Investment in Equity FIFO

PURPOSE

To show illustration of investment in equity FIFO.

OVERVIEW

Gains and losses arising from trading activity are reported to on trade date. Gains and losses analyzed between price and foreign exchange component. Month end security position reported at market value.

SUITABILITY

Portfolio where investment is held for trading purposes where the cost is base on First-in-first-out (FIFO) basis.

TRANSACTION DETAILS

Portfolio
Security Name
APT
ACO
Trade ID
Buy/Sell
Trade Date
Value Date
Quantity
Trade Currency
Price
Gross Proceeds
Commission
Contract Stamp
Fees
GST/VAT
Transaction Cost
Net Proceeds
IVM1001
Buy
3-Feb-03
4-Feb-03
10,000.00
SGD
1.23
12,345.00
6.82
7.52
9.05
6.29
29.68
12,374.68
IVM1002
Buy
4-Feb-03
5-Feb-03
20,000.00
SGD
1.57
31,356.00
7.12
2.74
8.37
3.62
21.85
31,377.85
IVM1003
Sell
5-Feb-03
6-Feb-03
3,000.00
SGD
1.65
4,963.20
0.66
3.56
9.33
4.24
17.79
4,945.41

The following is the movement in cumulative carrying cost as the result of transaction IVM1001 and IVM1002

TradeDateBuy/SellQuantityNet Cost SGDExc RateNet Cost USD
IVM10013-Feb-03Buy
10,000.00
12,374.68
0.5674567,022.09
IVM10024-Feb-03Buy
20,000.00
31,377.85
0.58580618,381.33
Cumulative quantity and cost
30,000.00
43,752.53
0.0025,403.42
A
B

DIVIDEND INCOME

Declare Date
Ex-quantity
Per Share
Total
Tax
Tax Amt
Transaction Cost
Net Dividend
25-Feb-03
27,000.00
0.123
3,321.00
27%
896.67
11.23
2,413.10

MONTH END VALUATION

ACOValuation
28-Feb1.7123 / share

SUMMARY OF JOURNALS

IDDateDescription
J13-Feb-03Trade IVM1001 - Trade Date Journal
J24-Feb-03Trade IVM1001 - Settlement Date Journal
J34-Feb-03Trade IVM1002 - Trade Date Journals
J45-Feb-03Trade IVM1002 - Settlement Date Journals
J55-Feb-03Trade IVM1003 - Trade Date Journals
J66-Feb-03Trade IVM1003 - Settlement Date Journals
J728-Feb-03Month end revaluation of investment position
J81-Mar-03Reversal of month marked to market
J928-Feb-03Month end accruals of dividend accruals
J101-Mar-03Reversal of month end accruals
J115-Mar-03Settlement of Dividend

J1                  Trade IVM1001 – Trade Date Journal

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
IVM10013-Feb-03BINV: Investment - CostSGD12,374.680.567456USD7,022.09J1a
IVM10013-Feb-03BINV: Due to BrokerSGD-12,374.680.567456USD-7,022.09J1b

Note J1a:           The exchange rate 1.76225 is the booking rate on 03-Feb-03 (multiplier 0.567456).

J2                  Trade IVM1001 – Settlement Date Journal

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
IVM10014-Feb-03BINV: Due to BrokerSGD12,374.680.567456USD7,022.09J2a
IVM10014-Feb-03BCash at BankSGD-12,374.680.585806USD-7,249.16J2b
IVM10014-Feb-03BFX Realised Losses - InvestmentSGD0.000.000000USD227.07J2c

Note J2b:           The exchange rate 1.70705 is the booking rate on settlement of the trade – 04-Feb-03 (multiplier 0.585806).

Note J2c:           The FX realised arises because of the rate movement between 3rd and the 4th of Feb on the payable amount of SGD 12,347.68. This may be calculated as follows:

SGD - 12,374.68 converted to USD at 0.567456-7,022.09
at 0.585806-7,249.16
Additional payable amount (loss)-227.07

J3                  Trade IVM1002 – Trade Date Journals

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
IVM10024-Feb-03BINV: Investment CostSGD31,377.850.585806USD18,381.33J3a
IVM10024-Feb-03BINV: Due to BrokerSGD-31,377.850.585806USD-18,381.33J3b

J4                  Trade IVM1002 – Settlement Date Journals

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
IVM10025-Feb-03BINV: Due to BrokerSGD31,377.850.585806USD18,381.33J4a
IVM10025-Feb-03BCash at BankSGD-31,377.850.571883USD-17,944.45J4b
IVM10025-Feb-03PFX - Realised Gains - InvestmentSGD0.000.000000USD-436.88J4c

J5                  Trade IVM1003 – Trade Date Journals

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
IVM10035-Feb-03BINV: Due to BrokerSGD4,945.410.571882USD2,828.19J5a
IVM10035-Feb-03BINV: Investment - CostSGD-3,712.400.567456USD-2,106.63J5b
IVM10035-Feb-03PINV: Trading Income Price ImpactSGD-1,233.010.571877USD-705.13J5c
IVM10035-Feb-03PINV: Trading Income FX ImpactSGD0.000.000000USD-16.43J5d

IVM1003 is a sale transaction that liquidate 3,000 of the holding of 10,000 shares. As a result, there are profit and impact of the transaction. There are calculated as follows and used for the journals.

Note J5b:           Calculation of Cost

QuantityTrade CcyBase Ccy
10,000.0012,374.68= A7,022.09= B
1.001.237468= A'0.702209= B'
3,000.003,712.40C = A' * 30002,106.63D = B' * 3000

Note J5c:           Calculation of Total Profit and Loss

Trade CcyBase Ccy
Proceeds4,945.41E2,828.19F
Cost3,712.40= C2,106.63= D
Profit and Loss1,233.01721.56

Calculation of Current Rate (as a multiplier)

Trade Proceeds4,945.41= E
Base Proceeds2,828.19= F
Current Rate0.571882G = E / F

Note J5d:           Calculation of FX Impact

Base Cost at Historical Rate2,106.63= D
Base Cost at Current Rate2,123.06H = C * G
FX Impact (Profit)16.43J = H - D

Note J5c:           Calculation of Price Impact

Base Cost at Current Rate2,123.06= H
Base Proceeds2,828.19= F
Price Impact (Profit)705.13L = F - H

Alternatively, to avoid rounding error in calculation, the price impact can be computed as the residual amount of the total profit and loss after the FX Impact.

FX Impact (Profit)16.43= J
Price Impact (Profit)705.13
Total Profit and Loss721.56

J6                  Trade IVM1003 – Settlement Date Journals

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
IVM10036-Feb-03BINV: Due to BrokerSGD-4,945.410.571882USD-2,828.19J6a
IVM10036-Feb-03BCash at BankSGD4,945.410.560451USD2,771.66J6b
IVM10036-Feb-03PFX - Realised Losses - InvestmentSGD0.000.000000USD56.53J6c

J7                  Month end revaluation of investment position

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
APT/ACO28-Feb-03BINV: Investment CostSGD6,191.970.485390USD3,005.52J7a
APT/ACO28-Feb-03PINV: MTM - Price ImpactSGD-6,191.970.568917USD-3,522.72J7b
APT/ACO28-Feb-03PINV: MTM - FX ImpactSGD0.000.000000USD517.20J7c

At month end the position in ACO shares is 27,000. The market value per share is 1.7123. The position is marked to market (MTM) for accounting proposes. The breakdown of the revaluation profit and loss is as follows:

Calculation of Market Cost

QuantityPriceTrade CcyRateBase Ccy
27,000.001.712346,232.10A'0.56891926,302.31B'

Calculation of Position and Holding Cost

QtyTrade NetRateBase Net
IVM100110,000.0012,374.680.5674567,022.09
IVM1003-3,000.00-3,712.400.567456-2,106.63
Net IVM10017,000.008,662.284,915.46
Net IVM100220,000.0031,377.850.58580618,381.33
Total Cost27,000.0040,040.13C'0.58183623,296.79D'

Note J7a:           Calculation of Revaluation MTM

Trade CcyBase Ccy
MV46,232.10= A'26,302.31= B'
Cost40,040.13= C'23,296.79= D'
Profit and Loss6,191.973,005.52

Calculation of Historical Rate (as a multiplier)

Trade Cost Value40,040.13= C'
Base Cost Value23,296.79= D'
Current Rate0.581836E' = D' / C'

Calculation of Current Rate (as a multiplier)

Trade Market Value46,323.10= A'
Base Market Value26,302.31= B'
Current Rate0.568919F' = B' / A'

Note J7c:           Calculation of FX Impact

Base Cost at Historical Rate23,296.79G' = E' * C'
Base Cost at Current Rate22,779.59H' = C' * F'
FX Impact (Loss)-517.20I'

Note J7b:           Calculation of Price Impact

Base Cost at Current Rate22,779.59= H'
Base Cost at Market Value26,302.31= B'
Price Impact (Profit)3,522.72J'

Alternatively, to avoid rounding error in calculation, the price impact can be computed as the residual amount of the total profit and loss after the FX Impact.

FX Impact-517.20= I'
Price Impact (Profit)3,522.72
Total Profit and Loss3,005.52

J8                  Reversal of month marked to market

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
APT/ACO1-Mar-03BINV: Investment CostSGD-6,191.970.485390USD-3,005.52J8a
APT/ACO1-Mar-03PINV: MTM - Price ImpactSGD6,191.970.568917USD3,522.72J8b
APT/ACO1-Mar-03PINV: MTM - FX ImpactSGD0.000.000000USD-517.20J8c

J9                  Month end accruals of dividend accruals

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
APT/ACO28-Feb-03PDIV: Dividend IncomeSGD-3,321.000.562662USD-1,868.60J9a
APT/ACO28-Feb-03PDIV: Tax on DividendSGD896.670.562661USD504.52J9b
APT/ACO28-Feb-03PDIV: Other Dividend ExpensesSGD11.230.562778USD6.32J9c
APT/ACO28-Feb-03BDIV: Dividend ReceivableSGD2,413.100.568920USD1,372.86J9d
APT/ACO28-Feb-03PFX - Unrealised Gains - RevenueSGD0.000.000000USD-15.10J9e

Note J9a to J9c: Booking rate for journals

QuantityPer ShareTaxTax AmtTransx CostNet Dividend
Ccy Amt
27,000.00
0.123
0.27
896.67
11.232,413.10
Base Amount @ 25 Feb
0.56266071
0.15
504.52
6.231,357.76=A"

Note J9e:          Computation of FX gain on unrealized dividend receivable

Base Amount @ 28 Feb0.568917921,372.86= B"
FX Gains on Net Dividend 15.10C" = B" - A"

J10                Reversal of month end accruals

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
APT/ACO1-Mar-03PDIV: Dividend IncomeSGD3,321.000.562662USD1,868.60J10a
APT/ACO1-Mar-03PDIV: Tax on DividendSGD-896.670.562661USD-504.52J10b
APT/ACO1-Mar-03PDIV: Other Dividend ExpensesSGD-11.230.562778USD-6.32J10c
APT/ACO1-Mar-03BDIV: Dividend ReceivableSGD-2,413.100.568920USD-1,372.86J10d
APT/ACO1-Mar-03PFX - Unrealised Gains - RevenueSGD0.000.000000USD15.10J10e

J11                Settlement of Dividend

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)RateBaseBase Amt D/(CR)Line
APT/ACO5-Mar-03PDIV: Dividend IncomeSGD-3,321.000.562662USD-1,868.60J11a
APT/ACO5-Mar-03PDIV: Tax on DividendSGD896.670.562661USD504.52J11b
APT/ACO5-Mar-03PDIV: Other Dividend ExpensesSGD11.230.562778USD6.32J11c
APT/ACO5-Mar-03BCashSGD2,413.100.568344USD1,371.47J11d
APT/ACO5-Mar-03PFX - Realised Gains - RevenueSGD0.000.000000USD-13.71J11e

Note J11a to J11c: Booking rate for journals

QuantityPer ShareTaxTax AmtTransx CostNet Dividend
Ccy Amt
27,000.00
0.123
0.27
896.67
11.232,413.10
Base Amount @ 25 Feb
0.56266071
0.15
504.52
6.321,357.76=A~

Note J11e:        Computation of FX gain on unrealized dividend receivable

Base Amount @ 28 Feb0.568343281,371.47= B~
FX Gains on Net Dividend 13.71C~ = B~ - A~

EXCHANGE RATES

Our illustration assumes the company uses different daily exchange rates for accounting.

Average rates are computed by using the multiplier rate from trade/transaction currency to the base currency each day and averaging this over the relevant period.

The following rates were used for this illustration.

Spot Rate

DateUSD/SGDSGD/USD*
3-Feb-031.7622500.567456
4-Feb-031.7070500.585806
5-Feb-031.7486100.571883
6-Feb-031.7842800.560450
25-Feb-031.7772700.562661
28-Feb-031.7577200.567919
1-Mar-031.7716900.564433
5-Mar-031.7595000.568343

* round to 6 dp. Full precision used for calculation.

FREQUENTLY ASKED QUESTIONS

RELATED INFORMATION

CHANGE HISTORY

DateByChanges
14-Dec-2015CSCreation.
20-Jun-2016RJReformatted.
28-Apr-2020LTRe-formatting.
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