balance sheet *always* shows Unrealized Loss of 639.96
David J. Heinrich
heinrich at rochester.rr.com
Fri Jan 7 21:41:52 EST 2005
I've figured out the problem with GnuCash and the price-editor,
regarding accounting for unrealized capital gains.
All that you do is figure out how much the stock price increased (or
decreased) and make an appropriate entry of a CREDIT from a Gains \
Capital Gains \ Unrealized to a DEBIT in Assets \ Long Term \ ABC for
the amount that you calculated you gained in unreal. capital gains (EB -
BB - Contribs - Div. Reinvestments).
So, now when I do an account summary, things balance out. However, when
I show a BALANCE SHEET, it *always* shows an "Unrealized Gains (Losses)"
of -639.96 under Liabilities. This makes no sense, since my ACCOUNT
SUMMARY shows everything balancing out.
The fundamental identiy of accounting is:
Assets = Liabilities + Equity + Income - Expenses + Gains - Losses
As you can see from my Account Summary on 12/31/1996, this identity
holds:
ACCOUNT SUMMARY on 12/31/1996
---------------------------------------
Account name Balance
Assets
Assets $8,472.63
Total Assets $8,472.63
Liabilities
Liabilities $0.00
Total Liabilities $0.00
Equities
Equity $6,136.77
Total Equities $6,136.77
Income
Gain $2,335.86
Income $0.00
Total Income $2,335.86
Expenses
Expenses $0.00
Loss $0.00
Total Expenses $0.00
---------------------------------------
Total $2,335.86
$8,472.63 = $0.00 + $6,136.77 + $0.00 - $0.00 + $2,335.86 - $0.00
$8,472.63 = $6,136.77 + $2,335.86
$8,472.63 = $6,136.77 + $2,335.86
For my Balance Sheet on 12/31/1996, the equation holds, if you DON'T
consider "Unrealized Gains (Losses)":
BALANCE SHEET on 12/31/1996
---------------------------------------
Assets
Assets $8,472.63
Assets $8,472.63
---------------------------------------
Liabilities
Liabilities $0.00
Liabilities $0.00
Unrealized Gains (Losses) -$639.96
---------------------------------------
Equity
Equity $6,136.77
Net Profit $2,335.86
Total Equity $8,472.63
---------------------------------------
Liabilities & Equity $7,832.67
$8,472.63 = $0.00 + $6,136.77 + $0.00 - $0.00 + $2,335.86 - $0.00
$8,472.63 = $6,136.77 + $2,335.86
$8,472.63 = $6,136.77 + $2,335.86
However, when you factor in "Unrealized Gains (Losses)", it becomes
$8,472.63 = $0.00 + $6,136.77 + $0.00 - $0.00 + $2,335.86 - $639.96
$8,472.63 = $6,136.77 + $2,335.86 - 639.96
??$8,472.63 = $7,832.67 ??
*What* is this "Unrealized Gains (Losses)" junk doing there? *Exactly*
the same amount appears on *all* of my GnuCash balance sheets for every
year I select. I don't have any "Unrealized Gains (Losses)" account in
my GnuCash hierarchy.
Help?
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