Chapter 8 - investment accounts

[David Carlson]

On 2/1/2015 6:07 AM, Jamestk wrote:
> Thanks for the replies all.
>
> Correct me if I am wrong, but the duplicate transaction is only visible in
> the 'stock' account, in this case AMZN. If you switch to the brokerage
> account it shows one transaction with the corresponding net credit of the
> sale.
>
> The reason for this anomaly is to record the capital gain/loss at the point
> of disposal. Because this is double entry book keeping it requires an
> additional entry to be recorded against the gain, this is done using the
> stocks brokerage and account code (AMZN) hence it appears twice in the stock
> register.
>
> Perhaps use another category such as 'Cap gains offset' but this looks a
> little untidy.
>
> David 
> ___________________________________________
>
> Feb 01, 2015; 5:27am  David Carlson-4 David Carlson-4
> On 1/31/2015 7:34 PM, Wm wrote:
>
>> Sun, 1 Feb 2015 00:24:04 
>> <[hidden email]>  David 
>> T. <[hidden email]> 
>>
>>> Wm, 
>>> As noted in the thread, the "duplicate" entries in the register 
>>> result from multiple splits in the same account. This is an 
>>> unfortunate aspect of the interaction between the GnuCash interface 
>>> and the underlying (split-based) data structure. There is, however, 
>>> only *one* sales transaction represented. 
>>> David 
>> I don't get that artefact here using 2.6.5 
>>
>> if your (both DavidC and DavidT) gnc is showing the same as the 
>> problem picture then I'm baffled.  Because it doesn't here looking at 
>> matching accounts with Buy, Buy, Buy and Buy, Sell, Sell. 
>>
>> What do I need to do wrong to reproduce the cock-up everyone else is 
>> so proud of? 
>>
> «  [hide part of quote]
>
>
> First sleep it off then look at a correctly formed closing transaction 
> with a profit from the perspective of the security account. 
>
> David C 
>
>
>
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James,

I have to apologize for Wm's behavior on this mail list last night.  I
am not sure why he has not been banned.

You are close to being correct. 
Actually, the second entry in the stock account is the difference
between the amount originally paid for the shares that were just sold in
the example and the amount received from the sale.  That is hopefully a
profit and it also needs to be recorded as an income that is called a
capital gain.  There is no need to use the word "offset".  it is pure
income.  The only difference is that you got it by selling stock instead
of by working in a coal mine, so you put it into a different income
account. 

Properly recording the capital gain balances the additional currency
asset in the system with income, so that now the Trial Balance report
results in a zero balance.  That is the double entry part. 

Also, you are correct about the fact that there are two entries in the
security account which is incorrectly shown by GnuCash as two
transactions in the register view because of the code that is used to
generate register views.  That is a known flaw that has been present for
many years.  It will not be corrected until the register display code is
rewritten.  There are other reasons to rewrite the register display code
and some critical technical reasons that it has been postponed until
after certain other infrastructure code rewrites are complete.  There
are only so many developer hours in a year.

David C