[GNC] asset discrepancy in change of year

[Andrea Borgia]

Il 11/04/21 18:41, John Ralls ha scritto:


> You may be confusing "recognized gains" and "realized gains". A realized gain (or loss) is the change in value between a buy and a sell transaction. In contrast an unrealized gain is the change in the value of an asset that you  still own. If you update prices in GnuCash then you can display the value of your assets at the latest price on the Accounts page and in various reports if you select "latest" as the price source. A recognized gain is a realized gain that you've correctly recorded with a pair of splits. A balance in a trading account indicates that you have unrecognized realized gains.

If I still hold all of the assets across year end, the trading account 
balance is most definitely pointing to unrealized gains only; in this 
context, what's the point in booking a split simply to recognize a gain 
which is not even realized?

Of course, the moment I sell some shares and hopefully make a profit I 
will have to record it explicitly.

But for the moment, that is for closing 2020, I think I'll use the 
trading account balance as a quick shortcut :)



> Your statement about recalculating the initial capital each year suggests marking to market, that is creating a transaction that recognizes the unrealized gain at the end of the year, changing the basis of the stocks. That's generally required only of banks and investment companies and it has substantial tax consequences. You should do so only with the advice and guidance of a locally-licensed accountant or tax advisor.

AFAIK in my case it has basically no tax consequences because:

1) my employer acts as a tax proxy: whatever sum the ministry of finance 
has to give back after tax declaration flows through them.

2) the bank handles taxes on capital gains: this actually happened to my 
father, the CG tax was directly debited with the sale.



> The problem described in the bug report is that even those trading account balances don't tell the whole story because they don't convert your USD realized gains to EUR and recognize the gain/loss on converting USD->EUR. As long as the amounts are small enough to not concern your tax authorities the discrepancy is somewhat academic, but if the amounts aren't small you should get professional advice about how to handle it.

John, I appreciate your care in pointing out that I need professional 
assistance tailored to my tax jurisdiction but, to the best of my 
knowledge, how I record stuff in gnucash has no effect on my taxes: I 
don't get to calculate those, only to record the amounts. Clearly, the 
moment this changes I'll have to be more rigorous, just not now.


This whole discussion had an unexpected side effect: after years of 
working with SAP (as a programmer) I finally understood why the 
accounting tables have two separate amount fields, DMBTR (amount in 
document currency, saved in another field) and WRBTR (amount in company 
currency). This way the exchange rate for each transaction is implicitly 
recorded, allowing for proper recognition of forex gains & losses.


Andrea.