[GNC] DRP accounts, portfolio reports and making sense of the numbers

[Chris Good]

Message: 3
Date: Sat, 7 Aug 2021 10:39:50 +1000
From: Andrew Clark <ajfclark at gmail.com>
To: GnuCash users group <gnucash-user at gnucash.org>
Subject: [GNC] DRP accounts, portfolio reports and making sense of the
	numbers
Message-ID:
	<CAH1=eqKucTboNZk9mrX6kRRMVvCmXN5pRzGxy_fxaSPb=xBfvw at mail.gmail.com>
Content-Type: text/plain; charset="utf-8"

Somehow my previous email was sent before I had finished typing it.

I have an investment of NAB shares that I acquired as part of their employee
incentive program years ago and I'm trying to figure out the best way to
record it in GnuCash.

The shares were worth $3000 at the time of allotment. They were released to
me at the value of $2732.85. They pay a regular dividend twice a year. That
dividend is reinvested as part of a dividend reinvestment program (DRP).
Any remainder from the DRP is held over until the next cycle.

So take the payment on 2008-12-17.

There was 24.25 held over from the previous cycle.
The dividend was also 24.25.
Total to reinvest is 48.50.
Shares 2 @ 18.64 = 37.28
Remainder held until next cycle 48.50 - 37.28 = 11.22.

[image: image.png]

Now, in the portfolio report, if I set the date ot the date of that
transaction, I get:
[image: image.png]

'Money in' should be $2732.85 but it includes the 13.03 that was used from
the held over dividend? I don't feel like it should, as I have not
contributed any money into the system.

The accounts are laid out as below:

[image: image.png]

Should the DRP Holding account have a different type? Should it be located
somewhere else? Is there a better way to record this?

--
Cheers,

Andrew.
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------------------------------

Hi Andrew,

I'm also in Australia. I call "DRP Holding" "DRP Residual". I don't know
which is more correct.
This is for my personal accounts.
I am not an accountant. Please check with you accountant.

My structure is as follows:

Assets
    Investments
        Brokerage Investor1
            NAB
            ...
        DRP Residual
            NAB
            ....
        Franking Credit
            Investor1
            ...
Income
    Dividend
        NAB
            Franked
            Unfranked
        ...
Liabilities
    Franking Credit Tax Owed
        Investor1
        ...

As it is easy to restructure your chart of accounts just by changing
the account parent, give that a go (backup first).

As part of each dividend transaction, I:
1. only add 1 split for DRP Residual, which is the change in residual
2. Track Franking Credits:
    Assets:Investments:Franking Credit:Investor1    Dr
    Liabilities:Franking Credit Tax Owed:Investor1    Cr

After tax is paid and franking credits are used (30th June), clear out
franking credits
    Assets:Investments:Franking Credit:Investor1    Cr
    Liabilities:Franking Credit Tax Owed:Investor1    Dr

I use a different self-written system for tracking Franking credits so
you may like to add further subaccounts to your Franking Credit accounts for
stock code.

Regards, Chris Good