Why does Kudocs require recent transactions to be added in chronological order?
This note explains why it is important to add recent transactions to Kudocs in chronological order. You do not need to worry about this when adding historic transactions.
Kudocs recalculates share balances after each transaction is added to the system to ensure that shareholders, shareholdings and share capital are always correct. If you try to add share transactions out of order, the calculations may not be correct.
Example 1:
- Company issues 100 ordinary shares to A on 1 January.
- B transfers 500 shares to A on 1 February, so A now has 600 ordinary shares.
- A transfers 400 shares to C on 1 March.
All of these transactions are recorded in Kudocs on the same day.
If you try to record the transfer of -400 shares A > C before the transfer of +500 B > A the system will prevent you as A does not have enough shares to transfer. You need to add the transactions in the correct chronological order so that the total shareholdings are correct.
Example 2:
- A starts with 100 shares; B starts with 5 shares.
- A transfers 25 shares to B on 1 July.
- These transactions are recorded in Kudocs on the same day in August. Kudocs calculates the individual totals so that A has 75 shares and B has 30 shares.
If a few days later you were to record a subdivision of shares (100 > 1,000) that happened in June (ie that pre-dated the transfer that you have already recorded), the system would be required to decide whether the 25 shares that were transferred in July should be left as 25 or retrospectively subdivided: does A now have 750 (1,000 – 250) or 975 (1,000 – 25) shares? etc. Kudocs cannot determine that, which is why it is important that you add transactions to Kudocs in chronological order.