Stock Price / Exchange Rates Used while Closing Book

[Mike or Penny Novack]

>I don't think that's correct. "Accrual" vs. "Cash" accounting refers to when you book income and expense: Accrual if you book it when you issue the invoice or receive the bill, cash if you book it when you're paid or when you pay.
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>I think that you're thinking of "Trading Securities"[1], and I doubt that anyone using Gnucash would be subject to those rules -- but I'm not an accountant. Doubtless one will come along and set us straight on the matter.
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Hmmmm ... well although not an accountant I have some knowledge of the 
rules (applying to other sorts of businesses besides trading securities 
-- which I DON'T know very well). For example, I have just 87 acres of 
woods and for me "stumpage" would be considered casual income so if/when 
I chose to have the land logged would be income at that time. But if I 
had 8700 acres of woods, in the business of raising timber, I would be 
required to account for that on the accrual basis taking as income NOW 
the estimated change in asset value annual growth of the trees) and 
later getting a deduction for "wastage of asset" when cut. In other 
words, an example of a business not allowed to use "cash" basis, not 
allowed to defer booking income till actually received.

I am sure there are other examples besides growing timber where accrual 
must be used (and change in asset value a current income or loss)

The following aren't about "cash" vs "accrual" but that even when on a 
cash basis might need to report income you don't physically receive 
(even us "peons")

 If you work for a large corporation you might have as one of your 
benefits term life insurance. If this applies to you (it did for me**) 
only the first $50,000 (the cost of it) isn't income to you. Let's say 
you are given as this benefit whatever matches your salary and you are 
paid more than $50,000 and you opt for the full amount. Then you would 
be familiar with receiving each year a statement indicating the amount 
of "imputed income" for the excess even though you didn't receive 
anything in cash.

Other examples?  With securities, how about coupon bonds bought at a 
discount from their face value (current interest rates for this sort of 
bond are higher than the coupon rate). Of course the interest payments 
you receive for the coupons are current income but so is the calculated 
rise in value as the bonds approach maturity -- it's considered current 
interest income, not capital gains. Income though you haven't received 
anything in your pocket (and if rates change, might "evaporate").

Michael

(NOTE --- I'm not sure this is the CURRENT tax law but was back some 
decades ago the last time  I was paid for "stumpage" I had to look it 
up. This land is kept as wildlife habitat, wasn't intending any logging 
even back then. But a neighboring property was being logged and the 
logger asked to be able to cut enough trees on our property to allow 
logs to be hauled out across a "neck" of our land to avoid a dangerous 
(and environmentally destructive) side hill haul. Initially was only 
going to be a few trees (to allow the haul) but in the course of cutting 
the true boundary marker was uncovered, not the mistaken one we had been 
shown when buying the property and the one I had showed this logger when 
walking the bounds with him. So he paid us for an acre or two of trees 
that had been cut thinking they were on the adjacent property. Honest 
fellow)

** I am simplifying because these arrangements can be complicated. In my 
case the first $50,000 was free (paid by the company) and then they 
would split the cost with you for up to three times your salary. So even 
back when I wasn't paid all that much 3x salary was over $50,000. Note 
that this is NOT what a "split dollar" benefit is! I had that too. In 
that case the company buys, pays for, and owns the policy but allows you 
to name the beneficiary and allows you to buy the policy out when you 
leave if you want to keep it (this is permanent, cash value type 
insurance). In this case the "split" is the calculated cost of it as if 
it were term insurance coverage and it would be taxable income for you 
if they paid for it but in this case you pay that portion of it. Maybe 
some places you don't, but if the company pays it then again "income" 
you don't actually receive.