Stocks and Balancing Accounts

[Daniel Carrera]

Charles Day wrote:
> 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".

That's not what I saw when I did a "trial balance". You are talkig about 
the "advanced portfolio report". I'm not familiar with this feature, and 
it might be that this one does recognize cap gains and loses. But the 
trial balance sure doesn't.

I just tried the "advanced portfolio report" feature, just out of 
curiosity to see what it does. It doesn't seem to do anything. It shows 
0.00 in every column.

> 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).

You mean this: http://svn.gnucash.org/docs/guide/invest-sell1.html ?

Ok, let's see what this page says.

(1) I buy 10 units of IBM for $1000. I record a simple transaction that 
removes $1000 from Bank::MyBank and puts 10 IBM in Stock::IBM.

(2) Later I sell my 10 IBM for $1050. In GnuCash I enter a SPLIT 
TRANSACTION that puts $1050 in Bank::MyBank, removes 10 IBM from 
Stock::IBM, and takes $50 from Income::CapGains.


This sounds good for this simple example. But I fear that in practise it 
won't work. Suppose I buy stock every quarter for 5 years, and then I 
sell half of my position. What would you put down for cap gains? The 
stocks were bought at various different prices.


In a similar way, this system is unfeasible for multiple currencies. I 
have money in CAD, USD, GBP and EUR. I have made many transactions in 
all four currencies. I can't be expected to keep track of capital gains 
and loses entirely by hand, which is effectively what this method is 
proposing.


Daniel.