default behavior of mutual fund accounts

[Bill Gribble]

On Thu, Jul 26, 2001 at 07:24:57PM -0500, Dale Alspach wrote:
> If I buy shares of a mutual fund, the fund tells me how many
> (fractional) shares I bought and at what price and the cost. Any
> roundings are devoured. The numbers they report to me are the same
> numbers that the IRS is going to get. So any calculation I do better
> use those exact numbers. Under Gnucash one of the three: shares,
> price per share or value is usually not going to agree with what the
> mutual fund says.

Mutual fund statements are pretty misleading from many brokers.  The
"price" they quote you is not what you actually paid for the
shares. Someone else will have to fill in the details, but it has to
do with the way the NAV is calculated and the update rate of mutual
fund quotes.  The discrepancy between reported price and
shares/dollars isn't a rounding error.  Try it on a calculator.  The
problem is that the price they are reporting is just different from
the one you paid.

The good news is that the price is irrelevant for both accounting and
tax purposes.  What matters is the number of shares you own and the
amount of money that you paid or received for them, which your broker
and your accounts must represent exactly.  Basis includes commission,
fees, etc.. it's the total amount you paid for the shares you
received, not the (generally fictional) "price" quote provided by the
broker.

Tag all the above with IMHO, IANAA, etc.  

b.g.