Need better documentation on using Lots [Was: Chapter 8 - investment accounts]

[David Carlson]

On 9/8/2015 1:08 AM, Philip Walden wrote:
> John Ralls wrote:
>>> On Sep 7, 2015, at 5:08 PM, Philip Walden <pcwalden at comcast.net> wrote:
>>>
>>> John Ralls wrote:
>>>>> On Sep 7, 2015, at 9:52 AM, Philip Walden <pcwalden at comcast.net>
>>>>> wrote:
>>>>>
>>>>> John Ralls wrote:
>>>>>>> On Sep 6, 2015, at 3:04 PM, Philip Walden <pcwalden at comcast.net>
>>>>>>> wrote:
>>>>>>>
>>>>>>>
>>>>>>> WRT the "Concepts of Lots", per the discussion below I want to
>>>>>>> use lots in my stock accounts, but the document "Lots
>>>>>>> Architecture & Implementation Overview" only talks about the
>>>>>>> concept and does not give many clues as to how one should use
>>>>>>> the View Lots... screen.
>>>>>>>
>>>>>>> For example, what does Scrub Account do? What does Scrub (a
>>>>>>> record) do? What does the Splits Free and Splits in Lots mean or
>>>>>>> do.
>>>>>>>
>>>>>>> I have experimented several times only to get confused as to
>>>>>>> what is happening and end up backing out the work for fear of
>>>>>>> going down a rat-hole and ruining my stock gain/loss reporting
>>>>>>> integrity.
>>>>>>>
>>>>>>> I sort of understand the concept, but how is it implemented in
>>>>>>> the View Lots... screen? I cannot find anything helpful in the
>>>>>>> tutorial.
>>>>>>>
>>>>>>> My particular circumstance is that I have many old stock
>>>>>>> holdings in several accounts with lot tracking done on paper.
>>>>>>> I'd like to get them into gnc if I can. So the "automatic"
>>>>>>> scrubbing and lot set up does not seem to work for me as I
>>>>>>> already have prior lot database I'd like to enter; and then it
>>>>>>> could be that I just do not understand the View Lots... screen
>>>>>>> and its nomenclature.
>>>>>>>
>>>>>>> Thanks in advance for any help or pointers
>>>>>> AS you probably know there are a variety of strategies for
>>>>>> grouping lots and for deciding which lot is the one you sold.
>>>>>> GnuCash supports exactly one: A lot consists of a single buy
>>>>>> transaction and sales are first-in, first-out. If that’s not what
>>>>>> you want, you have to handle all of it manually and ignore the
>>>>>> View Lots dialog.
>>>>>>
>>>>>> Regards,
>>>>>> John Ralls
>>>>> Hi John
>>>>>
>>>>> Thanks for your swift reply. I think FIFO will work for me, but I
>>>>> am having trouble translating the "Concepts of Lots", the only
>>>>> documentation that I can locate, to the "View Lots..." screen
>>>>> functionality. For example, the screen menu button "Scrub" and
>>>>> what it does is not documented as far as I can determine.
>>>>>
>>>>> I was hoping for some kind of tutorial/pointers about how the
>>>>> screen functions translate to the "Concepts of Lots". Maybe there
>>>>> isn't any?
>>>>>
>>>>> Also, you mention a "manual" method not using the "View Lots..."
>>>>> screen. I cannot seem to find any other method, manual or
>>>>> otherwise, for "Lots" anywhere in gnc.
>>>>>
>>>>> _
>>>> Philip,
>>>>
>>>> The original subject of the thread you hijacked was “Chapter 8 -
>>>> Investment accounts”. Have you studied that chapter?
>>>>
>>>> Chapter 8 of the guide is really titled “Investments”, and the
>>>> English version can be read online at
>>>> http://www.gnucash.org/docs/v2.6/C/gnucash-guide/chapter_invest.html.
>>>>
>>>> Regards,
>>>> John Ralls
>>> Hi John
>>>
>>> Yes I have studied  Chapter 8 intently, particularly the 8.7 Selling
>>> Stock section. There is no mention of the "View Lots..." screen
>>> anywhere in that chapter.
>>>
>>> The 8.7 section discusses manually creating a stock sell splits, but
>>> There is no mention of how to specify a lot associating the sale
>>> with a buy.
>>>
>>> So I am assuming there is no documentation documenting how to use
>>> the "View Lots..." screen.
>>>
>>> After some painful experimentation I have come up with a somewhat
>>> poor recipe to record lots and capture capital gains. The
>>> pain/poorness comes from trying to translate the "proceeds", "cost
>>> basis" and "gain/loss" from my broker account reports into the "sell
>>> price" and "commission" in gnc, such that the capital gains gets
>>> recorded correctly. However, I do not feel that is a gnc problem.
>>>
>>> I'd like to thank "Mike" in a previous post for the clues to figure
>>> it out.
>>>
>>> Here is the recipe I am going to use going ahead.
>>>
>>> 1. record buy of stocks with care to get accurate cost of shares.
>>> 2. Actions > View Lots...: Select the added stock purchase record,
>>> press create lot.
>>> 3. record sell of same stocks. Do not follow Chapter 8.7 as it
>>> includes the gain/loss in the split. The split should only have the
>>> proceeds to the asset account, the commission, and the
>>> shares-price-sale.
>>> 4. Actions > View Lots...: Select the lot with the stocks just sold.
>>> The "Splits in Lot should show the selected purchase. The Splits
>>> Free should show the sale just created.
>>> 5. Select the sale in the Splits Free window.
>>> 6. Press the >> button to associate the Sale with the Buy.
>>> 7. Close the View Lots window.
>>> 8. An Orphaned Gain record should have bee automatically created
>>> with, hopefully, the correct gain or loss amount. Edit the record to
>>> direct the gain/loss to the appropriate short or long capital gain
>>> account.
>> Philip,
>>
>> I meant to study Chapter 8 to understand how to do it manually. There
>> is no documentation on the View Lots dialog box. What’s more, I’ve
>> tried it a few times and found that it works well in simple cases and
>> less well when there are overlapping buys and sells — but I’ve only
>> tried it using the “Scrub Lots” button which does your steps 5 & 6
>> automatically. Since you seem to have worked out a semi-automatic
>> approach I suggest that you create a fake book and test it out in the
>> scenarios you expect. If it works consistently for you, great!
>>
>> Chapter 8.7 doesn’t include the gain in the split, it creates a new
>> split pair in the transaction. If you prefer a separate transaction
>> that’s OK, just create the splits as 8.7 explains in a new
>> transaction instead of in the sell one.
>>
>> Regards,
>> John Ralls
> Thanks John,
>
> Looks like I can do what I need by avoiding the "Scrub" button
> automation and just use the ">>" and "<<"" buttons to select sale
> transactions to a specific Lot-Buy. One buy per lot.
>
> When I use the above method, a separate Gain is recorded
> automatically. That is why I do not add one to the split within the sale.
>
> Again, thanks for your patience.
>
>
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Philip,

It is interesting that you have 'discovered' a part of the Show Lots
feature that had been lost due to lack of documentation.  I am curious
now how far that feature goes.

Does it zero out the value of the security asset account that held the
security before it was sold and generate an offsetting income or loss
value?  Does it also identify both the opening and closing commissions
and include them in the calculation?  If so, where does the offset go
for those commissions?  Would that go to a different income/expense
account or to an adjustment to retained earnings?  Does it work if the
original lot was partly sold on one date then the rest sold on another
date?.  Does it work if multiple lots are sold at the same time?

If it does some but not all those things, that should be documented too
and possibly used as a basis for a request to improve the functionality
of that feature. 

David C

Perhaps