Unrealized gains: conclusions?

[Charles Day]

On Mon, Jul 7, 2008 at 3:44 PM, Mike Alexander <mta at umich.edu> wrote:

> --On July 7, 2008 10:42:18 AM -0700 Charles Day <cedayiv at gmail.com> wrote:
>
>  On Mon, Jul 7, 2008 at 10:29 AM, Mike Alexander <mta at umich.edu> wrote:
>>
>>  --On July 7, 2008 8:46:37 AM -0700 Charles Day <cedayiv at gmail.com>
>>> wrote:
>>>
>>> > So from your and Michael's comments, I think we can add these to
>>> > the list:
>>> >
>>> > 9. Entering unrealized gains is optional and must remain so.
>>> > Therefore use of trading accounts must be optional.
>>>
>>> I'm all in favor of making trading accounts optional.  They are a
>>> global option in my patch, but really should probably be an option
>>> associated with a specific Gnucash file.  However, I don't think it's
>>> correct to say that trading accounts record unrealized gains.  They
>>> record the net conversion between commodities which makes it possible
>>> to calculate unrealized gains.  This is perhaps a small distinction,
>>> but I think it is a useful one.
>>>
>>>
>> Ah, I think I see what you mean. Unless you have forgotten to record
>> realized gains, or you are revaluing your existing holdings (or
>> GnuCash is doing so against your will), trading accounts have a net
>> zero balance. So trading accounts are not incompatible with cash
>> basis accounting. Do I have that right?
>>
>
> Yes, that's correct, assuming you've closed out your position in the
> security.  I've attached a tiny file that shows the result of buying a stock
> and selling it for a profit.  I recorded capital gains using the lot
> scrubber and used trading accounts.
>

Even if you haven't closed out your position, if reports and the GUI were to
value your remaining holdings at cost then the trading accounts would have a
net zero balance. But reports and the GUI don't give you that choice at
present. If the changes I committed today get released, then valuing current
holdings at average cost will be available for reports in 2.2.6.  As for the
GUI, I don't know which price source the Accounts tab currently uses, but it
does seem to be doing revaluation.

-Charles


>       Mike
>