some clubs this leads to
"market timing" I guess.

Major - setting the date for valuation of a withdrawal.
Here, there is more money at stake and a member who is no
longer going to be associated with the club. The timetable
of the treasurer shouldn't determine how much this person
gets, I believe.

So, here is my question: Would it be ok to use floating
valuation dates for deposits and use a monthly valuation
date for withdrawals? That is, as long as this was followed
consistently.

Appreciate comments and opinions please.

Gene Rooks on

Paul, that is one of my problems with bivio, the 'floating' valuation date,
and the fact that treasurers need to be alert to enter what their PA
requires as a valuation date for payments and withdrawals. It doesn't
matter on other entries as buys, sells, dividends, etc.

In my opinion, a specified club valuation date for both all member deposits
paid during each period and for withdrawals being valued should be used.
Floating dates should not be acceptable on varying days for member payments
during a month, unless your PA allows for member payments to be credited at
the value the day they are paid or deposited. For fairness, all payments in
a particular valuation period should be posted as of the same date.

Gene Rooks, Space Coast Chapter

Rip West on

Paul,

As Gene has indicated, the important thing is to get your PA to agree with your actual practice. bivio can accommodate whatever your practice is, but it is essential to formulate your policy and to stick to it.

For fairness, all payments in a particular valuation period should be posted as of the same date.

There are many who would disagree with that statement, and I am one of them. There is nothing more fundamentally fair about crediting units based on a valuation date some days prior to the deposit date than crediting such units based on the value at the time of receipt.

Rip West
Saint Paul, MN

Rob Nagler on

Paul Bleicher writes:
> So, here is my question: Would it be ok to use floating
> valuation dates for deposits and use a monthly valuation
> date for withdrawals? That is, as long as this was followed
> consistently.

I don't think there is any problem with this. Just read the section
on withdrawals in The One Minute Treasurer(tm):

http://www.bivio.com/club_cafe/files/TheOneMinuteTreasurer.pdf

With AccountSync it's easy to set the valuation date at the time the
withdrawal is entered. You can write the check at any point, and when
you see it deposited. The three dates (valuation, check, and debit)
are independent of one another.

Cheers,
Rob

Mail