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Return of capital not reflected in period when returned

DMVantastic

A mutual fund returned approximately $10K in July 2016. The investment decreased but the cash is not reflected. As a result, when Quicken subtracts total liabilities from total assets to calculate current earnings--we're a non-profit so no stock--current earnings are incorrect. Everything's fine in August 2016 and thereafter. I validated the data file numerous times.

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Jim_Harman

When you say "returned" was it a return of capital or some other type of distribution?

Did the distribution go to the account's cash balance, or to some other account?

If the distribution went to the same account but the cash balance was not affected, that is usually an indication that there is a "placeholder transaction" that needs to be resolved. Go to Edit/Preferences/Investment transactions and make sure Show hidden transactions is checked, then provide the missing information for the placeholder.

DMVantastic

It was an actual check returning part of the purchase price on a poorly-performing mutual fund that was closed to further investment several years ago. The accounting treatment therefore was to debit cash and credit the investment. As soon as the fund returned some of the capital to all the investors, the market immediately lowered the price per share so that the market value of each fund holder's investment remained essentially flat.

DMVantastic

Could Quicken be designed to reflect only placeholder transactions? If so, why would July be screwy?

DMVantastic

I'm not seeing the hidden transactions button on this screen under Preferences.

DMVantastic

BTW, it's Quicken Home & Business 2015 R12.

DMVantastic

Found it under the bold "Investment transactions" and not "Investing Quicken.com Portfolio," but it didn't fix the problem.

Jim_Harman

Check the fund's price history in Quicken after the distribution. Did it drop as expected?

When you say "the market value of each fund holder's investment remained essentially flat" it is post-distribution market value of the fund plus the distribution that remained flat, right?

Jim_Harman

If you have placeholder transactions, you have to fix them, not just make them visible. Search Quicken help for Placeholder transactions for more info.

q_lurker

When you received the check in July, how did you handle that with respect to Quicken?

I would have (I think) recorded a RtrnCap transaction effectively placing the $10K into the brokerage (MF) account. Then I would have moved that cash out to whatever checking account the $10K was deposited in. The RtrnCap would have reduced the cost basis of the original investment. Investment down; cash up, no net change. What did you do?

If there was no change in the number of shares, there should no be any placeholder considerations. (The number of shares may have changed for other reasons, like a reinvested dividend.)

DMVantastic

Had to save this report as three different JPG pages. I don't see any missing data.

DMVantastic

Page 3 bumped Page 2 out of the window.

DMVantastic

My predecessor's initial entry was to bring $50K into the account as "Cash Transferred In" back in December 2009. That cash was then used to buy shares.

DMVantastic

Posted the above for Jim Harman, then saw your post, q.lurker. Very first entry was to credit money market account at another institution and debit funds in transit. Then the mutual fund purchase credited funds in transit and debited the investment's cash account. Looks straight-forward from my perspective.

DMVantastic

Didn't see your question from two hours ago, Jim. Prior to capital return we had 1,900 shares valued at $17.50. Post-return, they were valued at $12.41. Drop in market value reflected the $10K that was returned to us.

Jim_Harman

Re-reading your original post, everything was OK up to the return of Capital in July, total value including the distribution was wrong until August, then it was OK again. Looking at the fund's price history on Bloomberg https://www.bloomberg.com/quote/XCBFX:US it was $17.51 on 7/5 then dropped to $12.28 on 7/6.

I bet your price history in Quicken is wrong in July. Go to the Security Detail view for this fund, then select Update/Edit price history and check the data for July. If there are gaps or errors, especially if it is missing the $12.28 price on 7/6, fix them. Quicken's historical data for this fund looks OK, but if you download it now it only has weekly prices, not daily for last July.

DMVantastic

Hi, Jim. I had already downloaded the daily prices for July 2016. I wish that was the problem.

Here's the balance sheet for June and July.

q_lurker

Hi, Jim. I had already downloaded the daily prices for July 2016. I wish that was the problem.

Here's the balance sheet for June and July.

Denise: Can I ask you to focus on one direction. That is, your opening question mentioned:

when Quicken subtracts total liabilities from total assets to calculate current earnings--we're a non-profit so no stock--current earnings are incorrect.

pointing to current earnings from some unidentified report. Then you provided transaction report excerpts, and then a "Balance Sheet" report. This leaves me confused about where you are seeing a discrepancy.

It now appears you are generating a Business / Balance Sheet report on a monthly basis for some undefined overall time period and seeing a unsubstantiated value for 7/31/16 for one specific account that appears to hold only one security (no cash?) that appears to be 1,871.338 shares valued at 17.50/share on 6/30/16 ($33,748.42 total) and 12.41/share on 7/31/16 ($23,223.31 total). Quicken however is showing the value on 7/31/16 at $13,445.57 total value.

Given that data, my next direction would be to focus the Balance sheet report to that account and that month, first on a weekly frequency, then varying the dates day by day to see when exactly the unexpected change occurred.

Secondly, I would be looking at an Investment / Portfolio Value report again focusing on that account and that time period, again getting to perhaps a day-by-day sequence.

While there does not appear to be anything wrong with the RtrnCapX transaction, it may turn out that you need to delete and re-enter that transaction. It is telling that the difference in the 7/31/16 values between your expected value (23,223.31) and the presented value (13,445.57) is equal to the RtrnCapX transaction (9,777.74).

Another direction I would be considering would be restoring a backup file from that time period (the time period that transaction was entered) to see if that shows anything different. Note that the backup restoration is for investigative purposes at this time, so do not overwrite any current files.