Stock transactions

Neil Jerram
13 Jul 2002 01:09:29 +0100

>>>>> "Dale" == Dale Alspach <> writes:

    Dale> This has been discussed on this list. Gnucash is cheating
    Dale> when it revalues assets by using the price editor. When the
    Dale> price (value) goes up the gain should be put into an
    Dale> unrealized gain income account.

I presume you mean that the money comes from this (unrealized gain
income) account.  Where does it go to?  I guess the stock account, but
(i) I'm not sure, and (ii) this doesn't make sense in Gnucash right
now, because stock accounts only go up and down by units.

    Dale> When the item is sold

Presumably a transfer from the stock account to the brokerage account?

    Dale> then these unrealized gains and losses should be reconciled
    Dale> and the net transferred to a realized gain or loss
    Dale> account.

Except for tax considerations, is this just the same as reconciling
income and expenses into an equity account at year end?

What kind of account should the realized gain/loss one be?

I A N A A, but on a related theme, I've noticed that there's a kind of
duality between income/expense and variably-valued assets.

To see what I mean, consider Food and Salary.  Normally, you probably
have Food as an expense and Salary as income.  But another way of
thinking would be to treat Food expenditure as buying a unit of the
Yourself stock, and Salary as the cash derived from selling this unit.

Is this a helpful model at all?  (I daresay it's bread and butter to
anyone who's studied accountancy.)