Advanced Portfolio Income (maybe Brokerage Fees too) incorrect in switch and multiple investments transactions

[Alberto Dante]

On 30/01/2017 04:07, Mike Alexander wrote:
>> On Jan 11, 2017, at 2:35 PM, Alberto Dante <alberto.dante at gmail.com 
>> <mailto:alberto.dante at gmail.com>> wrote:
>>
>> I'm sorry for the long delay due to end year holidays.
>> Please have a look at attached files (screenshots are of the Advanced 
>> Portfolio reports).
>> You can compare results using split transactions (wrong report 
>> results) and no-split transactions (with DUMMY BANK right report 
>> results, as account tree values) in the following cases:
>> 1) Switch Investments (FUND 1 and 2)
>> 2) Multiple Investments (FUND 3 and 4)
>> 3) Reinvested dividends (FUND 5)
>> I think user manuals should emphasize that split transactions must be 
>> avoided in order to have right Advanced Report results (for 
>> not-so-experienced users as me).
>> I've lost many time to separate lot of split investment transactions.
>
> Sorry for the delay, I haven’t been checking EMail too well the last 
> few weeks.
>
> Thanks for the example files, they help a lot.  I have several 
> comments that might or might not help.
>
> First, as you’ve surmised, the APR makes the assumption that any given 
> transaction will only buy or sell at most a single security.  Things 
> like your case of buying fund 3 and 4 or selling fund 1 and buying 
> fund 2 in a single transaction are not handled correctly.  Changing 
> this would be difficult since a number of assumptions would have to be 
> made and they wouldn’t be right in all cases.
Ok, as Chris said.
It's not so bad for me now using DUMMY Bank...
>
> Second, things might work better if you reversed the bottom two levels 
> in your account hierarchy.  I.e., instead of “…:FUND 1:Capital Gain” 
> and “…:FUND 1 Fee / Commission” you used “…:Capital Gain:FUND 1” and 
> “…:Fee / Commission:FUND 1”.  The important thing is that the leaf 
> account name “FUND1" be the same in the income/Expense and Asset 
> accounts.  I know you may not like this, but this is the way the APR 
> expects things to be set up.  I think your reinvested dividends 
> example might work better in this case.  I know I’ve tested that sort 
> of transaction and it works fine, although I can’t guarantee that my 
> example is exactly the same as yours would be in that case.
As I said at the beginning of this discussion, I prefer my hierarchy.
I didn't find any trouble till now about leaf account name (i.e. "FUND 
1" in Asset ed "FUND 1:Fee/Commission" in Income account). APR seems to 
work fine. What should I check and find?
>
> Third, as I said above it’s probably not going to be reasonable to buy 
> or sell multiple securities in the same transaction so some sort of 
> holding account for the assets is going to be necessary.  In my case I 
> use the parent account of the securities accounts as the account to 
> hold the assets used in the purchase or sale.  I record a transfer 
> from my bank account to my equivalent of “Broker DEF” and then record 
> a purchase or sale of “FUND n” using “Broker DEF” as the source or 
> destination of funds.  This actually models real life better in my 
> case.  I send money to my broker who deposits it in my account. 
>  Sometime after this (or before) the broker buys or sells the asset 
> using money that is (or soon will be) in my account.  Usually the 
> amount of money transferred from my bank account isn’t exactly the 
> same as the cost of the asset since my broker account already has a 
> cash balance.  The balance in “Broker DEF” represents this cash balance.
>
> For things like your sale of FUND 1 with assets used to purchase FUND 
> 2, I would deposit the assets from the sale in the broker account and 
> then use them to buy FUND 2.  This also models real life fairly well, 
> especially if the cost of FUND 2 isn’t exactly the same as the 
> proceeds from the sale of FUND 1 (which seems to be the usual case for 
> me).  This also makes it easy to record which fees go with the sale 
> and which fees go with the purchase.  It also simplifies recording any 
> capital gain from the sale.
>
I did some test like you before, but my situation is different. My 
Broker DEF balance must be zero, so it's more practice for me to 
concentrate all transfers from/to the real bank to the unique DUMMY Bank 
(if balance not zero some errors occur).
> I hope this sheds some light on things.  Perhaps some of this 
> information should go into the documentation.  If you have further 
> questions or comments, I’d be glad to hear them.
>
>           Mike
>
I agree and I hope documentation modifications too.
Thanks for your comments, best regards
Alberto