[GNC] Capital Gains

D. sunfish62 at yahoo.com
Tue Mar 2 19:45:44 EST 2021


Record losses as negative income. 


-------- Original Message --------
From: gnu Gord <gnucashgord at gmail.com>
Sent: Tue Mar 02 19:10:49 EST 2021
To: David Cousens <davidcousens at bigpond.com>
Cc: gnucash-user at gnucash.org
Subject: Re: [GNC] Capital Gains

Thanks for the explanation.
I was trying to follow the example in Chapter 11 of the GnuCash
Documentation that seems to indicate the unrealized capital gains are
recorded in Assets:Fixed Assets... and I would record a transfer from
Income:Unrealized Gains...
However, I didn't understand how to record a loss. Would I make an entry in
the Income:Unrealized Gains as a negative amount or create an entry in an
Expenses:Unrealized Gains account? With a similar approach for realized
capital gains?

This is all just for my own personal records so, I guess, I could record it
anyway I like but I'd like to follow some sort of standard so I don't go
too far astray! 😉

Thanks again.

On Tue, Mar 2, 2021 at 3:39 PM David Cousens <davidcousens at bigpond.com>
wrote:

> gnuGord, David,
>
> There is nothing in accounting practice per se to stop you tracking
> unrealized gains or losses for your own purposes, e.g. management of your
> assets.
>
> It is just that they are not usually recognized for purposes like taxation
> and financial reporting as income or expenses for a business until they
> have
> actually been incurred, usually on the sale of the asset/stock
> involved.There are some cases in some jurisdictions where they are recorded
> for financial reporting in addition to realized gains and losses but this
> is
> not common. Capital gains taxes do not normally apply to unrealized gains
> or
> losses. The rules on this vary between jurisdictions and this is a case
> where local professioanl accounting advice is needed.
>
> If you are going to track them, you would normally do so against a
> sub-account of Equity labelled as "Unrealized Gains or Losses" (which may
> or
> may not in turn have sub-accounts for specific assets or asset classes
> depending on the detail you require). It would be also a good practice to
> have a sub-account totalling into the asset account for the particular
> asset
> to record unrealized gains and losses so that you can easily differentiate
> realized gains and losses from unrealized gains and losses in your accounts
> where you are using them to formulate input for taxation and financial
> reporting .
>
> The sale transaction which zeros the asset value and debits your bank or
> brokerage account then includes two additional splits which zero out  the
> unrealized gains and losses balances in the asset sub account and the
> Unrealized Gains and Losses account(s) in Equity.
>
> David Cousens
>
>
>
> -----
> David Cousens
> --
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