How do I enter the spinoff of ADT and Pentair from Tyco International?

Tyco International split the company into Tyco International, ADT and Pentair. Tyco International is considered the parent company.

The cost basis allocation information can be found on the Tyco web site at:

https://media.corporate-ir.net/media_files/irol/11/112348/TYC_Tax_Basis_Allocation_Information_for_the_September_28_2012_Distribution_of_Stock.pdf

Resolution:

This action is a standard spinoff transaction in the accounting software. The information below is based on the information available from the cost basis allocation information on the Tyco International web site. Because two companies were spun off in this transaction it is easier to split the transaction into 2 spinoff transactions.

The First Spinoff Entry

Go to Transactions > Spinoff or Accounting > Securities > Record spinoff of securities depending on the version of the software being used. If you are unfamiliar with spinoff transactions you can get help at this URL: https://www.iclub.com/support/kb/default.asppage=normal_spinoff

Here is the information you need to complete the spinoff.

Date: 9/28/2012

Select Parent Security (or Parent Company) : Tyco International (TYC)

Remaining Basis Percentage: 67.49

Cash received: See your broker statement for cash-in-lieu received

Spinoff Security (or Symbol of New Company) : ADT (ADT)

Shares received : .5 x (#of TYC shares owned) (Remember to include fractional shares.)

For example, if you owned 100 TYC shares, you should receive .5 x 100 = 50 ADT shares.

Price Per Share : 37.27 (ADT price)

Save the transaction and the ADT spinoff has been entered.

The Second Spinoff Entry

Here is the information you need to complete the spinoff.

Date: 9/29/2012

Select Parent Security (or Parent Company) : Tyco International (TYC)

Remaining Basis Percentage: 73.65

Cash received: See your broker statement for cash-in-lieu received

Spinoff Security (or Symbol of New Company) : Pentair, Inc. (PNR)

Shares received : .2399 x (#of TYC shares owned) (Remember to include fractional shares.)

For example, if you owned 100 TYC shares, you should receive .2399 x 100 = 23.99 PNR shares.

Price Per Share : 42.48 (PNR price)

Save the transaction and the spinoff has been entered.

At the end of the second spinoff the final cost basis allocation between the 3 companies should be as follows:

Tyco 49.71% ADT 32.51% Pentair, Inc. 17.78%

The figures used in this description of how to enter this spinoff have been rounded.