[GNC] Combining Method in Chapter 11 and Standalone Security

[davidcousens49 at gmail.com]

Bite,

The overall methodology is the same although the calculation of the unrealized
gain or loss is slightly different from the example - there is no external
valuation just recording a stock price. A new valuation of a painting is
essentially the same as a change in an updated stock price stock price etc. To
calculate the unrealized gain or loss over a period it is the number of
securities held over the period x the difference between prices at the start and
end date of the period over which you evaluate the unrealized gains and losses
gain/loss = N*(price at end - price at start). You can choose any period which
is convenient for your purpose so long as you have obtained a price at the end
date of the period - it need not be at a fixed interval. The intervals do have
to be contiguous, i.e. the end date of one period is the start date of the next.
If you sell at a particular point it becomes a realized gain/loss for the number
of securities involved in the sell and the unrealized gain goes to zero for the
securities you have sold, but not for any you continue to hold and a buy
increases the number of securities in the calculation going forward. 
You will need to maintain your cost base for CGT purposes. To do this you would
use sub-accounts of the main stock account (of type stock) one for the recording
of the initial purchase cost and susequent any buy/sell operation and the second
to record the unrealized gains/losses as in Ch11. You will need a corresponding
income account which is not included in your taxable income against which the
unrealized gains and losses are recorded as in the Ch11 example.  A gain will
debit your security's unrealized gains/Losses account and credit your
Income:Unrelaized Gains and Losses account by the amount of the gain while a
loss will reverse the debit and credit accounts. As David T pointed out the
major problem is keeping the cost base evaluation valid if you are buying and
selling only part (lots) of the holding in any given security but this is
independent of the unrealized gains/losses.

David Cousens

On Fri, 2022-06-24 at 08:48 +0800, Gao Bite wrote:
> GnuCash developers & Maintainers:
> 
> Hello! I have found several issues when I am reading your "Tutorial and 
> Concepts Guide". When I reads methods in the 11th chapter,I have found 
> that its example is based on non-fungible asset like painting. However, 
> what I am expecting is that records capital gains for fungible 
> securities (stock, bonds, ETF, etc.). How can I apply method in this 
> chapter to these type of assets?
> 
> Yours,
> 
> Bite Gao
> June 19th, 2022
> 
> _______________________________________________
> 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.