Stocks and Balancing Accounts

Charles Day cedayiv at gmail.com
Sun Jun 15 13:12:51 EDT 2008


On Sun, Jun 15, 2008 at 4:05 AM, Daniel Carrera <daniel.carrera at zmsl.com>
wrote:

> Hello,
>
> I want to buy stocks, but I fear that GnuCash won't handle stock prices
> properly. Suppose I own stock XYZ valued at $1050 but GnuCash only has a
> record of me putting in $1000. The other $50 are stock appreciation. In
> this scenario, the accounts won't balance.
>

If you've only recorded your purchase at $1000 per share, then your books
should still be in balance.

If you then add a price of $1050 to the price editor, to reflect the current
price, then reporting ought to show a total value of $1050 per share with
$50 per share being an "unrealized gain".


> In the ideal world, GnuCash should realize that changes in stock prices
> are capital gains or loses, that that's a type of income, and that the
> accounts do balance. But GnuCash won't do that.
>

Doesn't the advanced portfolio report show unrealized gains? (I'm not sure.)


> How do you deal with this problem?
>
> I encountered a similar problem earlier with currencies. The way I dealt
> with that was to create a bunch of "Currency" accounts. So, for
> instance, if I wanted to exchange $1500 USD for 1000 EUR I would do this:
>
> 1. Transfer 1500 USD from "Banks > My US Bank" to "Currency > USD".
> 2. Transfer 1000 EUR from "Currency > EUR" to "Banks > My EU Bank".
>
> I don't love this method, but it works well enough.
>

Stocks and currencies are basically identical as far as buying and selling
are concerned. To keep the books in balance, you just have to make sure that
when you sell any quantity of securities or foreign currency that you
account for capital gains or losses in your "home" currency (USD in your
example). There is an explanation of how to do this for stocks in the
documentation (which applies equally to currencies).


> But what do I do with stocks? Do I have to make a separate "Currency"
> account for each and every stock I want to buy? Is that the solution?
>
> Thanks
> Daniel
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