Member Withdrawal - Accumulated Interest - club_cafe

Member Withdrawal - Accumulated Interest

Jay Sternin on

I've read and I think understand the material on how to
process a member withdrawal. A nit that seems not to be
addressed is the following:
- having selected a valuation date and transaction date I
  get the proper withdraw amount. However we're
  accumulating some (trivial) interest in a money market
  which doesn't show up on the brokerage statement until the
  end of the month (after the withdrawal).

Question - shouldn't the withdrawing partner receive a share
of that interest (small as it is)? Or, since it isn't
credited to the account until after his/her withdrawal it's
just not a consideration?

Thanks......Jay

iras1 on

The latter. Since the interest hasn't been credited by the withdrawal date, the withdrawing partner doesn't receive it.

Conversely, a new member receives a part of any interest earned after the valuation date just prior to his joining up to his entry date.

Ira Smilovitz

In a message dated 06/29/09 23:20:21 Eastern Daylight Time, jsternin@bivio.com writes:

I've read and I think understand the material on how to
process a member withdrawal. A nit that seems not to be
addressed is the following:
- having selected a valuation date and transaction date I
get the proper withdraw amount. However we're
accumulating some (trivial) interest in a money market
which doesn't show up on the brokerage statement until the
end of the month (after the withdrawal).

Question - shouldn't the withdrawing partner receive a share
of that interest (small as it is)? Or, since it isn't
credited to the account until after his/her withdrawal it's
just not a consideration?

Jim Thomas on

> Question - shouldn't the withdrawing partner receive a share
> of that interest (small as it is)? Or, since it isn't
> credited to the account until after his/her withdrawal it's
> just not a consideration?

That's correct. Club Accounting is designed to work on a "cash" basis, not
an "accrual" basis.

-Jim Thomas

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