Accounting for Shares on Australian Exchange.

[Graeme Nichols]

Doug Laidlaw wrote:
> I am running Gnucash 2.0.1 as supplied with Mandriva 2007.
> 
> My wife inherited some shares in 2002, and I am trying to record them under 
> Gnucash. All are listed on the Australian Stock Exchange with suffix .AX.
> 
> Following the tutorial, with a custom account hierarchy, I get the new account 
> setup screen. Taking the first security, I enter AWS as the Account name.  
> All fine so far.
> 
> I then go to the Security/Currency field.  I can have CURRENCY or nothing.  I 
> can't overwrite it with ASX, or anything.  Perhaps I have done something 
> wrong higher up, because it used to be NASDAQ, NYE or Template.  Since ASX 
> isn't an option, should I be using Template?  The Tutorial implies that it 
> can be any exchange I nominate.

I am no expert on this but I have an account set up for Telstra shares, 
amongst others, which works fine for me and which records all my trading 
transactions for those Telstra shares. I have another account from which 
I pay for those shares or deposit the proceeds from any sale.

My account setting for that are:
Account Name, Code and Description is Telstra
The security/currency field is TLS (the ASX code for Telstra)
Smallest fraction is 'Use commodity value'
Account type is 'stock'

and, for my purposes, I have ticked it as tax related.

The account from which I pay/deposit from/to is simply a bank account.

The dividends are paid into an 'income' account. The transfer field is 
my bank account. The dividends actually end up in my bank account. The 
settings are the same as for the Telstra share account except that the 
account type is 'income'

I have all my dividend accounts under a parent account called 
'Dividends'. It keeps track of all my total dividends while the 
individual dividend accounts keep track of the individual stock dividends.
> 
> The "Smallest Fraction" at the moment is fractions of the AUD.  
> 
> There seems to be no problem configuring it for ASX prices, which are 
> available from Yahoo Quote.
> 
> Does it matter that the original purchase was more than one fiscal year ago?
> 
> With Australian shares, tax at the company rate is deducted from the dividend 
> and credited on account of the investor's tax liability.  I propose to treat 
> this tax in the same way as an employee's tax instalments, as a deduction 
> from the full dividend.

That is not strictly true. Double taxation on Australian shares has long 
been done away with. The company pays company tax on it's profits and 
what is left over is paid to shareholders. That dividend has already 
been taxed so no taxation is withheld from the dividend. If your 
personal tax rate is below the company tax rate, currently 30%, you 
receive a tax rebate for the difference or if your rate is above the 
company rate you pay the difference. All you need to do is treat the 
dividend as income in gnucash. Guncash doesn't have the ability to 
handle all the 'unfranked amount', 'franked' amount' and the 
'imputation' (franking credit) amount.

> 
> P.S. the READMEs say that if I add ASX as an option in the Scheme file, I need 
> to add it somewhere else.  Where?

Apart from what I have outlined above you shouldn't have to do anything 
else.


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Kind regards,

Graeme.
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http://www.users.tpg.com.au/gnichols/graemenichols.pub
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