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Spinoff of Corteva (CTVA) from DowDupont (DWDP)

Explanation

DowDupont spun off Corteva (CTVA). DowDupont is considered the parent company. DowDuPont had a reverse split and name change immediately after the spinoff.

This action will need multiple entries in the accounting software.  The information below is based on the information available from the now DuPont de Nemours (formerly DowDuPont) website. A spinoff entry will be needed to record this transaction and a reverse split for DWDP. Then a merger can be entered to reflect the name and ticker symbol change from DowDuPont (DWDP) to DuPont de Nemours (DD).

The remaining basis percentage was calculated using the average of the opening and closing prices of DD and CTVA on the first trading day after the transactions, June 3, 2019. A form 8937 for this spinoff was not available on the DuPont website when these instructions were written.

 

The Spinoff Entry

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: https://www.iclub.com/support/kb/default.asp?page=normal_spinoff

Here is the information you need to complete the spinoff.

  • Date: 6/1/2019
  • Select Parent Security (or Parent Company) DowDupont (DWDP)
  • Remaining Basis Percentage: 73.41
  • Cash received:  See your broker statement for cash-in-lieu received
  • Spinoff  Security (or Symbol of New Company) : Corteva (CTVA)
  • Shares received : .3333 x (#of DWDP shares owned)   (Remember to include fractional shares.)
    • For example, if you owned 100 DWDP shares, you should receive .3333 x 100 = 33.33 CTVA shares. Remember to use the # of DWDP shares owned BEFORE the reverse split.
  • Price Per Share : 25.675 (Average of opening and closing price on 6/3/2019)

Save the transaction and this spinoff has been entered.

 

The Reverse Split Entry

Go to Transactions > Stock Split  or Accounting > Securities > Stock split depending on the version of the software being used.

Here is the information you need to complete the reverse split. Enter this transaction after the spinoff transaction.

  • Date: 6/2/2019
  • Security : DowDupont (DWDP)
  • Split Ratio :   1 for 3
  • Cash for Fractional Share :  See  your broker statement. Do not confuse the amount with the cash received for fractional shares in the spinoff described above.

Save the transaction and the reverse split has been entered.

 

The Change From DWDP to DD

While DWDP and DD are the same company with just a different name and ticker, you can enter a merger to reflect the change-over

Go to Transactions > Merger  or Accounting > Securities > Merger depending on the accounting system being used.

Here is the information to complete the merger. Enter this transaction after the reverse split transaction.

  • Date: 6/3/2019
  • Old Security : DowDupont (DWDP)
  • Old Security Price per share: 76.1
  • New Company: DuPont de Nemours (DD)
  • Shares received:   However many shares your club has of DD.
  • Price Per share for DD: 76.10
  • Cash for Fractional Share :  See  your broker statement. Do not confuse the amount with the cash received for fractional shares in the spinoff described above.

Save the transaction and the process is complete.