Lots in Account screen : Value sign

Alex Aycinena alex.aycinena at gmail.com
Thu Aug 25 13:21:51 EDT 2016

> ---------- Forwarded message ----------
> From: Linas Vepstas <linasvepstas at gmail.com>
> To: "Frank H. Ellenberger" <frank.h.ellenberger at gmail.com>, Geert
> Janssens <geert.gnucash at kobaltwit.be>
> Cc: GNUCASH devel <gnucash-devel at gnucash.org>
> Date: Wed, 24 Aug 2016 23:12:54 -0500
> Subject: Re: Re: Lots in Account screen : Value sign
> Wow... you're asking me to remember something from 12 years ago ...
> Here's my best guess: for a "lot", I had the mental model of starting with
> 100 of something ... e.g. 100 cans of paint, and then selling them off in
> dribs and drabs. Thus, the first entry, that opens the lot, has a sign that
> differs from all the others.  By definition, there can be only one such
> entry in the lot, -- by definition, all of the other entries must have the
> opposite sign. Lots can only shrink and get smaller.
> So -- I buy 100 cans of paint at $10 per can, then sell 20 at $15 a can,
> then sell 35 at $17 a can, then sell 45 at $12 a can, closing out the lot
> (forever, since all the paint in that lot is now gone).
> Lots could be shares of stock, could be cans of paint, cartons of milk
> marked by expiration date -- anything that is naturally counted in
> non-monetary units, and come in lots (i.e. you want to sell/use/drink the
> oldest milk first, so you really do want to track the date/lot-number).
> More abstractly, lots could be shipments to a customer, unfilled or
> partially filed orders, whatever --
> With this concept of a lot, its impossible to add more to the lot -- once
> opened, it can only be depleted.  Thus, the split that opens the lot is
> "special". By assumption, its the very first split; it doesn't really make
> sense for it to be any other. That is, I can't sell cans of paint that I
> don't yet have.  At least, that was the initial conception of how lots
> work.
For stocks, you could have selling short, that is, selling shares you don't
already own at a future date and then buying them at a future date to
deliver when due hoping to make money on a drop on their value. Not your
typical stock transaction, though.

> Now, we all have read the news about corporations that sell things before
> the customer takes delivery, leading to various accounting scandals. I
> suppose there are other legitimate uses of lots, which somehow get
> overdrawn before they are stocked up.  Or something.  But that got
> confusing to think about, and was not a part of the design.
> I'm not at all clear as to why payments or invoices are going through the
> lot system, other than maybe you bill someone $100 and they pay you in
> installments?  Ans so you want to match up the installments with the
> original invoice, until its paid off?  I guess that's a valid use of
> lots... If the sign is wrong for that special, first entry, then that's the
> fault of whomever opened that lot.
> --linas

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