Selling stakes in other businesses...

Question asked by Nathan Winch 11 years ago

As an investment company, we find it very easy to account for our investments in private equity on Clear Books. It shows as an asset for the amount we invest using the "investment in associates" function. You can also easily account for dividend income the company receives from its stakes. Great.

However, what about when you want to sell the stake/share? I can't identify any function(s) in the system to account for the sale of shares, perhaps one of the income tabs such as "other income" and create a new "sale of shares" option..? But also, how do you then wipe the original equity asset from your balance sheet (because, obviously, you don't own the shares anymore).

I'm sure there will be a very easy solution to this (it is Clear Books!) but I just can't see it. As an investment company, this is our only trading activity in buying and selling company shares. Hope to hear from someone as soon as possible. Many thanks.

Kind Regards,
Nathan Winch

Accounting Accounting
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3 Replies

So I best ask our accountant? Because this Journal aspect isn't helpful in the slightest...

11 years ago

Hello Nathan,

As Brendan has mentioned, you will need to use the journal function to account for the changes in investments. There should be 2 journals in a share change, one journal will reduce the balance of the original holder, while the second journal will be used to increase the new investor.

Please confirm with your accountant as to which credits and debits will need to be used, including the need to create any new account codes that would help you with this situation in the future.

Regards
Vanish.

11 years ago

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