How to handle Stock Splits and Bond Maturities?

Charlie Brown

Is there a procedure or tech note that tells how to properly handle stock splits and bond maturities? When my brokerage downloads stock split or a bond maturity, Quicken doesn't seem to be able to handle it automatically. (I would ask for this feature as an improvement.) failing that, I have to go into the Placeholders and make some manual entries. Is there a simple documented procedure on how to handle these kinds of transactions so the investment values and cash balances are properly registered in my Quicken accounts?

Tom Young

Brokerages don't necessarily do proper "accounting", (I'm using that term in the strict sense of "Generally Accepted Account Principles), when they construct the transactions to be downloaded to your Quicken file.  You have to recognize these situations and act accordingly since you are the Chief Accounting Officer of your Quicken file, not the broker.

In the case of stock splits they generally send you an "Added" transaction for the additional shares as opposed to kicking off a StkSplit action transaction.  The StkSplit action is Quiken's proper and automatic way of handling this situation.  So in this case you'd need to delete the transactions downloaded from the broker and manually enter a transaction using the StkSplit action.  That launches a Quicken wizard that elicits the necessary information - name of stock and split ratio - and you end up with the correct number of post-split shares with the proper basis.

As far as bond maturities go, I'm not sure exactly what transaction(s) a broker might be sending to you, (I've had individual bonds in my Accounts in the past but that's so long ago I can't remember what sort of transactions were sent by the brokers), but, like the stock split, if the transaction(s) doesn't result in the correct accounting, you need to delete what the broker has sent you and make a proper entry on your own.  The proper accounting for a maturing bond is a SellBond action.  You "sell" the bond with a proceeds amount equal to the face value of the bond, and recognize any gain or loss as the case might be.