Stocks, Mutual funds and Capital Gains

[Maf. King]

On Friday 22 June 2007 09:13, Daniel wrote:
> Hello,
>

>
> So, now my question:  How do you deal with price fluctuations in other
> commodities? Can I do the same thing for currencies?
>
> Thanks for the help.
> Daniel.

Hi Daniel,

IANAA, so this should be read as such!

I believe that this is where an "Unrealised Gain" account is useful - some 
assets don't have a real, quantifiable value until you _dispose_ of the 
asset.

So, if you bought something for £100, it is only worth £100, until you 
actually dispose of the asset.  Then, it is worth whatever you are *paid* for 
it. (GC TXN looks like a split between some (or all) of:  income, COGS/ 
reduction in asset value, and bank etc.)

To keep track of a *potential*(or market) value, you do a txn to unrealised 
gains, which increases the asset value. Then when you sell, you turn that 
unrealised gain into profit (ie. capital gain).

This isn't something I've done in GC, just a theory i remember hazily - and I 
stand to be corrected by anyone who knows better!

HTH,
Maf.