Occasionally, due to brokerage or mutual fund error, an account is incorrectly credited with or debited for shares or money. Correcting transactions are usually made immediately, but sometimes are made months after the original error transaction. There are two approaches that you can follow to handle these error transactions and their corrections in Captools:

 

Reversal Transactions - Under this approach, you essentially replicate all transactions as reported to you by the broker/dealer or mutual fund. Once an error is detected, the broker/dealer or mutual fund will usually issue "reversal" transactions.

 

These are either "complete" reversals which cancel the original errant transactions, and replace them with a corrected transaction.  Or they are "partial" reversals which are intended to correct errors in share quantities or money amounts, but which cannot correct security or date errors.

 

Reversal transactions are entered in Captools/net by specifying "Rev" in the tax lot field.  This reverses share and amount signs from their usual polarity. For example, Captools BUY transactions have positive quantities and negative amounts.  Therefore, a "reverse" BUY transaction has negative quantities and positive amounts.  The following is an example of transactions wherein a share purchase which should not have been executed, is corrected by entering a reversal transaction:

 

 

In order to enter "Rev" in the Lot field for transactions which normally do not accept editing of this field, enter the notation "*Reversal*" as part of the description (or set the "No Sign Calc" flag, available in the custom transaction view).  Once the "Rev" is in the Lot field the Description field can be modified, if you wish to remove the "*Reversal* notation.

 

Correct Transactions - An easier way to handle error corrections, is to simply not record transactions made in error, but rather to record only the correct transactions as they should have occurred. If you are particular about things like audit trails, you may additionally employ "memo" (MMO) transactions to enter a record detailing the error events. This approach is superior to the "reversal" method in that it does not affect value or performance figures.