Take Over Accounting

[roland]

Not sure what to do here with accounting for my HDF take over by APA

I'm sitting on 118% gain with HDF and I'll be getting about half of my cost in cash and the remainder in APA shares.

From an accounting perspective, should I:

- liquidate my HDF with with the cash return value which will show a major loss and enter the APA shares at no cost which will show a zero value cost

or

- figure out the cost price of the APA shares on the issue date, liquidate the HDF shares at the full return value (cash and script value), show a major capital gain and repurchase the APA shares at the offer value?

Regards
Roland

 

[skc]

Not sure what to do here with accounting for my HDF take over by APA

I'm sitting on 118% gain with HDF and I'll be getting about half of my cost in cash and the remainder in APA shares.

From an accounting perspective, should I:

- liquidate my HDF with with the cash return value which will show a major loss and enter the APA shares at no cost which will show a zero value cost

or

- figure out the cost price of the APA shares on the issue date, liquidate the HDF shares at the full return value (cash and script value), show a major capital gain and repurchase the APA shares at the offer value?

Regards
Roland

Script based takeover often has CGT relief provisions, but each case is different. You are not required to make your own decision. They should inform you via the transaction documents, or call them if they don't.

If you are talking about book entry for your own personal records - then whatever suits...