Vodaphone (VOD) reverse split and distribution to Verizon shares (VZ)

What's the best way to account for this activity in Quicken?

Start with 140 shares of VOD

Reverse split yields 76 shares VOD

"Distribution spinoff from VOD"  yields 36 shares of VZ

I've done a reverse split transaction in Quicken fir VOD and a 'Shares added' transaction for my new VZ shares, but it just doesn't seem right to me.  Is there a better way to account for this?


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This transaction involves payments for fractional shares, the amounts of which (per share) we do not yet know (as of Feb 24).  This is in addition to the $4.928005 cash per old share of Vodafone that is part of the "Return of Value" (that is, a return from Vodafone to its shareholders of a substantial portion of what Verizon paid to Vodafone for Verizon Wireless), which has not yet been distributed to the VOD shareholders.  There will be cash payments for the fractional shares resulting from the Vodafone reverse split and for fractional shares resulting from the distribution of Verizon shares.  Each old share of VOD was entitled to receive 0.263001 shares of VZ, so in your case you will have a cash payment in lieu of 0.82014 shares of VZ.  (140 shares VOD x 0.263001 = 36.82014)  For the VOD reverse split, which was 6 - for - 11, you will have a cash payment in lieu of 0.3636 shares of VOD (140 shares of VOD x 6/11 = 76.3636).

What I have done in Quicken is to do the reverse split to record the correct number of whole shares of VOD, and then I entered a sale transaction for the fractional share of VOD using a per-share price that I selected based on the Feb. 24 closing price of VOD.  (When you receive cash in lieu of a fractional share, if it's in a taxable account, I believe it is treated as having a short-term holding period.)   When I know the actual amount, I will go back and edit that transaction.  I treated the Verizon shares that I received as "Shares Added" -- this allows you to add shares to an account without affecting the cash balance -- and for the cost I used a per-share price based on today's closing price for VZ.  Once I know the actual cost basis assigned to these shares (from my broker's website display of my account), I will go back and edit that amount.

The only thing I'm not sure of how to do is to adjust the cost basis of my VOD shares to reflect the correct amount that I will get from my broker's website.  Normally, in a plain vanilla stock split, while the number of shares changes, and thus the per-share cost basis will change, the aggregate cost basis doesn't change.  But in the VOD situation, the aggregate cost basis will change.

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