SPINOFF: Xylem and Excelis from ITT

Issue:

How do I enter the spinoff of Xylem and Excelis from ITT?

Cause:

ITT spun off 2 new companies, Xylem and Excelis. The cost basis allocation information can be found through the ITT web site at:
http://www.itt.com/_docs/investors/2011-tax-basis-information.pdf

Resolution:

The best way to handle this in Club Accounting will be to make three entries:

1. A spinoff of Xylem from ITT
2. A spinoff of Excelis from ITT
3. A reverse split of ITT.

The First Spinoff
Go to Transactions > Spinoff or Accounting > Securities > Record spinoff of securities depending on the version of the software being used. If you are unfamiliar with spinoff transactions you can get help at this url:
http://www.iclub.com/support/kb/default.asp?page=normal_spinoff Here is the information you need to complete the spinoff.
Date: 10/30/2011
Select Parent Security (or Parent Company) : ITT
Remaining Basis Percentage: 42.39
Cash received: See your broker statement for cash-in-lieu received
Spinoff Security (or Symbol of New Company) : Xylem (XYL)
Shares received: 1 x (#of ITT shares owned) (Remember to include fractional shares.)
For example, if you owned 100 ITT shares, you should receive 1 x 100 = 100 XYLshares.
Price Per Share: 26.50
If you owned fractional shares of ITT, you will not receive fractional shares of XYL but be sure to enter the fractional portion in the shares received field and the cash received.
Save the transaction and the spinoff has been entered.

The Second Spinoff
Go to Transactions > Spinoff or Accounting > Securities > Record spinoff of securities depending on the version of the software being used. If you are unfamiliar with spinoff transactions you can get help at this url:
http://www.iclub.com/support/kb/default.asp?page=normal_spinoff Here is the information you need to complete the spinoff.
Date: 10/31/2011
Select Parent Security (or Parent Company) : ITT
Remaining Basis Percentage: 45.18
Cash received: See your broker statement for cash-in-lieu received
Spinoff Security (or Symbol of New Company) : Excelis (XLS)
Shares received: 1 x (#of ITT shares owned) (Remember to include fractional shares.)
For example, if you owned 100 ITT shares, you should receive 1 x 100 = 100 XLS shares.
Price Per Share: 11.23
If you owned fractional shares of ITT, you will not receive fractional shares of XLS but be sure to enter the fractional portion in the shares received field and the cash received.

The final cost basis allocation after all the spinoffs are entered should be near to the following:
Xylem – 57.61%
Excelis – 23.24%
ITT – 19.15%

The Reverse Split
Go to Transactions > Stock Split or Securities > Record spinoff of securities depending on the version of the software being used. If you are unfamiliar with stock split transactions you can get help at this url:
http://www.iclub.com/support/kb/default.asp?page=normal_split
Here is the information you need to complete the spinoff.
Enter this reverse split after the spinoff transactions.
Company : ITT
Date: 11/01/2011
Split ratio : 1 for 2 (Do not reverse the ratio or you will have more shares not less after the split)
Cash for fractional shares: Check your broker statement for cash-in-lieu received for this reverse split.