You have two options depending upon which version of the stock gift and securities module you have. To start:
  1. Go to File Maintenance > Gift Security Inventory Maintenance
  2. Corporate Actions
  3. There are possibly two options you can choose:
    • Security Dividends
    • Dividend - Interest or Capital Gain
  4. If only one is available, you have no choice and will use that one.  If both are available, you need to know the ramifications of the choice.

Security Dividends:
  • Creates a new position record
  • Creates a position transaction record
  • Creates a stepped up basis so subsequent sale calculates the proceeds correctly.

Dividend - Interest or Capital Gain Dist.:
  • Uses an existing Position and adds shares
  • Creates a position transaction record associated with original position
  • Basis is currently not stepped up and the journals resulting from the sale need adjustment before posting.  This is a known bug that will be fixed. ( Exists in version 14.2 and earlier for certain)
Depending upon the type of reporting you do in this module you might have a preference for increased shares vs. increased lots or positions.

From an accounting perspective, as long as you adjust the proceeds for the stepped up basis, the ultimate results are the same.