Soz for reviving old threads, but I found this AMIT adjustment issue super confusing until I came across this explanation. Anyway, I've done my calculation and I think it all looks in order, so thanks for OP for posting, and marty and deborah for their advice.
One more question however! The AMIT cost base net amount (excess or shortfall) for each financial year, is given as a lump sum amount. When you apportion that amount according to the shares you've owned in that year, I'm assuming it means all shares you've owned in all previous years and haven't disposed of. So yu will adjust the cost base for each parcel of shares you've accumulated over the years, going back to Year 0. Which means you'd need to adjust the previously adjusted price? Again and again throughout the years? It seems relatively straightforward once I've thought it through, although it does result in mean a rather long spreadsheet the way I've formatted it, if you were to hold for several decades.
Not sure if my description makes sense, so I've set out a 3 year scenario below to flesh out my question, and the way I think that the adjustment is accounted for. I've simplified the figures with a constant $1 share price. I've also included a calculation of the per share adjustment amount (Adjustment amount / units held = per share adjustment amount).
Year 1 - Buy 100 shares @ $1 each. Total shares = 100.
Adjustment amount = $5. Adjust by 5c after Year 1 (i.e. $5 / 100 = 5c).
- Adjusted cost base is $1.05
Year 2 - Buy 100 shares @ $1 each. Total shares = 200.
Adjustment amount = $14. Adjust by 7c after Year 2 (i.e. $7 / 200 = 7c).
- 100 shares (bought in Yr 1) - Adjusted cost base is $1.12 (1.05 + 7c)
- 100 shares (bought in Yr 2) - Adjusted cost base is $1.07 ($1 + 7c)
Year 3 - Buy 100 shares @ $1 each. Total shares = 300.
Adjustment amount = $12. Adjust by 4c after Year 3 (i.e. $12 / 300 = 4c).
- 100 shares (bought in Yr 1) - Adjusted cost base is $1.16 (1.12 + 4c)
- 100 shares (bought in Yr 2) - Adjusted cost base is $1.11 ($1.07 + 4c)
- 100 shares (bought in Yr 3) - Adjusted cost base is $1.04 ($1 + 4c)
I imagine if you sell out your entire holding you can just add the lump sum AMIT adjustment amounts to your cost base and don't necessarily need to apportion it to each share. But if you were to sell specific parcels over time, is the above the way you'd keep track of the adjusted cost base? Would appreciate your thoughts as always!