Advanced Portfolio Income (maybe Brokerage Fees too) incorrect in switch and multiple investments transactions
Chris Good
chris.good at ozemail.com.au
Tue Dec 20 20:28:19 EST 2016
> Message: 12
> Date: Tue, 20 Dec 2016 11:45:32 +0100
> From: Alberto Dante <alberto.dante at gmail.com>
> To: gnucash-user at gnucash.org
> Subject: Advanced Portfolio Income (maybe Brokerage Fees too)
> incorrect in switch and multiple investments transactions
> Message-ID: <691053c2-2ebc-b2de-9cdd-f0c5ed915872 at gmail.com>
> Content-Type: text/plain; charset=utf-8; format=flowed
>
> First of all, note that I've put all my investment operations (fee,
capital
> gain,
> dividend, ...) into Income accounts (Income:Finance:...), so I can have
the
> net
> finance balance directly, and I can compare different types of Income
(Job,
> Finance, ...) in a glance.
> Simply, my account tree is something like that:
>
> Assets
> Current Assets
> Cash
> Checking
> Bank ABC
> Investment
> Broker DEF
> Mutual Fund
> FUND 1
> FUND 2
> FUND 3
> FUND 4
> Income
> Job
> ........
> Finance
> Investment
> Broker DEF
> Mutual Fund
> FUND 1
> Capital gain
> Dividend
> Fee / Commission
> FUND 2
> ......
> FUND 3
> ......
> FUND 4
> ......
>
> Therefore, in Advanced Portfolio report I have not-zero values only in
> Income column, while Brokerage Fees column has all zero values.
> So I couldn't check Brokerage Fees column values in Advanced Portfolio,
but
> I
> think it would be affected by the same problem.
> I've found two situations causes incorrect Income column values in
Advanced
> Portfolio Report:
>
> 1) Switch Investments
>
> When switching e.g. from FUND 1 (sell) to FUND 2 (buy) (without involving
> Bank ABC account), generally you have to pay fees (e.g. 5,00
> Euro) charged to FUND 2, while FUND 1 doesn't have any fee (sell is for
> free);
> total fee = 5,00 Euro.
> In this case Advanced Portfolio income column charges 5,00 Euro both to
> FUND 1 and FUND 2; total fee = 10,00 Euro.
>
> 2) Multiple Investments
>
> With just one operation (one transfer from Bank ABC account) you buy two
> funds FUND 3 and FUND 4, paying 8,00 Euro fee each; total fee = 16,00
Euro.
> In this case Advanced Portfolio income column charges 16,00 Euro both to
> FUND 1 and FUND 2; total fee = 32,00 Euro.
>
> Please note that all totals in account tree (mainly Income:Finance:...)
are
> always correct; other column values in Advanced Portfolio report seems to
> be correct too.
>
> Moreover:
> - Basis column how is calculated (when, after multiple buy operations, you
> have a total sell and a new buy again)? Does Advanced Portfolio recognize
> the total sell before the last buy?
> - I calculate capital gain manually; how is it possible to find it
> automatically?
> Realized gain column does it already or uses my manually calculated
values?
>
> Thanks, Alberto
>
Hi Alberto,
Just so people know what has already been suggested in bug 776300 [1]:
Comment 1 from Chris Good:
It sounds like you are putting multiple splits for different stock (or
mutual
fund) accounts in the 1 transaction. Advanced Portfolio Report is not
designed
to handle that. It would be very complicated to handle that sort of
transaction. Put them in separate transactions even if they didn't happen
like
that. For item 1 you'll have to do a dummy in/out of the bank or brokerage
account (or some other account). Please let us know if the commission is
still
a problem after you do that.
Note that if you enter splits for fees (or commissions) you will have to
manually calculate capital gains rather than using lots for the automatic
calculation and creation of capital gain transactions. This is more work but
perfectly valid.
If your jurisdiction allows you to deduct fees and you wish to use automatic
calculation of capital gains, you must enter net prices (less fees) on the
stock splits and must not enter splits for the fees. I am currently
documenting this. This means it is not easy to track fees in specific
accounts
but this is how it currently is.
In future, you might like to discuss this sort of thing in the gnucash-user
email group before you go to the trouble of raising a bug.
Comment 3 from Chris Good:
I forgot to say, interesting idea making your fees income accounts. I assume
the report will not recognize any brokerage as it expects them to be
expenses.
Comment 4 from Alberto Dante:
I'm thinking about creating a dummy account:
Assets:Current Assets:Checking Account:DUMMY BANK
(which total must be always zero) to use as intermediate step between:
1) To manage switch investment operations:
Assets:Investments:Broker DEF:Mutual Fund:FUND 1
Assets:Current Assets:Checking Account:DUMMY BANK
Assets:Investments:Broker DEF:Mutual Fund:FUND 2
Assets:Investments:Broker DEF:Mutual Fund:FUND 3
Assets:Current Assets:Checking Account:DUMMY BANK
Assets:Investments:Broker DEF:Mutual Fund:FUND 4
2) To manage multiple investment operations:
Assets:Current Assets:Checking Account:BANK ABC
Assets:Current Assets:Checking Account:DUMMY BANK
Assets:Investments:Broker DEF:Mutual Fund:FUND 1
Assets:Investments:Broker DEF:Mutual Fund:FUND 2
Assets:Investments:Broker DEF:Mutual Fund:FUND 3
Assets:Investments:Broker DEF:Mutual Fund:FUND 4
This should solve the problem in a handy, strong and clear way.
(I know, this should be a gnucash-user email group discussion, just to know
your opinion)
Comment 5 from Chris Good:
Hi Alberto,
Your new suggestion still has multiple splits for different stock (or mutual
fund) accounts in the 1 transaction.
You need to do for your example 1:
Transaction 1: Sell Fund 1
Assets:Investments:Broker DEF:Mutual Fund:FUND 1 Credit
Assets:Current Assets:Checking Account:DUMMY BANK Debit
Transaction 2: Buy Fund 2
Assets:Investments:Broker DEF:Mutual Fund:FUND 2 Debit
Assets:Current Assets:Checking Account:DUMMY BANK Credit
You can use the real bank account or brokerage account so long as you
remember
these transactions will not appear on your bank statement.
Please see [2] for info on how to use lots for automatic calculation of
gain.
[1] https://bugzilla.gnome.org/show_bug.cgi?id=776300
[2]
https://www.gnucash.org/docs/v2.6/C/gnucash-guide/invest-sell1.html#invest-s
ellLots
Regards, Chris Good
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