Reconciling brokerage statements

Donald Allen donaldcallen at gmail.com
Thu Apr 3 07:35:26 EDT 2008


On Thu, Apr 3, 2008 at 7:01 AM, Geoff Catlin <gcatlin at gmail.com> wrote:
> Thanks for the response David.
>
>  So, what I was doing wrong, and what wasn't clear to me from reading the
>  Concepts Guide, is that I should have been reconciling individual
>  accounts, not parent accounts. In other words, I have accounts like this:
>
>  Assets
>   Investments
>     Brokerage
>       Cash
>       Stocks
>
>  I was trying to reconcile the Brokerage account because I thought that
>  should represent my statement. But what I should really do is reconcile
>  the Cash and Stocks accounts individually for each of my statements.

This is perhaps redundant, since you've seen the light. But I'll
comment anyway that what you are reconciling in a brokerage statement
is that the statement and gnucash agree on the transactions that have
taken place (stock transactions, dividends received and perhaps
reinvested, interest paid on cash balances, etc.) and that, in the
end, the cash balance in gnucash agrees with the cash balance on the
brokerage statement and that the details of your holdings agree (but
not their value). The market value of the stocks is not part of the
reconciliation, as someone pointed out earlier, since the market value
on your statement is a snapshot by your brokerage at a moment in time
that is in the past. What you really care about is whether you and
they agree on the detailed description of your positions -- what
securities are held, how many shares, the sign of the position (long
or short), etc. These should automatically agree if the transaction
check has always shown agreement over all statements since the
inception of the account. But as a double-check (mostly on myself), I
periodically separately check what gnucash thinks the holdings are vs.
what the brokerage thinks. I've found that I do sometimes catch
errors, almost invariably mine, and usually because I've missed a
stock split.

/Don


>
>  I hope this helps others.
>
>  -Geoff
>
>
>
>  David T. wrote:
>  > Certainly you can reconcile brokerage statements.
>  >
>  > However, you have to keep in mind that the asset you own is a number of shares
>  > of stock. These shares really only have a value when you sell them. The share
>  > price that your broker provides on your statement is simply a potential value
>  > that takes on meaning when you actually sell the stocks. Until that point,
>  > though, it's just wishful thinking ;) .
>  >
>  > My brokerage statement includes an account for the stock holdings, which lists
>  > the shares that I own, and a money market account that receives dividend
>  > payments. I have separate accounts in Gnucash for these, and have no troubles
>  > reconciling.
>  >
>  > If your dividends are reinvested, the transaction will have a dollar amount, a
>  > share price, and a number of shares purchased. I put in the dollar amount and
>  > the shares purchased and let Gnucash calculate the share price. The dollar
>  > amount comes from an income account (Income:Dividends:Taxable:ABCD)
>  >
>  > You can track the ongoing value of your stocks by manually entering prices in
>  > the Price editor or by using the Online quotes feature to download them. You
>  > can then view the portfolio's speculative value by running the Portfolio
>  > report.
>  >
>  > Chapter 8 of the concepts guide covers a lot of this.
>  >
>  > HTH,
>  > David
>  >
>  > --- Geoff Catlin <gcatlin at gmail.com> wrote:
>  >
>  >
>  >> Is it possible to reconcile brokerage statements?
>  >>
>  >> For example, let's say I have a statement for the period Jan 1 2008 -
>  >> Jan 31 2008. On Jan 31 2008, stock ABCD was worth $20 (which I've
>  >> recorded in the Price Editor), so my 10 shares are worth $200 which is
>  >> reflected on my statement. However, today, ABCD is worth $22 (also
>  >> recorded in the Price Editor). Unfortunately, when I attempt to
>  >> reconcile my old statement, GnuCash doesn't seem to consider the
>  >> historical price that corresponds to the statement date.
>  >>
>  >> Am I doing something wrong? Is there a work around? Or is this not
>  >> currently possible in GnuCash?
>  >>
>  >> Thanks,
>  >>
>  >> -Geoff
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>  >
>  >
>  >
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