[GNC] unrealized gain / losses for mutual funds

[Michael or Penny Novack]

>> These points being said, there have been suggestions made in this 
>> list by others more qualified than I on the circumstances in which a 
>> user might need to track unrealized gains and account for them on an 
>> ongoing basis. I believe the term they used was "mark to market." You 
>> might look for those threads in the list archives.


Not just "mark to market", and in fact, it is so long since I had to 
look at this, I am not sure that in the example I gave you also had to 
"mark to market" (include changes in the price of the commodity). It has 
been many decades since I had to worry about things like what was needed 
to figure "personal property tax" on livestock. I'm in my late 70's now, 
can't remember << and in any case, for us it was "incidental", not 
primary economic activity, so followed those rules--- I wrote software 
for my living >>

Look, if you have  a thousand pounds of silver, if you don't buy or sell 
any, the quantity of silver remains constant, and any change in value 
would be due to changes in the price of silver.

But if you had a thousand acres of woodland, currently forested at 5,000 
board feet/acre (young trees, many below marketable size) some  years 
down the road there might be 10,000 board feet/acre (trees that were 
marketable, now larger AND some that were below market size now 
marketable size). This is in addition to the "mark to market" from 
changes like the price per board foot of that sort of wood going from 
$200/kboard feet to $250/kboard feet.

In other words, having a thousand pounds of silver  is not the same as 
having a thousand head of cattle. If you have 1000 pounds of silver and 
five years later you sell 200 pounds of silver, how many pounds of 
silver do you have left? (you can answer that). But if you have 1000 
head of cattle and five years later you sell 200 head, how many do you 
have left? (not enough information; how many were born and how many died 
in those five years). That is a separate matter from the price of beef 
on the hoof.

Michael D Novack