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Shares and other securities that become worthless or in liquidation

 

Support Query

How do I process a transaction for shares which have been deemed worthless or are liquidation? 

 

 

Further Information

When a company is placed in liquidation or administration, company law restricts the transfer of shares in the company.

 

You may be able to claim a capital loss if you are:

 

  • a shareholder and a liquidator or an administrator of a company declares in writing that they have reasonable grounds to believe there is no likelihood that shareholders will receive any further distribution for their shares
  • an investor who holds a financial instrument in a company and the liquidator or administrator of the company makes a declaration in writing that the financial instrument has no value or negligible value 

ATO - When you can claim losses on shares and units

 

Note

BGL do not provide accounting or taxation advice. The following is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps.

 

Shares and other securities when you can choose to make a capital loss 

 

  1. On the Transaction List screen create a new Journal transaction
  2. Enter a DR and CR $0 to the Investment account. 
  3. On the Credit Transaction enter the disposal details. This will trigger a Capital Loss  

Shares and other securities when you cannot make a capital loss 

 

  1. On the Chart of Accounts screen, unselect the Asset Subject to CGT checkbox and save
  2. On the Transaction List screen create a new Journal transaction
  3. Enter a DR and CR $0 to the Investment account. 
  4. On the Credit Transaction enter the disposal details. This will trigger an Accounting Loss (Not CGT) and post the amount to Account 24800 Changes in Market Values of Other Assets  

 

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