[GNC] unrealized gain / losses for mutual funds

[Michael or Penny Novack]

On 5/15/2022 11:15 AM, Andrea Borgia wrote:
> Trying to improve my book-keeping, I would like to tackle this issue 
> now so I went to the documentation, precisely "11.4.1. Unrealized Gains".
>
> Problem is, the example applies to a painting, that is an object whose 
> value changes, not shares whose number remains constant but whose 
> value changes, thus leading to a change in total valuation.
>
> Since the end goal is to derive unrealized P&L and then include those 
> in the economic result for the year, I thought I could record a fake 
> sale, after all at book opening the next year I do a fake purchase 
> (with same price, just one day apart). If this makes sense, how do I 
> compute the P&L given the new price? Must I do that manually with a 
> split or is there some kind of assistance by GnuCash? 


Let's try to clarify WHAT you are trying to do before considering the "how".

I am taking a GUESS as to what you want (and where you want to see it). 
You need to correct what is wrong about the guess. Asking "is this what 
you want?" and then refining that is how a "business analyst" works << 
the client actually knows the answer, but not until prompted by the 
analyst's questions >> You ave a retired senior business analyst here.

Is your situation such that reports based solely on actuals would 
present a grossly distorted picture of your financial situation.? In 
other words, things like the unrealized gains of an investment might be 
too large a fraction to be ignored? << this is common for the very 
wealthy who structure things to minimize their income taxes >>

In other words, you want a statement of income and expenses to show 
these unrealized gains (but of course separate from actual income which 
might be subject to taxation?

If THIS is what you want, you would NOT have to arrange a "fake sale" to 
do this. You would partition "income" into ":real income" and 
"unrealized income" << all your regular income accounts would be 
children of ":real" . Likewise your "pictures" asset account (I take it 
that this is a mutual fund investing in "unfungible assets" like 
artworks) you have a "basis" account for what you paid for your shares 
and a sibling account for "estimated unrealized gain"

You would enter an adjustment at year end, quarter end, etc. that debits 
this asset account (unrealized gains) and credits the unrealized income. 
BTW, for historical reasons these adjustment known as "journal 
transactions". You might be doing this following receipt of a statement 
form the manager of this fund.

Michael D Novack

PS: If this ISN'T what you are trying to do, say so, but please note 
that I might not get back to answering for a couple days. About to be 
tied up in a bunch of board meetings, committee meetings, etc. one after 
the other. That's what happens when you retire, they draft you for 
things like being on boards, committees, etc. and sometimes you get a 
bunch of meetings back to back.