[GNC] Trial Balance Issue with Fund Merger
Lisa Rowell
lisa.gives.in at gmail.com
Wed Sep 1 19:59:20 EDT 2021
Simple enough in my case. Thanks.
Lisa R
On 9/1/2021 3:54 PM, David Carlson wrote:
> 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
> <mailto: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
> <mailto:jralls at ceridwen.us>> wrote:
> >>
> >>
> >>
> >>> On Sep 1, 2021, at 11:15 AM, Lisa Rowell
> <lisa.gives.in at gmail.com <mailto: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 <mailto: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.
>
>
> >
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> --
> David Carlson
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