Mutual fund prices precision

AC gnucash at acarver.net
Tue Aug 4 19:02:25 EDT 2015


On 2015-08-04 15:01, Murry McEntire wrote:
> On Tue, Aug 4, 2015 at 2:37 PM, Liz <edodd at billiau.net> wrote:
> 
>>
>>
>> I did notice that you had fractions of shares. I only own whole shares
>> where I own shares, and the dividend reinvestment scheme has a small
>> credit in it until the balance is big enough to buy a whole share.
>> AC, how do you own a fraction of a share?
>>
> 
> Several direct buy and reinvestment programs allow you to own partial
> shares as long as the shares are kept in the account. I have an account
> with a few stocks with partial shares. Mutual funds most often include
> partial shares as part of a round dollar purchase or reinvestment.

Correct, these are all mutual funds.  This brokerage only trades in
units of 0.001 shares so there is no rounding of shares when the
statements are printed.  This much I have already verified with the
brokers.  Prices on the statement are reported to a precision of 0.001
USD though this, I suspect, is kept to higher precision within their
database and they are simply printf(%0.3f)'ing the statements (both
paper and digital have the same precision).  The same for the final
price/cost, it is reported to 0.01 USD and most likely also a
printf(%0.2f) on the statement.

Tax reporting of long term and short term capital gains and losses are
dependent on knowing the basis for each, so price precision is important
because a rounding error can creep in over time.  What is reported on
the statement versus what is kept internally I'm sure differs.  As I
said, though, I'm not going to depend on GC to generate reports for
that, I'll just wait for the tax form from my broker which has
everything summarized as reported to the IRS already.  It was more of an
interest in keeping the local records at a high level of precision to
avoid rounding accumulation over time.


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