merger of two clubs

andy solak on

I belong to two investment clubs. We have approved a merger
of the two clubs. What would be the accounting process.
One club is using Bivio and the other Naic club accounting.

iras1 on

DO NOT DO IT!! Neither software can handle the problems with tracking basis. The only way to successfully merge two clubs is for one club to cash out and then contribute cash to the surviving club.

Should you try to merge the securities holdings of two clubs, you would have to track separately the unrealized gains in each security from the original purchase date(s) to the merger date. Then when the shares were sold, you would have to allocate the separately tracked gain to those members that owned the shares pre-merger and the remaining gain to all members.

There isn't any software available that will track these amounts and correctly do the allocations.

Ira Smilovitz

In a message dated 01/15/09 14:58:09 Eastern Standard Time, andykalos@bivio.com writes:

I belong to two investment clubs. We have approved a merger
of the two clubs. What would be the accounting process.
One club is using Bivio and the other Naic club accounting.

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