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Joe Craig
Ellicott City, MD
StockCentral Administrator

05/15/2007 11:14 AM
If you have questions that you would like Gene Rooks to tackle in her upcoming workshop, just reply to this message and ask your questions. Gene will begin the workshop, answer questions, and discuss the answers beginning June 4.

Joe

Margaret Larson

05/16/2007 11:11 PM
What is the difference between Club acctg 3, on line acctg and bivio.com? I understand that Club acctg 3 is on a PC and that on-line acctg and bivio are "on-line" But, what are the advantages/disadvantages of each? The nuances? The costs? Thanks. Marge

Ronald Park

05/22/2007 1:02 PM
I switched from CA2 to online accounting about 15 months ago. The biggest reason for me is convenience. I can access our account from either home or my office. In addition, you can let other members access the account for reporting or just the latest status. You can upload files and make them available for other members. That's where I store minutes, financial reports, bylaws, etc. All in the name of convenience. The cost is about the same as CA3, but next time we renew, I will switch to bivio, because the tax software is included.

Linda Johnson

05/22/2007 6:36 PM
The “website” aspect of the Online club acctg is exciting. We are keeping bylaws, blank forms, etc in the file storage. We are using the message area (because none of us have done much in the way of chats before) for the less “permanent” stuff like stock studies and portfolio reviews. Thank you for giving us this feature. We would like to upload our Toolkit SSGs so we can all come to club prepared to discuss it (wow!) My question: It is awkward to save a SSG somewhere on my hard drive (no more floppy drive) so I can find it so I can then upload it to OCA. For me it is awkward…for some of my members this is real close to impossible. How do you suggest we save the SSG so we can attach it to an email? Thanks! Ladimom

Anna Marie Kephart

05/23/2007 8:47 PM
We are in a situation where 2 members are withdrawing at the same time. Our portfolio currently has all "winners"! Is it best to transfer shares to the withdrawing members, and should we look at the companies that are yielding a 97% return to pass on. Would the withdrawing members be responsible for the entire capital gains, or would the cost basis for them start on the day of transfer? And are we correct is assuming we (the club) would have no tax liability on the transfer of the shares instead of cash? Thanks! CIC Club Treasurer

Helen Philbin

05/23/2007 10:13 PM
My broker deducts part of a dividend for Foreign Tax. If I enter it as a Foreign tax paid by a company, the amount of the tax remains as a credit at the brokerage house on my valuation statement. If I deduct it as an expense, it is deducted from the brokerage account but does not reflect as a tax paid when I do the year end tax return. How do you handle this entry? Thank you, Helen

Jonathan Schrag

05/24/2007 9:30 AM
I just recently became assistant Treas for our club. I'm trying to find ways of moving us from CA3 to bivio; however, our Treasurer seems resistant to this. (This is not a Psychology question!) When I exported our club data to bivio for the trial period (beginning in December), everything seemed to go well. However, after a few weeks, I noticed that the unit values were calculating differently in Bivio than they were in CA3!! Why?! The other issue I have with CA3, is that it runs SO slow on my three year old computer!! Why is it such a resource hog that the user is almost forced to keep buying hardware?! This makes CA3 even MORE expensive to use and Bivio/web-based programs more attractive! Is there a way to I was hoping to run them both concurrantly to allow the Treasurer to learn the benefits of web based accounting, and maybe fully switch! At the very least I hoped that this dual path would allow an almost painless way for me to keep our records on the web, while he kept using CA3. However, with this disparity I will not be able to use them interchangeably. Instead, it only adds fuel to the fire of keeping on with the pokey CA3 and abandoning all hope of using a web-based program! :-( Jonathan

Dave Forgianni

05/24/2007 2:07 PM
Hi Jonathan, Since Gene's workshop isn't scheduled to begin for a while I thought I'd let you know that you can exchange data between CA3 and MyIclub.com. You can sign up for a free 60 day trial and import your current CA3 data. The data should be identical to that which you see in CA3, and Valuations and Units are handled the same way at myiclub.com as in CA3. We at ICLUBcentral make both products, thus they are designed to be completely compatible. Good luck and please let us know any questions, thanks! Dave Forgianni Product Manager ICLUBcentral Inc.

JAMES THOMAS

05/25/2007 3:01 PM
> However, after a few weeks, I noticed that the unit values were calculating differently in Bivio than they were in CA3!! Why?! < Unit values are calculated in exactly the same way in bivio and CA3. If you're seeing different results, it's very likely because you haven't entered identical transactions in both products. Or, you haven't used identical valuation dates. Or, the stock prices used automatically by bivio and CA3 for valuation dates aren't quite exactly the same. Closing stock prices from multiple reliable sources are not always exactly the same (there is no "right" answer). Minor differences because of this are no cause for concern. To start understanding why there are differences, I'd suggest printing valuation reports from both bivio and CA3 for your official valuation dates since exporting your data to bivio. Look to see whether the dollar value of the club is identical on the valuation reports from both bivio and CA3. If not, then you can investigate the cause of the difference.

Gene Rooks
Gotha, FL (W. of Orlando)

06/02/2007 4:23 PM
Treasurers' Questions Workshop will begin Monday, June 4th! I see you already have raised some interesting topics, please post more! The IClub Gazeeter reporter alluded to some matters of import that needed discussion, I will deal with one here, just to get things started. He issued a challenge: Is a peanut a pea or a nut? Any good Southerner can tell you a peanut ain't a nut, it doesn't grow on a tree! It's a goober, of course

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Karen OBoyle
Denver, Colorado

06/02/2007 4:42 PM
Please explain the difference between the Compound Annual Return and the All-Inclusive Club Return on the Valuation Statement. The all-inclusive club return is always the smaller number. Another number is on the Member Status Report Page and the CA Return is yet a different number. Thanks Karen

Karen OBoyle

JAMES THOMAS

06/02/2007 5:46 PM
> Please explain the difference between the Compound Annual Return and the All-Inclusive Club Return on the Valuation Statement. < Both are Compound Annual Return (CAR) values. The one on the "Total This Date" line includes only securities currently held by the club (those listed on the Valuation Statement). Cash is also not included. The one on the "All-inclusive Club Return" line accounts for all securities ever held by the club (during the time period covered by the report) as well as cash. > The all-inclusive club return is always the smaller number. < Not always. But that may be true for your club. > Another number is on the Member Status Report Page and the CA Return is yet a different number. < As far as I know, the CAR value on the "Total" line of the Member Status Report should be the same as the CAR value on the All-inclusive Club Return line of the Valuation Statement. Assuming, of course, that both reports cover the same time period. -Jim Thomas

Karen OBoyle
Denver, Colorado

06/02/2007 9:30 PM
Thanks Jim - now I understand. One more question, this is a BI club - so where is annual BI dues accounted for? Is that also reflected in the 'all inclusive' but not in the 'total this date" line? Thanks for your help Karen

Karen OBoyle

JAMES THOMAS

06/03/2007 12:23 AM
> One more question, this is a BI club - so where is annual BI dues accounted for? Is that also reflected in the 'all inclusive' but not in the 'total this date" line? < OK, one more answer. I'll let Gene handle any further questions starting on Monday. That's correct. Any sort of expenses or fees are accounted for in the "All-inclusive" CAR but not in the "Total This Date" (current securities only) CAR. -Jim Thomas

Patricia Michalski

06/03/2007 8:00 PM
Why does certain purchases of stock record as 65.00001 for instance when the purchase was of 65 shares of of 1.00 stock. (example) how do you correct it ? Pari

Gene Rooks
Gotha, FL (W. of Orlando)

06/04/2007 10:37 AM
Good morning, all. This week I will answer your club accounting questions, and also post some basic accounting guidelines. After this week, perhaps we can establish a forum under The Clubhouse for future questions and answers on club management and accounting. There were several questions about features of the various accounting programs available to clubs. Some answers have already been given, but here is my take: First and foremost, please DO use one of the available accounting programs. Some clubs begin with an Excel spreadsheet maintained by a knowledgeable member. In fact, long ago, I shudder to think of it, club accounts were kept in notebooks! I'm not saying it can't be done for a few months, but it surely can't be done with the speed and accuracy of a software program, nor is it a feasible option when time goes by, members come and go, and securities are bought and sold. Errors, sometimes drastically affecting the club percentages of your members, invariably creep in, as those who have helped clubs cross over from Excel or manual to software programs can attest to. Club accounting software comes in two versions, desktop, and online. Desktop was the first available, and is still used by many who want to have access to their data whether or not they are on the Internet. That is less and less a concern, as ISP's become faster and more reliable. Some clubs hesitate to use an online program for concerns about security and privacy. This is really a non-issue, though it is hard to convince some members. The online data is encrypted and secure from outside access, not searchable by Google, and available only to invited members. If some clubs are still hesitant, there is no need to include Social Security numbers, addresses, or even full names, though the treasurer will need to have enough posted to clearly identify members to the treasurer. The current desktop version is CA3, developed by IClub Central. They have provided club accounting programs for clubs since 1989. This program, as the online programs, uses the unit value system of accounting. When the computer is connected to the internet, prices for valuations can be imported at a click, they do not have to be manually entered. In addition to a multitude of reports useful to the club, beyond the standard Valuation Statement, Members Status, and Journal reports, CA3 can also produce graphs and pie charts illustrating club portfolio and member results, and distribution of assets. They also offer a separate Tax Printer updated each year that makes producing your club's 1065 and Member K-1's about a five click process, taking no more time than what it takes for your printer to spit out the finished product, ready for distribution and mailing. You can purchase, or request a free trial, of CA3 through the StockCentral link under the Tools>Discounts tab at present, or at IClub's website at http://www.iclub.com/store/clubaccounting.aspx Cost is $189.99 for StockCentral members. It can also be purchased at the BI store website for $219.99. This is getting long, I will enter a separate post tomorrow comparing the two online programs, CAO and bivio.

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Gene Rooks
Gotha, FL (W. of Orlando)

06/04/2007 11:18 AM
Annie Marie Kephart asked about transferring stock to withdrawing members. This is an attractive option as it defers, but does not eliminate, the capital gain on that security for the remaining members until they withdraw, when it is included as part of their realized gain in the club. You would have no tax liability the year it is transferred, but you will eventually. If the stock is sold instead, the capital gain will be allocated the year it is sold. You aren't pre-paying tax if you sell, you are simply passing up an opportunity to defer the tax. This deferment of the tax liability may or may not make any significant difference to your club members, so my advice would be to do what is best for the portfolio. I would suggest choosing an appreciated stock to transfer (or sell) that is best for the overall remaining portfolio. You could have too much of a good thing, this would help reduce that overexposure. Or, one of the stocks, while showing a good gain, may not be likely according to your SSG studies to continue yielding a high return. Tax liability is deferred for the member leaving until they sell the stock in question. Their cost basis in the transferred stock is recalculated upon withdrawal for them, and will be shown on their withdrawal report. The cost basis of the shares in the hands of the departing member is equal to that member's total basis (PIPE) in the club, less any cash distributed at the time of withdrawal. The member's PIPE basis in the club is adjusted as of the date of the withdrawal to include the year to date allocation.

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Gene Rooks
Gotha, FL (W. of Orlando)

06/05/2007 11:56 AM
Yesterday we hit the high spots on CA3, the desktop club accounting program. More and more clubs are turning to online club accounting, which is available from two sources, IClubcentral with their Club Accounting Online (CAO), and bivio. Both of them are based on the unit value system endorsed by NAIC/BI. Entry screens and reports from all three programs are very similar. The best advantage, in my opinion, is that online club accounting programs allow for participation by all club members. We dealt yesterday with the non-issue of security concerns. It makes it very easy to have a co-treasurer to train who can be allowed the same access you have to make entries and create reports. Even if they are just learning, you can oversee, and correct, if necessary. But no one else in the club can make entries that you do not authorize, as the administrator of the account. All members of the club who will take the moment necessary to sign up with a private password, can access the club's website, view, and print out their own monthly reports, or any other report they are interested in seeing. These programs allow for file storage of documents and forms important to the club, educational or investing material, which any member can print out. They also have group Email service to your members. One disadvantage to online programs is that if your ISP occasionally goes kaflooey, so does access to your data until you are back online. But this is offset in that no matter what happens to your personal computer or hard drive, your data is always right where you left it online. Actually, for a small additional charge, you can have CA3 desktop and CAO online, and the databases are interchangeable. This might answer Jonathan Schrag's question, I hope he will give CAO a free trial using his CA3 database, to solve his problem with space requirements. I am most familiar with IClub's product, Club Accounting Online, as that is what our club has used for years, but I have also run our data with bivio for a trial period. Each product has their devotees, and neither is a bad choice, but there are some differences. In CAO, the treasurer runs an official valuation once a month (or should ), and all member transactions automatically revert to the latest saved valuation for unit values. In bivio, valuations and unit values change daily, so the treasurer needs to input the club's official date for all member transactions, as called for in their PA. Club Accounting Online (CAO), Myiclub.com, is part of the overall suite of accounting and investing products and services that IClub offers, including StockCentral, which is where you are reading this. Any club member can link on to StockCentral from the myiclub website of CAO by clicking on the blue icon next to the stock symbol on the Club home page. This will take you to a jump-off page for research information on that security through Yahoo, Reuters, or Google, or into StockCentral if you are registered to use the TakeStock feature, get an updated company data sheet or enter any of the discussion forums. Any member can enter tickers on a Watch List to follow the price, and there is a calendar to enter upcoming meetings or training events. Bivio, another independent supplier recently allied with BI, only offers online accounting. They do have forums for questions. You can enter all of your own data, as in CAO, but their program also offers a popular feature, a link with certain brokers, AccountSynch, which automatically downloads broker transactions into your accounting data, including ex-dividend dates. It does not identify member deposits, and there are some transactions, like Foreign Tax, that it will not pick up, so the treasurer does need to remain vigilant to see that all transactions get properly entered each month. Of course, I urge all treasurers, regardless of the program they use, to balance their cash and number of securities on hand against their broker every month, to catch discrepancies when they are easy to spot and correct. Between the two of them, I prefer the look and conciseness of CAO reports over bivio's, and there is a wider choice of reports. I also prefer the control of making my own entries, even with the availability of some broker downloads. You can take a free trial of Club Accounting Online at http://www.iclub.com/products/p_accounting.asp $59.99 annual (separate Tax Printer available) for Stock Central Members You can take a free trial of bivio at https://www.bivio.com/index.html $99.00 annual (includes tax printer)

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Gene Rooks
Gotha, FL (W. of Orlando)

06/05/2007 12:07 PM
Helen Philbin asks about the proper way to show Foreign Tax in the accounting programs. This does have a tendency to confuse people, as it requires two entries, to equal the total dividend paid by the company, which is more than the cash amount received or reinvested. Let's assume your company based overseas pays a $10.00 dividend on your holdings, but they retain $1.00 for tax in their country. Your broker receives $9 which he credits you for cash, or reinvests, according to your setup with him. He should list at the time the amount of foreign tax withheld, or at least list it on his month end statement. You should make your usual Securities dividend entry for the $9.00. Then using the Foreign Tax screen under Securities, make another entry for the $1.00 they kept. At the end of the year, the program combines the two for your total reportable dividend, but also gives you the offsetting credit for the amount withheld. This keeps your cash in balance, and your dividend reporting accurate as well.

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Gene Rooks
Gotha, FL (W. of Orlando)

06/05/2007 12:36 PM
Linda Johnson wants to know how to save SSG's so she can find them to upload to the CAO File Storage section or attach to Email. This is an open forum, and there may be better ways than what I use, if so, someone else please chime in. From Toolkit, with the chosen company open, choose the Export function under the File Menu. You are then given a browse screen to select where you want to save that particular SSG. I choose to put it on Desktop, but you can choose any location you can get back to. From CAO File Storage, click on Add file, again, you get a browse screen to find it, so just go where you put it, locate and click on that SSG. In the next field, enter a name for your file, probably just the stock symbol, then in the last field scroll to the File directory folder you want it in. Then click Upload. Your members can then open their ToolKit and import that file into their program from the CAO File Storage location. You can use the same Export process to save an SSG or ITK file from Toolkit to then locate and insert in an Email.

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Gene Rooks
Gotha, FL (W. of Orlando)

06/05/2007 1:25 PM
Patricia Michalski has a mystery decimal in share amounts on a purchase. It would help to know which program you used, and what the precise figures were, please let me have that info to verify the problem. In general, you can keep stock shares correct when entering purchases by NOT entering a per share price, even if there is a field for it. Enter as bought the exact number of shares you bought, according to your broker. Then enter your commission, and the total amount the broker received, including this commission. The per share price will pop in on its own, and if there are any stray decimals, they will appear there, where they are immaterial. Try editing the sale and leaving out the per share price to see if that corrects it.

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Gene Rooks
Gotha, FL (W. of Orlando)

06/06/2007 1:11 PM
One of the issues that pops up over and over again on the Club Treasurers list concerns how to pay for expenses, and how to allocate expenses. Some clubs try to keep expenses out of their bookkeeping, so their investment results are not impacted by expenses. Or, they assess separate fees to cover the expenses for the same purpose. All of these practices are unnecessary, and sometimes seriously impact member percentages and unit values. There are other legitimate expenses involved in building a portfolio for the club than the expected broker fees. The mutual funds you buy into certainly have them, and so does an investment club. They are part of the cost of investing, and can be deducted as such on your income taxes, using the IRS guidelines for doing so. The more common of these for clubs are accounting software and maintenance fees, office supplies, printer costs and postage, educational materials, and club and individual membership fees if you are a BI club. All of these are tax-deductible. Since expenses for such items are an expected cost for the educational and investing purposes of the club, there is no reason not to include them in the accounting, so proper income tax allocations can be made for your members to deduct them. There is also no reason not to pay for these items out of the regular funds from monthly contributions members make. Keep in mind that whether you include these items in club accounting or not, if the money comes out of the members' pockets, it is an expense to them, however it is handled, so it is better to have it documented in the accounting. Sometimes a club has expenses that are strictly social or hospitality oriented. They can still be paid out of club funds if circumstances warrant, but they are marked non-deductible. Extra assessments are not required, unless some extra contributions are needed to provide cash in the checking account at a particular time. Those contributions should be posted as regular payment for the members who choose to put more in at that time which will buy them units. One thing you should NOT do is post this extra money as fees which do not buy units, but do raise slightly the value of all units. This is no benefit for the person paying. Petty Cash? Forget you know the term, is my advice. Thankfully, it is no longer an option in the software separate from the regular bookkeeping. While you could still name a cash account Petty Cash, there is really no point in doing so. Accounting reports already separate and total expense items for review. No need to complicate the bookkeeping. If you want to buy some pizza and soda/beer/margaritas for attending members, pass the hat just for that item, it is not a necessary club expense, nor should it involve members not present in any way. This pretty much covers questions about the club funding expenses, next we will look at allocating these expenses to the members.

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Gene Rooks
Gotha, FL (W. of Orlando)

06/06/2007 1:20 PM
The next question that arises is, how do you allocate club expenses in Club Accounting? There are two options, By Ownership Share, or By Member/Equal Allocation. The default, standard pratice, and IRS expectation is By Ownership Share. This is also how mutual funds allocate their overhead expenses. This is my recommendation for clubs to follow. If this is not how your club is going to do it, after considering all the aspects, your Partnership Agreement has to spell out the variance. Allocating By Ownership Share reduces the value of all units by the same amount, but nobody loses any units. Larger share owners get a larger deduction at the end of the year, to offset their larger participation in the cost of the expense. Yes, this is truly fair. But wait, some will say, we think expenses should be spread evenly among the members, since all members share the benefits, right? No, though it may seem so at first blush. Early in a clubs history, when expenses are largest, most members are usually pretty equal in their contributions. When you allocate By Ownership Share, everyone does come out about the same, anyhow, so there is no need to change the allocation to equal by member. Keep in mind that allocating By Member removes the same number of units from each member. Where that really gets unfair is later, when some members own up to 10% of the club, and maybe have 100 units. A new member who joined a couple of months ago may only have 10 units. If you assess a large expense By Member, each of them could lose, let us say, 2 units. That is only 2% of his units that the long time member loses, but it is 20% of the newer members stake in the club. Now, that isn't fair. If you still want everyone to put in the same amount of extra money for some purchase, that is fine, but only if that money is posted as payment to buy them units, not posted as fees, and that you allocate the expense By Ownership Share, wherein no one loses units. This still works out even if everyone doesn't have the extra money to put in. They don't get more units, but do still share in the expense according to their membership in the club. The others do also, but they have more units now. What about the non-deductible items, like flowers for a member in the hospital, or a group dinner out? You can pay through the club, and allocate By Member on that sort of deal, but only if every member takes part in the benefit, like the dinner. Otherwise, those not benefitting are going to lose units, in which case it would be better if everyone paid their own. If any of this doesn't quite make sense to you, please write for more clarification, or any other accounting questions you have.

Gene Rooks, Director Space Coast Chapter Accounting Instructor

Minette Curnutt

06/06/2007 6:07 PM
If the method of showing assessments for expenses are entered in as fees in the past, do you believe this should be all corrected. Should all the past assessments for expenses be corrected in the past. If so, should it be corrected for all the current members, no matter how far back you go??

Gene Rooks

06/06/2007 7:31 PM
Minette, do not adjust anything in previous tax years. That is water under the bridge, and you don't want to change units and allocations already closed out for the year. You can go back to January, and edit transactions for this year to reflect your club's current choices, both on funds collected, to post as payments, and expenses, to allocate by membership share. This will of course change previously distributed Valuation and Member Status reports for this year, but the new ones will be correct and will take precedence. I would make fresh copies for my treasurer's notebook, and keep them both, with notes, but as for members, just give them a new one for June that reflects any adjustments. Thanks for writing. Gene Rooks generooks@cfl.rr.com

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