accounting for stock trades

[Derek Atkins]

Read my text: IMHO there IS NO SPLIT THAT REPRESENTS THE GAIN/LOSS.
The gain/loss is COMPUTED, based on the DIFFERENCE between purchases
and sales of a commodity LOT.  The lot is balanced when the number of
shares hit zero.  The gain/loss is the sum of the VALUES of all the
splits.

For example, if a lot contains the following three splits:

Amount(Shares)  Value
 50             500
-20             -400
-30             -150

You will notice two things.
1) this lot is "closed" (it has an amount balance of zero)
2) you can compute the loss(gain) as the sum of the values: 500-400-150 = 50 gain

You don't need a "balancing" split -- there is nothing to balance.
And no, I do NOT believe that you should have a single, unbalanced
split to denote losses or gains.

-derek

"Phillip Shelton" <shelton@usq.edu.au> writes:

> That still does not address where the balancing entry for the gain/loss is put. (At least it does not do it for me.)  And I thought that was the point of double entry accounting.  I will admit I am very new to the field of making money.
> 
> Maybe, (And you would lean toward this, Derek?) capital gain is allowed to be "unbalanced"? The balancing entry is the reduction of the "hard" asset.
> 
> -----Original Message-----
> The bug (IMHO) is that gnucash is not tying the purchases to the sales
> in order to compute the gain/loss.  I'm not _AS_ convinced that the
> gain/loss MUST imply a split to an income/expense account.
> 
> -derek
> 
> "Phillip Shelton" <shelton@usq.edu.au> writes:
> 
> > Is it a bug then that the gain is currently un-balanceable?
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-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
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