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Dividend Receivable Accruals

Michael Detje

Is there a method to accrue dividends post shares going ex-dividend?

I am looking at preparing a report and showing month end balances that exclude dividends that are earned but yet to be paid. The cash reporting undervalues portfolios that have stocks showing ex-dividend values but no dividend accrual for any period end prior to dividend payments.

I am using Quicken Home and Business 2016 Canadian version

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q_lurker

I suspect the question has been asked before, it is not a common one. I don't know of an "accepted" procedure.

If I were to take this on, I would first look at having a separate "accrual" account where I would initially take in the dividend, and then later transfer that cash from "accrual" account to the real account.

My second thought is that I would probably like the real account to stand correctly on its own and not depend on the "accrual" account at all. That would lead me to still entering the Div transactions in the real account on the date paid. The "accrual account would then have a series of MiscInc and MiscExp transactions on dividend accrued and paid dates. The cash balance would fluctuate some dollar level and 0 as dividends were accrued and paid.

This procedure could be somewhat labor intensive for not a lot of real value, IMO.

Michael Detje

Agree if the ability to enter Date of Record and Date of Payment of a dividend then a work around would be required.
As I only use the investment component I am unsure how or even if I could record MiscInc as an accrual unless I use a different "bank account" type which would be a "Dividend Receivable" surrogate.

I will give this a try as I have a report to create and I wish the starting point to be the true portfolio value which would include dividend receivables.

Thanks for the suggestion.

q_lurker

Agree if the ability to enter Date of Record and Date of Payment of a dividend then a work around would be required.
As I only use the investment component I am unsure how or even if I could record MiscInc as an accrual unless I use a different "bank account" type which would be a "Dividend Receivable" surrogate.

I will give this a try as I have a report to create and I wish the starting point to be the true portfolio value which would include dividend receivables.

Thanks for the suggestion.

Further thoughts:
My original thought (above) would have yielded two transactions in the Accrual Account and one in the Real Account.

Accrual Account (an investment account)
ex-div date / Div / Security / Amount
Payable date / XOut / (name of security) / Amount / [Real Account]

Real Account
Payable date / XIn / (name of security) / Amount / [Accrual Account]

The Real Account XIn transaction would be automatically generated by the XOut transactions in the Accrual Account.

I then tweaked that because I would prefer the Div transaction to be in the Real Account:

Accrual Account
ex-div date / MiscInc / Security / Category = Accrued Div / Amount / memo
payable date / MiscExp / Security / Category = Accrued Div / Amount / memo

Real Account
payable date / Div / Security / Amount

The MiscInc and MiscExp transactions are standard investment account transactions for receiving income and spending money. They do allow selecting the security (the XOut transaction would require you to type the security name). I would see creating a specific category (such as Accrued Div) for these transactions.

One reason to prefer that second setup is that the Div transactions downloaded from the financial institution would flow cleanly into the real account.

That then brings to mind a third possibility, keeping everything within the Real account. Create a MM security = AccruedDivs to be managed with a constant $1/share value. On the ex-div date, Add Shares of the AccruedDivs MM; on the payable date, Remove Shares.

Real Acocunt
ex-div date / Add Shares / AccruedDivs / amount / $1/share / amount / memo
payable date / Remove Shares / AccruedDivs / amount / memo
payable date / Div / Security / Amount

What I tend to like about this approach is that I can look at info easily with or without accrued dividends by just including or excluding the AccruedDivs security. The same can be said for the other approaches including or excluding the Accrued Div account, but it seems simpler with an extra security versus an extra account.

Bob_L

So presumably in non-qualified accounts you all also accrue your taxes? :-)