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NMS, NEPTUNE MARINE SERVICES LIMITED
arty
post Posted: Oct 26 2012, 04:08 PM
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In Reply To: grevillia's post @ Oct 26 2012, 02:43 PM

That's obviously how it should be done - and not only at tax time.
What we've been talking about is, some brokers can't get even that right; rather than keeping track of the total cost of each position, they store number held and price paid vs current last trade.

One of my brokers (Paritrade) fixed their software within days after I told them. Westpac is too big for such little niggles.



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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)

Said 'Thanks' for this post: grevillia  
 
grevillia
post Posted: Oct 26 2012, 02:43 PM
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In Reply To: veeone's post @ Oct 26 2012, 12:44 PM

Forget about any tax complications - none to worry about.

You calculate total dollars paid for the shares and match with total dollars received on sale.

If you wish to view per share numbers, you adjust for the change to suit.

 
arty
post Posted: Oct 26 2012, 12:58 PM
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In Reply To: veeone's post @ Oct 26 2012, 12:44 PM

Can't say; I use my own PM, reconciled with Bank records and Contract Notes.
But here is a current example of a bunch of ISNOB that I haven't bothered selling:
QUOTE
Code Units Purchase Price ($) Last Price ($) Market Value ($) Profit / Loss Value($) Profit / Loss %
ISNOB 25,000 0.003 0.02 500 418 506.06

It shows the purchase price (when I bought 500k at 0.3c) before 20:1 consolidation, and a 500% profit instead of a 60% loss.



--------------------
I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
veeone
post Posted: Oct 26 2012, 12:44 PM
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In Reply To: arty's post @ Oct 26 2012, 12:06 PM

QUOTE
And then they calculate the unrealised paper profit from current to old, resulting in 700% profit when it should be a 20% loss.


Whats happen at tax time Arty?? They report the loss or profit?? V1

 
OZGAZ
post Posted: Oct 26 2012, 12:37 PM
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In Reply To: veeone's post @ Oct 26 2012, 11:07 AM

My fears exactly Veeone...


Cheers

Ozgaz



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Smile while TRADING it's only money... :)
 
arty
post Posted: Oct 26 2012, 12:06 PM
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In Reply To: veeone's post @ Oct 26 2012, 11:07 AM

It's similar to a Pop concert, where little girls stand on tip-toes to get their picture taken next to a "celebrity":
"Look at moi! Look a moi! I'm glamorous."

... and if punters don't pay attention and look only once in a month or quarter, they'll see XYZ has risen ten-fold, so they buy more.
Some brokers' portfolio manager will even support that fallacy and continue to show the original cost per share, although they amend the number of shares you hold. And then they calculate the unrealised paper profit from current to old, resulting in 700% profit when it should be a 20% loss.



--------------------
I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 


flower
post Posted: Oct 26 2012, 11:31 AM
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In Reply To: wren's post @ Oct 26 2012, 10:18 AM

QUOTE
" mirrors the UK law"

flower, this has nothing whatever to do with law either here or in the UK.



Change "UK law" for "Australian Companies act" then--- presuming the two to be similiar.



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Combining Fundamental comments with Fundamental charts.
 
veeone
post Posted: Oct 26 2012, 11:07 AM
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In Reply To: flower's post @ Oct 26 2012, 10:06 AM

"surely there are more genuine reasons for share consolidations"

Sometimes its just to look more favourable so as to issue more shares. Had a couple of penny dreadfulls consolidate (5 for 1) with a billion+ shares only to have them be at the same level within 18 months after a raft of capital raisings!!! SP was even lower as well!!

 
wren
post Posted: Oct 26 2012, 10:18 AM
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In Reply To: flower's post @ Oct 26 2012, 10:06 AM

" mirrors the UK law"

flower, this has nothing whatever to do with law either here or in the UK.

 
flower
post Posted: Oct 26 2012, 10:06 AM
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In Reply To: arty's post @ Oct 26 2012, 09:48 AM

QUOTE
It depends on the company's situation.
If they're down in the dumps sub-1c, it's usually just another precursor for a capital raising at a more "respectable" level. In many cases, the following cap raising is then quickly eroded by directors' fees, rather than debt consolidation etc.
remember CVI? I could mention some others that are still alive - barely...


arty, surely there are more genuine reasons for share consolidations, presume Australian company law mirrors the UK law:
>>>Share consolidations are used as a means of making a share more attractive to institutional investors who consider penny shares too volatile. <<<<<<
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Under the UK Companies Act, a share must have a par or nominal value, e.g. 100 pence ordinary share. Authorised capital is the nominal or par value of the maximum number of shares the company may issue without seeking further shareholder approval.

A company can increase the number of shares already in issue by for example decreasing the par value from 100 pence to 25 pence through a process referred to as 'share splits'. Typically the reason companies carry out share splits is to improve the liquidity of a share if the share price is considered too expensive.

Alternatively a share consolidation or reverse share split can be used to increase the value of the share. Share consolidations are used as a means of making a share more attractive to institutional investors who consider penny shares too volatile. For example, if a company with 25 pence shares has a one for four consolidation, the par value would rise to 100 pence. The number of ordinary shares issued would fall to one quarter of the previous level, and the share price, earnings per share and dividends per share would rise by a factor of four but the P/E ratio and yield would be unchanged.

The implications of a share split or consolidation are:

  • For a share split the number of shares that you own are increased and for a reverse share split or consolidation the number of shares that you own are decreased, however the total value of your shareholding remains constant. For example if you own 1,000 ordinary shares in Company ABC plc which were trading at 500 pence before a 2:1 share split (two for one share split i.e. for every one share you own, you get two shares), after the split you would own 2,000 ordinary shares worth 250 pence each.
  • The market price of the shares is re-adjusted in proportion to the split. For example if a share was trading at 800 pence and there was a 4:1 share split, the re-adjusted price would be one quarter of the original price, therefore 200 pence. Alternatively if there was a reverse share split a share trading at 25 pence before a 1:10 split would have a re-adjusted share price of 250 pence
  • Per Share ratios such as Earnings per share, Dividends and Asset values per share are restated in proportion to the split, however a split does not affect for example P/E ratios, yield and market capitalisation.
  • There would be no financial impact on the company, other than administration fees, because there are no cash flow changes involved in executing a share split.
  • If a stock split results in fractional shares the fractional share is typically sold off either to the benefit of the company or as cash paid to the investor. For example if you own 100 shares currently trading at 10 pence, if there is a 1:3 reverse split after the split you would receive 33 shares with a re-adjusted value of 30 pence plus a fractional one third of a share. The fractional share would typically be sold at a value of 10 pence i.e. 1/3 of 30 pence.
  • The split / consolidation are treated as a share reorganisation for capital gains tax purposes, with the base cost of the existing shares apportioned between the new shares. The new share issue is not treated as an accquisition and the loss/alteration of existing shares is not treated as a disposal.




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Combining Fundamental comments with Fundamental charts.
 
 


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