Thank you to everyone who responded to the valuation dates survey.  I thought there was a really nice response.   I have posted the information received here:

www.bivio.com/valuationdates

As you can see,   there is  a variety of valuation dates being used and a variety of reasons you have made the choices you have.  That is fine.  The most important thing is that everyone in your club understand how you’ve agreed to operate.

An investment club is a partnership managing assets that change in price daily.  To account for certain types of club business you need to agree on dates that you will value the assets.  These are called valuation dates. The types of club business you will need them for  include recording of member payments and withdrawals and recording expenses allocated “equally”.     If you wanted,  you could also specify valuation dates that you are going to use to look at your portfolio’s value to make investment decisions or to make sure your club records are reconciled with your brokerage records.

You can use one valuation date for all these types of business or you can specify different valuation dates for each of them.  Again,  it’s what works best for your club.  Part of your decision making process will probably include what tools your treasurer has available to create a valuation.

One thing you want to make sure you understand is that valuation date is not the date the business actually occurs.   In our type of accounting,  dates as well as amounts are important.  The transaction date is the date your club business actually gets conducted,  not the valuation date. The transaction date is the date you actually record a member contribution  or pay a member withdrawal.  That is the date  membership ownership percentages change.   I think there is general agreement amongst the “experts” that it is best to keep transaction dates as close as possible to the date you are using as the valuation  date.     

If the data collected and presented here generates a discussion within your club and you have any questions,  this is a great place to ask them.   If you’re a little leery of posting on this public list,  you’ll find a  form on the results page you can use to  submit your question anonymously.    I’ll be glad to bring up your topic for a generic discussion that everyone can participate in.  You can be sure if you have a question that probably someone else does also and will appreciate the fact that you’ve asked it.

Laurie Frederiksen

www.bivio.com