Chapter 8 - investment accounts

[David T.]

To take the two last notes you sent:

In the first message, you said:
*To summarise my question -  yes, GNU Cash Stock entry can be a little
confusing but happy to live with that, however (key bit >) one still needs
an accurate double entry method of accomplishing capital gains/losses once a
share is disposed of. The original method (without LOTS) suggested manually
subtracting one from the other outside of GNU Cash, see my response and
concerns to this within this thread. LOTS were then suggested as a way to
overcome this using the ‘scrubbing’ function, however as mentioned it didn’t
work as planned hence my revisit to see if it has been fixed.
——

I suspect your choice of the word “accurate” in this section is unfortunate; the methods available to you are certainly accurate, and based on established accounting principles. Many of them, as you note, rely on manual methods for entering this information, which does make this more difficult. Hence the addition of the lots feature, which for my use case suffices to provide accurate gains transactions. 

The thread you cite later in your reply discusses a problem that the Advanced Portfolio Report has in reporting gains that are taken in an order other than what it expects. I do not know whether the concerns raised there have been addressed by the guy who has worked on the Advanced Portfolio Report in his spare time. For me, at least, that report is less important than is the end of year tax report I run to check my gains data against the gains data supplied to my taxing agency.

And ultimately, for me, this is the real point: I am not an expert in accounting, and I certainly do not know the myriad ways that gains can be calculated, and what all goes into that calculation. My main concern is that my records reflect what gets reported to my taxing agency. Thus, I rely on the information provided to me by my investment agency, since that is what will go to the taxation agency. (I am sure that some on the list will upbraid me for accepting the word of my investment manager, but ultimately, I am willing to trust that the person who has full access to my money and doesn’t steal it is going to give me accurate gains figures).

So, when I sell a security, I scrub the lots and compare the results to what my agent reports. If they differ (which by and large they do not), then I look at the difference, try to understand why the difference exists, and adjust accordingly.

But I will reiterate: for me, the lots function works pretty consistently well. 

You say it “didn’t work as planned”—can you provide in detail what exactly you did, what you expected, and what you saw happen when you scrubbed your account? Or have I missed that discussion?

In your second message, you say:

> On Nov 12, 2016, at 7:57 AM, Jamestk <davidjamestk at hotmail.co.uk> wrote:
> 
> David, just to try and hone in the issues as described (just in case I have
> muddled things even more) please see this recent thread by Chris from May.
> 
> http://gnucash.1415818.n4.nabble.com/investment-lots-td4684763.html
> 
> Having tried the feature again,using lots it does seem to be improved from
> where I remember last time. Hard coding of the orphaned lots was one issue
> that's till there (as opposed to menu option drop down for categorization).

That thread says nothing about “orphaned lots.” A Google search (“orphaned lots gnucash”) turns up discussions about the fact that the lot function assigns the gain to ORPHANED GAINS-XXX. Is that what you are referring to? 

If that is the issue, I frankly don’t see the assignment of gains to this account as either a bug or particularly difficult to address. Simply put, the scrub feature can’t predict where you want the gains assigned, so it puts them into this generic account, with the expectation that you will change it to an appropriate account later. In my situation, I segregate my gains by the brokerage account to which they belong, so that I can compare my end of year data directly to the brokerage statements I receive. It is easy to go in to the transaction and change ORPHANED GAINS-USD to Income:Realized Income:Brokerage A:LT Gains.

> 
> It looks good!
> 
> If we could have a tutorial on the lots split screen that would be great,
> still some anomalies there and questions around each button/function.
> 

The documentation is produced by volunteers. The lots feature is a rather recent addition to GnuCash, and additions have been made to the chapter on investments (Thanks, Chris Good, on a really great job!) to reflect the new feature. Try looking at:

https://lists.gnucash.org/docs/C/gnucash-guide/invest-sell1.html <https://lists.gnucash.org/docs/C/gnucash-guide/invest-sell1.html>

which is the most recent version of the docs. This version will be included in the next release of GnuCash, and it addresses pretty much each of the points you have raised variously through this venue.

HTH,
David