Do you keep your restricted securities separate from your moving average costs until the hold period has expired?
Your moving average costs in a security should be calculated using free trading securities.
If you purchase a security that is subject to a hold period, record the restricted securities separate from your free trading security until the hold period has expired. Once expired, recalculate your moving average to include the newly released security into your existing inventory.
For example: If you have 50,000 ABC Inc. in your existing inventory at a moving average cost of $0.50 and you purchase another 50,000 ABC Inc. at a price of $1.00, which is subject to a hold period, do not calculate this security into the exisiting free trading stock until the hold period has expired. After the hold period expires recalculate the cost of ABC Inc. into the existing inventory and you will now have 100,000 ABC Inc. at an moving average cost of $0.75.
This information is provided as an information service only and is not intended to substitute for competent professional advice. No action should be initiated without consulting a professional advisor.