[GNC] Trial Balance Issue with Fund Merger
David Carlson
david.carlson.417 at gmail.com
Wed Sep 1 18:54:10 EDT 2021
If the price in the price database is wrong for a particular day it can be
manually corrected in the price database tool If there are not too many
errors to deal with. I run into that when manually entering transactions
On Wed, Sep 1, 2021 at 4:50 PM Lisa Rowell <lisa.gives.in at gmail.com> wrote:
>
> On 9/1/2021 12:28 PM, John Ralls wrote:
> >
> >> On Sep 1, 2021, at 12:16 PM, John Ralls <jralls at ceridwen.us> wrote:
> >>
> >>
> >>
> >>> On Sep 1, 2021, at 11:15 AM, Lisa Rowell <lisa.gives.in at gmail.com>
> wrote:
> >>>
> >>>
> >>> On 9/1/2021 5:27 AM, Lisa Rowell wrote:
> >>>> On 8/31/2021 9:41 PM, John Ralls wrote:
> >>>>>> On Aug 31, 2021, at 8:32 PM, Lisa Rowell <lisa.gives.in at gmail.com>
> wrote:
> >>>>>>
> >>>>>> I'm working my way through my account history after a massive
> GnuCash import, straightening out issues with missing realized capital
> gains/losses and came across an event that I can't figure out how to
> properly handle.
> >>>>>>
> >>>>>> I held shares of a fund called Spartan 500 Index Investor Class
> (FSMKX) which merged with Spartan US Equity Index Investor Class (FUSEX) at
> some odd rate around 1:0.513. When I did the import, I ended up with an
> account for FSMKX and an account for FUSEX and a manually entered exchange
> transaction which did a sell of FSMKX shares and a buy of FUSEX shares with
> no share price. This got everything balanced out as far as share counts go,
> but now I'm finding it's showing up as being not correct in the Trial
> Balance. It looks to me like the exchange is being interpreted as if an
> actual sell event had taken place.
> >>>>>>
> >>>>>> Can GnuCash properly account for this? The case in the manual's
> More Complex Merger example is a bit different because the example stock
> continued to trade under the same symbol, so that solution doesn't map
> well. I found a past mailing list thread that said that the proper way to
> account for this is as a sell transaction of the going away fund and a buy
> transaction of the fund that lives on with an accompanying Realized Gain
> transaction. This doesn't seem right to me though since I didn't sell the
> shares and did not realize a gain and I don't even have prices for the time
> of the merger. In my way of looking at it, the gain calculation should come
> at the time of sale and be based on purchase price of the various share
> amounts, and not at the time of the merger, since that maps to the tax view
> of things where I live.
> >>>>>>
> >>>>>> I understand that GnuCash wouldn't be able to calculate the
> realized gains post merger, and I'm ok with doing that in a side
> spreadsheet, but am more looking for a way around the bogus realized gain
> entry at the time of merger just to make the Trial Balance happy.
> >>>>> If you're not too compulsive and since this is presumably ancient
> history in a personal book one simple way to deal with it would be to
> pretend that you bought the FUSEX in the first place and ignore the FSMKX,
> but that might be a little painful if you have a bunch of reinvested FSMKX
> dividend transactions that you'd also need to change.
> >>>>>
> >>>>> I've handled similar situations in the past by doing a simple
> transfer transaction between the two accounts, as in CR FSMKX 513 and DR
> FUSEX 1000. As long as there's no currency component to the transaction it
> shouldn't create a trading imbalance in the book currency.
> >>>>>
> >>>>> Regards,
> >>>>> John Ralls
> >>>> That solution was what worked for me for share transfers between
> brokerages, where the commodity was the same, but when I changed
> commodities it somehow shows up as a mismatch in the Trial Balance. I don't
> have a share price for the shares in either split so, in theory it
> shouldn't involve the book currency at all. I don't get it at all.
> >>>>
> >>>> I'm sure it's this transaction since the balances match on the
> previous day and the only other transaction on this date is a paycheck
> deposit in the book currency that's no where near the amount of the
> imbalance. The transaction is in the image attached, that's what you're
> advocating, right?
> >>>>
> >>>> Thanks.
> >>>>
> >>>> Lisa R.
> >>>>
> >>> Additional information:
> >>>
> >>> Removing the cross commodity sell/buy transaction does remove the
> Trial Balance discrepancy. Additionally I added up all of the purchase
> prices of shares of the fund being merged away and that amount does equal
> to the credit / debit difference in the report.
> >>>
> >> It is, but that doesn't quite work. Here's a sample that does:
> >> If you don't price the share transfer to the currency (USD in both
> examples) the trial balance logic assumes 0 and calculates a loss. To avoid
> that enter the book value of the shares you're transferring as a sell
> (credit) amount in the source split and a buy (debit) amount in the
> destination split:
> >>
> > Unfortunately my screen shot didn't make it to the list. It contained
> the following transactions:
> >
> > 1/23/19 Buy PIODX 1000 Brokerage Account 1000
> 25.0000 25,000.00 1,000
> > 2/28/19 Reinv PIODX 11.231 Brokerage Account 11.231
> 22.2598 250.00 1,011.231
> > 9/1/21 Transfer to PXXXX -1011.231
> 1,011.231 0
> > PXXXX 1971.211
> 12.8094 25,250.00
> > PIODX -1011.231
> 24.9698 25,250.00
> >
> > The last transaction is in split view showing the identical cash amounts
> for the two stock accounts. Enter the amounts and let GnuCash compute the
> prices to prevent rounding errors from causing a gain/loss.
> >
> > Regards,
> > John Ralls
>
> I got the image in email, and it cleared things up for me. It looks to
> me like you put in the sell book currency amount as not the value on the
> date of the merger, but rather the basis for the shares being converted,
> thus making the it look like there is no gain/loss being realized. I
> suspect this simplifies dealing with gains/loss calculation on the post
> merger shares as well.
>
> The one issue I see with this as a solution is that it creates incorrect
> prices in the price database, which I assume would mess up a Network
> Report. I'm not sure this bothers me in this case.
>
> Thanks for getting me back on track, it's greatly appreciated.
>
> Lisa R.
>
>
> >
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
--
David Carlson
More information about the gnucash-user
mailing list