Establishing a club Valuation Date
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Establishing a club Valuation Date A reader recently asked....
I am in the process of starting up an
Investment club. My question is if we have our monthly meeting on the 20th of
the month, do we set the Valuation date for the 1st of the month or the last day
of the month? Or do we need a set Valuation date?
In the old days when a treasurer had to do all the
accounting and club bookkeeping calculations by hand, the valuation date was
often set several days or even weeks before the club meeting date in order
to give the treasurer time to complete all of the complex tasks.
This is no longer necessary with bivio. The complex calculations are
done in a matter of micro seconds and the security valuations are updated
automatically each night.
Therefore, each and everyday you will find that
bivio reports the very latest valuation of your club securities, member's
accounts, and the overall club portfolio.
Having said that, your club must still decide
what valuation date is used to establish the price that is paid for new
units bought with monthly member payments. bivio's member
payment transaction entry page states.....
"Member Valuation
Date. Clubs typically choose one day per month as their
Valuation Date, the date to convert member payments into club units. We
have carried over this traditional approach, because it is what many clubs are
familiar with. Since bivio values your portfolio on a daily basis, your club
could choose to convert payments on the date they are deposited. Your
partnership agreement or bylaws should state which valuation method you use and
if you choose monthly valuations, on which business day the valuation
occurs."
I recommend the use of an established and
regular valuation date to convert member payments into club units. This
date should be as close as reasonably possible to the date of your
meetings or the deposit of member payments considering the operational
requirements and needs of your particular club.
Thanks for using bivio!
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