Chapter 8 - investment accounts

[Jamestk]

Well that's interesting John, in fact that's exactly what I am after -
cheers.

Is it a new feature as I don't remember seeing it mentioned in the tutorial?

I'll need to re-read the Wiki a few times to let that sink in a bit before
moving on, it looks ideal though.

*Handling of Gains/Losses

current "double-balance algorithm"

The computation of (Realized) Gains/Losses is performed automatically by the
lot "scrub" routines, using a "double-balance" algorithm.*


http://wiki.gnucash.org/wiki/Concept_of_Lots
<http://wiki.gnucash.org/wiki/Concept_of_Lots>  
__________________________________________________

> On Feb 1, 2015, at 8:23 AM, Jamestk <[hidden email]> wrote: 
> 
> David, no apology necessary, pinch of salt. 
> 
> Just to recap - 
> 
> - A manual calculation is needed to enter a profit or loss 
> 
> - This leads to two register entries, one for the selling of shares and
> the 
> second to record gain/loss 
> 
> I thought one way around this would be for the gross purchase to appear as 
> an expense with gross sale as income, would this work on a profit and loss 
> report? 
> 
> Investment accounts do not seem to be selected in the default settings
> (P+F 
> report), I tried manually clicking on brokerage accounts + sub accounts
> but 
> again, nothing within range. 
> 
> Is it just the categories that appear in reports as opposed to accounts?   
> 
> Just a thought, although I don't want to waste forum members time on a 
> fruitless exercise.
«  [hide part of quote]

There *is* another way: Open the stock account and select Actions>View
Lots... from the menu. Click "Scrub Account" on the bottom of the resulting
dialog box. That will automatically create a separate capital gains
transaction in the account. However, it has a few drawbacks: 
- the capital gains account is hard-coded to "Orphan Gains -- XXX" where XXX
is the transaction currency in (I think) the sale transaction. 
- It only does FIFO which if there's  more than one purchase might result in
a different basis and therefor a different gain than what your broker
reports to the tax authorities. 
- It can get confused if you buy some stock, sell part of it, then buy more
and sell all or part; the lot-allocation code isn't quite general enough to
handle all possible variations on this. 

The P&L report reports income and expenses: The name I learned for it in
Accounting 101 (yes, I did actually take a course with that name!) was
"Income Statement". Investment accounts are Assets. In order for your
realized capital gains to appear on that report they need to be transferred
to an income account; that's what we've been talking about here. 

GnuCash doesn't have "categories", only accounts, so no categories appear in
reports. Adding categories is a frequent request from new users who haven't
quite gotten their heads around double-entry accounting. 

Regards, 
John Ralls 




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