Chapter 8 - investment accounts

[John Ralls]

On Nov 3, 2013, at 1:05 PM, Jamestk <davidjamestk at hotmail.co.uk> wrote:

> *Cheers for the reply John.*
> 
>> It works better to make the Brokerage asset account of type Assets rather
>> than Stock, because 
>> one will usually have a cash/money market account of type Bank inside of a
>> brokerage account and making the enclosing account of type Stock precludes
>> that. Although you didn't ask about it, you generally want to mark the
>> container account as a placeholder to prevent accidentally entering splits
>> at the upper level. 
>> 
> *Yes, that makes sense which  I have noted*
> 
>> The brokerage expense account isn't strictly necessary if you net
>> commissions into purchase and sale amounts. That's how US tax authorities
>> want it done, but it might be different in other countries. 
>> 
>> I don't use the Advanced Portfolio Report (Reports>Assets &
>> Liabilities>Advanced Portfolio Report), but I think it might use a mirror of
>> the brokerage hierarchy under income for tracking dividends and interest in
>> order to compute total return. I just have some dividend accounts
>> (long-term, short-term, and tax-exempt to reflect US tax law) set up per
>> brokerage. 
>> 
> *My objective which is moving a little closer, is to generate a report which
> shows my current open positions with each broker (only two). Because I tend
> to invest long term it's easy to forget amounts, profit/loss and who holds
> the stock (nominee) on your behalf - ideal format would be
> 
> Broker - ABC
> 
> Purchase date
> 
> Stcok - IBM
> 
> Number of shares
> 
> I am close to these using the 'transactions report' but not quite there yet.
> The other way would be to have an IBM stock account for each broker account
> as a child or sub account. Would this approach cause duplicates in reporting
> at all?*

If you have the same stock in both accounts, yes, you should keep a separate sub-account for it in each one. No, it shouldn’t cause any duplication in the reports. Give the two portfolio reports a try. I notice that the stocks are listed in alphabetical order and grouped by the containing account although the accounts aren’t labelled and don’t have subtotals, which would be a nice feature. Neither shows holding period either, unfortunately.

> 
>> I've also never tried to import stock trade transactions, but IIRC others
>> have said here that the importers aren't quite clever enough to handle them. 
>> 
>> Yes, by all means enter stock transactions first from the cash account from
>> which the payment will come or to which the proceeds will go. Note that if
>> you use the completion feature the price will be copied as well and you'll
>> have to correct it in the stock account. For sales, you then switch to  the
>> stock account and enter the gain or loss as a cash amount with the shares
>> column blank and balance it to the appropriate income account, again with
>> the shares column blank. Take care not to use <Enter> until you have
>> finished entering those two splits. Detailed instructions are in 
>> http://gnucash.org/docs/v2.4/C/gnucash-guide/invest-sell1.html
>> 
> *Entering the price manually is not a problem although the screen shots look
> a little daunting for one transaction. In essence you have to enter the
> profit and loss manually then post it across to the correct brokerage
> account. This is fine, but I am guess the closed (sold) positions will
> appear in the report too?*
They would in a transactions report, yes. They shouldn’t in a portfolio report.
> 
>> I have tried the Lots mechanism and found it problematic, so I enter the
>> gains splits by hand as above. It has hooks for sale allocation other than
>> FIFO, but no-one has ever implemented any of them. It also puts the G/L
>> splits in a separate transaction and uses a hard-coded top-level account --
>> "Orphan Gains USD" (or GBP in your case) -- which means all of the gains
>> splits have to be moved to the right account after "scrubbing".
>> Unfortunately, moving them confuses it for subsequent scrubs if you've got
>> more than one sale in a single lot. 
>> 
> *I have sorted the 'orphaned' trades by deleting the transaction instead  of
> changing the figures. Not ideal, but quicker for corrections*

Umm, unless I misunderstand you, that removes the splits and the gain/loss doesn’t
show up in your income:capital gains accounts. That might not matter to you if you don’t
have to pay taxes on them.

Regards,
John Ralls