Trial Balance does not include amount of Return of Capital Investment splits
John Ralls
jralls at ceridwen.fremont.ca.us
Mon May 15 23:42:00 EDT 2017
> On May 15, 2017, at 7:41 PM, Chris Good <chris.good at ozemail.com.au> wrote:
>
> Hi,
>
>
>
> I'm airing this before I raise a bug.
>
>
>
> I've noticed that if you do a Return of Capital transaction [1]
>
> I.e. Stock split with Shares=0, Price=0, Sell=Return of Capital value,
>
> the Trial Balance no longer balances by the value of the Return of Capital.
>
>
>
> The stock line value in the report does not include the Sell value of the
> RoT split.
>
>
>
> Can anyone throw any light on this?
>
>
>
> The Balance sheet also shows the incorrect asset value of the stock, but it
> still balances
>
> because it (incorrectly?) also shows Unrealised Gains in Equity with the
> value of the RoT.
>
>
>
> [1] https://www.gnucash.org/docs/v2.6/C/gnucash-guide/invest-retofcap.html
>
>
>
> Regards, Chris Good
A return of capital when booked that way creates an unrealized capital gain: You have the same number of shares but a lower basis. You can either recognize the capital gain or find a different way to record the RoC.
Regards,
John Ralls
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