Fixed Income Again
John K. Taber
jktaber at charter.net
Tue May 1 10:42:18 EDT 2007
It was suggested that I use "asset" as TYPE for Treasury notes. I tried
"asset" but I was not able to change present value with the Price
I'm going to repeat myself: GnuCash really needs more fixed income work
done on it. The fact that I'm not a bond trader has nothing to do with
Here is the situation: I buy Treasury notes from Treasury Direct, an
unadvertised office of the US Treasury. I recommend Treasury Direct,
btw, for no-cost purchase of Treasuries.
My purchase is actually a non-competitive tender in Treasury lingo. The
practical effect is that Treasury sets the interest rate for me as the
average of the competitive bids.
Thus, the price I pay is a premium or discount to par, usually a
discount. For example, if I buy 10,000 USD worth at auction, I may
actually pay 9,994. But the note is worth 10,000 at maturity, and since
I hold to maturity I want to carry it on my books at 10,000 because
Treasury does. It's nice if my books agree with Treasury's statements!
IOW, I need to show the 6 USD refunded to me, and the value of the note
to agree with Treasury's statement. The Price Editor lets me change the
price but it does not show in the Accounts, or anyplace else for that
matter. I suppose the change will show once sold as realized gain?!?!
It is NOT realized gain! It is accrued interest, or so I understand, and
is taxable as accrued interest, not capital gain.
As a stopgap I am listing Treasuries as type "stock." I give them the
last 3 characters of the CUSIP for ticker symbol, for shares I divide
the total by 100. For purchase price I use the price listed by
Treasury's Auction Results.
Then I update the price to 100/share.
It works, but it's just plain ugly seeing "stock" for "note".
GnuCash should allow for premiums and discounts against par, and for
type bond and note.
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