[GNC] Why does the sample "investments" account tree have intermediate "Bond", "Mutual Fund", and "Stock" accounts?

Jim DeLaHunt list+gnucash at jdlh.com
Sun Aug 14 22:26:42 EDT 2022


Thank you for your example, Kalpesh.

On 2022-08-14 17:11, Kalpesh Patel wrote:
> Jim,
>
>   
>
> In my case I actually have additional intermediate accounts like so:
>
>   
>
> * Assets
>
>       o Investments
>
>           + Brokerage account
>
>               # Bond
>
>               # Mutual Fund
>
>                   - Fidler
>
>                      * FXAIX
>
>                   - Vans
>
>                      * VFIAX
>
>               # Stock
>
>                   - Fidler
>
>                      * AMZN
>
>                   - Vans
>
>                      * AMZN

Do "Fidler" and "Vans" correspond to brokerage firms which hold your 
shares and help you do trades?  Do you, for example, get a monthly 
statement from "Fidler" which lists your FXAIX and AMZN holdings with 
them, and another monthly statement from "Vans" which lists your VFIAX 
and AMZN holdings over there?

If so, then I think you are putting your security sub-accounts directly 
under your brokerage account. And in that case, what value do you find 
in the parent accounts of "Mutual Fund" and "Stock" and "Brokerage 
account"?  Why did you choose not to have the parents of "Vans" and 
"Fidler" be "Investments"?



>   
>
>   
>
>   
>
> In my case it allows me to track my transactions accurately in terms of
> dates (as David T hinted) since I can enter in my bank account to say for
> example I transferred $500 from '/Asset/Current Assets/Checking Account/ABC
> Bank' to intermediary account '/Assets/Investments/Brokerage Account/Mutual
> Fund/Fidler' account and then some time later I can purchase mutual funds
> from the cash that was in the '/Assets/Investments/Brokerage Account/Mutual
> Fund/Fidler' account into '/Assets/Investments/Brokerage Account/Mutual
> Fund/Fidler/FXAIX' mutual fund. Now my ledger with respect to bank and
> brokerage account is accurate in terms of when Fidler withdrew the monies
> from the bank versus when I actually bought the mutual funds from Fidler.
> Same concept would go for stocks or any other type of security.
>
>   
>
> This is a bit loose in terms of transaction for withdrawal of the monies
> from the bank account. If you want to have an exact ledger in your account
> as institutions and have provision to account for transfer time between
> institutions (ie transfer of monies from bank to brokerage account) then it
> would be total of six transactions: a withdrawal of cash from a bank account
> into a general purpose contra account, general purpose contra account into
> to intermediary brokerage account and then finally from intermediary
> brokerage account into security account.
>
>   
>
> Now in the accounts page I can see what my situation is like for mutual
> funds, stocks, bond, etc.
>
>   
>
> Hope this helps.
>
>   
>
> ------------------------------
>
> Message: 5
>
> Date: Sun, 14 Aug 2022 08:57:59 +0300
>
> From: "David T." <sunfish62 at yahoo.com>
>
> To: gnucash-user at gnucash.org, Jim DeLaHunt <list+gnucash at jdlh.com>,
>
>                  Gnucash Users <gnucash-user at gnucash.org>
>
> Subject: Re: [GNC] Why does the sample "investments" account tree have
>
>                  intermediate "Bond", "Mutual Fund", and "Stock" accounts?
>
> Message-ID: <BC7865A3-BB01-4D43-A790-6B91F4D75DA6 at yahoo.com>
>
> Content-Type: text/plain; charset=utf-8
>
>   
>
> Jim,
>
>   
>
> I'll address a little of this from my non-technical, non-accountant
> perspective.
>
>   
>
> I don't know the rationale behind those intermediate accounts, and I don't
> use them. That said, each investment type behaves a little differently, and
> perhaps separating them makes some operations easier to manage. But I don't
> know.
>
>   
>
> As for the main brokerage account question, I will say that I mostly have
> followed the template format and put cash transactions into it, without
> noticeable problem. There is a camp of Gnucash users who feel strongly that
> one should only put transactions into leaf (lowest layer) accounts, and one
> of them will explain their reasoning, I'm sure.
>
>   
>
> I've experimented with using a subaccount for these transactions, but I
> don't like trying to find that cash account later on, since it ends up
> embedded in the alphabetical sequence of accounts. I could kludge the name
> for the cash account to bring it to the top, but that just annoys my
> aesthetic.
>
>   
>
> (For the record, I use account codes for most accounts, but not for
> commodities, and let commodity accounts sort by name. Assigning codes for
> commodities accounts is cumbersome, given a large set of
> commodities/accounts. Ideally, I'd assign a code just to the cash account
> and get it at the top, but the sorting puts nothing before something,
> leaving the cash account at the bottom. I don't know if I can sort by
> account type, but even if I did, I don't know how I'd sort the chart by code
> and then type...)
>
>   
>
> Best,
>
> David
>
>   
>
> On August 14, 2022 4:40:17 AM GMT+03:00, Jim DeLaHunt
> <list+gnucash at jdlh.com> wrote:
>
>> Hello, folks:
>> I have been using GnuCash for a long time, starting with the GnuCash
> template account tree and modifying it gradually, but never thinking hard
> about it. Until now. I am adding a bunch of investment accounts. This makes
> me look more closely at the template account structure depicted in
> <https://www.gnucash.org/docs/v4/C/gnucash-guide/invest-setup1.html>.
>
>> This structure is:
>> * Assets
>>      o Investments
>>          + Brokerage account
>>              # Bond
>>              # Mutual Fund
>>              # Stock
>>                  * AMZN
>> What is the reason for the template inserting the layer of subaccounts
> between "Brokerage account" and "AMZN" (for Amazon.com stock)? Why shouldn't
> the child accounts denominated in each security be directly under the
> "Brokerage account" account (as long as the parent account is denominated in
> the currency which the securities are priced in)?
>
>> For my own purposes, it seems simpler to me to have the per-security child
> accounts be directly under the "Brokerage account". Is there a rationale for
> the intermediate accounts which I am missing?
>
>> Also, in the template, the "Brokerage account" is of type "Bank", and
>> is not a placeholder. That seems to imply that cash and cash-equivalent
>> transactions should be applied directly to "Brokerage account". Somehow
>> I ended up making a child account "Cash CAD" (or "Cash USD", or
>> whichever), and applying all the cash-equivalent transaction there. My
>> equivalent of "Brokerage account" has no transactions, and is often a
>> placeholder account, and has account type "Asset" rather than "Bank".??
>> Is there a reason to put the cash transactions directly in the
>> brokerage account, or is this a matter of personal preference? (In
>> which case, I will keep the structure I have.)
>> Thank you in advance for your insight,
>> ???? ?Jim DeLaHunt
> ------------------------------
>
>   
>
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