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Investment Clubs Manual052 - October 2008 KEEPING ACCOUNT...

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Unformatted text preview: October 2008 KEEPING ACCOUNT The Unit Valuation System (UVS) was explained briefly earlier, and the broad principles should be understood by all members. But the general accounting work inevitably falls on the shoulders of the club treasurer. This section aims to give a simple step-by—step guide through unit system accounting. To many, the keeping of accounting records appears, at first glance. to be a formidable task. This need not be so, even for those with no previous experience.This section is designed to dispel any fears about the complexity or difficulty of compiling the required records. As with many other recommendations in this Manual, your club is not obliged to follow these systemthere Is no reason why a club cannot adopt an accounting method of Its own choosing. However, whichever method you select should be applied consistently and over the long term. it should be central to the operation that every member is treated fairly and openly and the accounting method should reflect this intent. The two systems commonly used by investment clubs are the proportional system and the Unit Valuation System (UVS). To operate the many variations of the proportional system satisfactorily, a full understanding of accountancy techniques is desirable if not essential. The proportional system relates to the normal method of keeping partnership accounts. PIC is not giving it the kiss of death but in general its use can only be recommended to clubs which employ, or have a member who is, an experienced accountant acting as treasurer. Such a person will not require detailed guidance. The unit system is the one dealt with in detail here because it Is the accounting method strongly recommended by PIC. ProShare Investment Club THE MANUAL ...
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