Handling Initial Stock Holdings

Derek Atkins warlord at MIT.EDU
Mon Sep 11 08:43:45 EDT 2006


"David T." <sunfish62 at yahoo.com> writes:

> Shout Hallelujah! I have a question about how to use GnuCash, and accounting
> (as opposed to railing annoyingly about how I could get GC to install and run
> on my IntelMac...).
>
> I imported my Quicken files, and am getting my brain around how to do stuff the
> GC way. My immediate question has to do with setting up stock holdings. Let's
> say that on the starting day of my GnuCash existence, I own 100 shares of XYZ
> Widget company, with a value of $500. I think that I should create a
> transaction from Equity into my Brokerage account of 100 XYZ shares, value
> $5/share. But if this is the case, how do I track capital gains? If I bought
> the shares for $1 a share, there's nothing in the record to show the cost
> basis...

You should set up the initial balance to correspond to the initial
purchase price, not the actual value.  I.e., the opening-balance
transaction should reflect the basis of the stock.

> I'm asking because when I imported my Quicken file, I found that Quicken had
> retained earlier transactions in my stock accounts that had to do with the
> addition or subtraction of shares (such as reinvested dividends). In that
> Quicken file, I had performed a year-end copy at some point in the past;
> Quicken retained those earlier transactions, but somehow hid them. Now when I
> import the QIF file, these hidden records turn up, with disastrous results on
> the accuracy of my overall accounts. 
>
> So, I am figuring that I will have to reset my stock accounts at an arbitrary
> date, and move forward from there. Unless someone has a better idea...

I dont know.

-derek
-- 
       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
       warlord at MIT.EDU                        PGP key available


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