Example

A KEMID owns 100 shares of stock from a telecommunications firm (ABC). ABC decides to split off their West Coast Operations into a new entity (ABCW). Fifty percent of ABC stock is converted into ABCW stock. To record this information into the KEMID, a Corporate Reorganization transaction is entered using ABC as the From: security and ABCW as the To security. On the transaction lines, both the From and To lines indicate 50 transaction units. After this transaction is posted to the KEMID, the KEMIDís holdings of ABC show a reduction of 50 units and its holdings of ABCW show an increase of 50 units. The cost of the 50 units is transferred from the ABC holding to the ABCW holding for the KEMID.

More:

Corpus Adjustment