Member payments, unit valuations, and the value of investments....
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Member payments, unit valuations, and the value of investments.... We recently received the
following....
I.....have had several of the investors ask how they can determine the values within each stock if possible. The current value of each stock within your club
portfolio is updated automatically each evening after the market
close. To view these values a club member may go to their club and
select Accounting > Reports > Valuation Report. For more
information see https://www.bivio.com/hp/valuation-report.html If a member desires to see the history of
transactions related to any stock in your club portfolio, they may do so by
going to Accounting > Investments > and selecting the appropriate
investment. More information is available at https://www.bivio.com/hp/account-detail.html
I have found the Bivio program very
useful and a great tool. The question that is asked is if each person makes the same
contribution at different times of the month how do they figure how many share
and at what price they purchased?
Quite simply, the number of units purchased by each
member is determined by dividing the amount of that members payment by the
unit value. The unit value used in this calculation is based upon the valuation
date selected by the club officer entering the transaction.
Having said that, your club partnership agreement
should define when and how member payments are valued.
Generally, most clubs select one valuation date to use for any and all
payments recorded in any given month. Yet others may use the unit
valuation as of the date that the payment is received and
deposited. It is easy using bivio to
enter the transaction either way since the club officer entering the
transaction must select both the transaction date and the valuation date when a
payment is recorded. Once again, more information is available via
bivio's help files at https://www.bivio.com/hp/member-transactions.html
In summary, all payments recorded during a
given period utilizing the same valuation date will buy units at the same unit
value. In other words, equal payment amounts will receive an equal
number of units. On the other
hand, if the club, for example, uses various valuation dates as of
the date when payments are received, equal payments will not receive an equal
number of units because the unit value will have changed.
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