Thanks for link. I think I now understand the idea here a bit better based
on your example. By applying it to my case I manage to get Beancount to
balance. However when I still look the balance in Fava GUI, it says that my
Assets:Nordnet:Vincit account contains 61.90 EUR and 104 VINCIT lots which
I think is wrong? Whereas shouldn't the EUR amount from my bank account be
converted to VINCIT lots?
My current transactions are as follow:
2018-01-01 open Assets:Vincit:Options:Unvested
2018-01-01 open Assets:Vincit:Options:Vested
2018-01-01 open Assets:Vincit:Options
2018-01-01 open Income:Vincit:Options
2018-01-01 open Income:Nordnet:Vincit:Gains EUR
2018-01-01 open Expenses:Options:Exercise VINCIT_OPTIOT
2018-05-25 * "Vincit options grant"
Assets:Vincit:Options:Unvested 10 VINCIT_OPTIOT
Income:Vincit:Options
2021-03-31 * "Vincit options vesting"
Assets:Vincit:Options:Unvested -10 VINCIT_OPTIOT
Assets:Vincit:Options:Vested 10 VINCIT_OPTIOT
2021-05-10 * "Vincit options exercise "
Assets:Vincit:Options:Vested -10 VINCIT_OPTIOT
Expenses:Options:Exercise 10 VINCIT_OPTIOT ; We "spend" our option
to be able to purchase the stock at the strike price. So it's an expense.
Assets:Nordnet:Vincit 10 VINCIT {6.19 EUR}
Assets:BankAccount -61.90 EUR ; bank account cash used to exercise the
options
sunnuntai 23. toukokuuta 2021 klo 3.03.45 UTC+3 redst...@gmail.com
kirjoitti:
> Here is my post
> <https://groups.google.com/g/ledger-cli/c/zQHC7S80t90/m/6F-2S3N9UQoJ> in
> the thread you linked to. It contains and example of the entire lifecycle
> of an ISO (grant -> vest -> exercise -> sale). Though I'm not familiar with
> the details of your options, the options you describe sound very similar to
> ISOs in the US.
>
> The example above should solve all the problems that you brought up. Your
> transaction purchases VINCIT_OPTIONS at 0.619 EUR, and this may be the
> source of the confusion: when exercising, you are buying VINCIT, not
> VINCINT_OPTIONS, at a price of 0.619, even though the fair market value at
> that time is higher (9.56 EUR). The example I linked above models this in
> double entry book keeping. I'm wondering if you've had a chance to try it,
> and if so, what you ran into?
>
> On Saturday, May 22, 2021 at 5:01:53 AM UTC-7 Tuomas Salmi wrote:
>
>> Any comment/help for this?
>>
>> torstai 13. toukokuuta 2021 klo 19.46.37 UTC+3 Tuomas Salmi kirjoitti:
>>
>>> Hi Martin, I finally had time to get back to this and I found this
>>> discussion you probably referred to:
>>> https://groups.google.com/g/ledger-cli/c/zQHC7S80t90/m/3Ft8Tyr562sJ
>>>
>>> This seems to almost make sense to me but I couldn't get this to work as
>>> I expected. Not sure if the problem is in my ledger or my understanding of
>>> exercising options. Either way I hope you could help a bit:
>>>
>>> For my case I have the following situation:
>>> Options: 10
>>> Strike price: 6.19
>>> Cost basis 6.19/10 = 0.619
>>> Market value at the time of exercise: 9.56 EUR
>>>
>>> And I tried the following:
>>>
>>> 2018-01-01 open Income:Vincit:OptionsVesting
>>> 2018-01-01 open Income:Nordnet:Vincit:Gains EUR
>>> 2018-01-01 open Expenses:OptionsExercise EUR
>>>
>>> 2021-03-31 * "Acquire options"
>>> Assets:Nordnet:VincitOptions 10 VINCIT_OPTIONS {0.619 EUR}
>>> Income:Vincit:OptionsVesting
>>>
>>> 2021-05-10 * "Exercise options"
>>> Assets:Nordnet:VincitOptions -10 VINCIT_OPTIONS {0.619 EUR} @ 9.56 EUR
>>> Assets:Nordnet:Vincit 10 VINCIT { 9.56 EUR }
>>> Income:Nordnet:Vincit:Gains -27.51 EUR
>>> Expenses:OptionsExercise -61.90 EUR
>>>
>>> Beancount accepts this but when I checkout my Fava balance sheet I see
>>> following:
>>> Assets:Nordnet:Vincit 104 VINCIT (should be 104 + 10 = 114 VINCIT) and
>>> in EUR column there is "95.60"
>>> Assets:Nordnet:VincitOptions 0 (this seems ok since I exercised them)
>>>
>>> I suppose this might be some conceptual misunderstanding I have but when
>>> I get more VINCIT stocks by either exercising or buying them, shouldn't
>>> they just be added up to the VINCIT account as units in my ledger and not
>>> as EURs?
>>> Another thing I don't really get is the Gains part of the exercise
>>> transaction. I mean of course I gain value by exercising the option by
>>> lower value than its current market price, but shouldn't that just show up
>>> as a gain in the value of my stock position and not as direct income since
>>> I'm not selling the stocks immediately on exercise? Like shouldn't the
>>> exercise leas to 10 new lots of VINCIT with value of 6.19 EUR?
>>>
>>>
>>> keskiviikko 7. huhtikuuta 2021 klo 4.00.34 UTC+3 bl...@furius.ca
>>> kirjoitti:
>>>
>>>> Search on the mailing-list I'm pretty sure this came up before.
>>>> I'd have recognized call options using a unique symbol at zero cost and
>>>> 6.19 is the strike.
>>>> Then on exercise reducing them while simultaneously opening a position
>>>> in the company at the current value, reducing the cash account by the
>>>> strike times the number of units and adding a posting for the profit to be
>>>> recognized as income.
>>>>
>>>>
>>>> On Tue, Apr 6, 2021 at 6:27 AM Tuomas Salmi <salmi....@gmail.com>
>>>> wrote:
>>>>
>>>>> Thanks for reply. Looks like my terminology is a bit off since I this
>>>>> is first time I have had to think about this in English.
>>>>> What I meant was that my employer gave me 10 options which let me to
>>>>> purchase stocks with the fixed price which was set when options were
>>>>> given
>>>>> to me. In this case I can buy COMPANY for 6.19 euros regardless of the
>>>>> real
>>>>> rate of the COMPANY in stock market. So I think you are right about
>>>>> "exercise" being the correct term.
>>>>>
>>>>> > Your transactions seems incomplete to me.
>>>>> > You will want to represent the options themselves using a unique
>>>>> instrument name with the strike, side (put/call) and expiration
>>>>> data embedded in the symbol.
>>>>> > You will want to carefully adjust the sales price vs. cost basis and
>>>>> recognize the P/L to the right account if this is a company incentive (I
>>>>> believe the initial P/L may be treated as income tax, not gains).
>>>>>
>>>>> Do you have any example of representing options like this? I think in
>>>>> Finland the initial P/L is treated as income tax. However, for my
>>>>> personal
>>>>> ledger in general I'm not too concerned about taxing details since almost
>>>>> all personal taxing process is done by taxing organization in Finland. So
>>>>> I
>>>>> don't usually track those details in my personal ledger and I'm happy
>>>>> with
>>>>> having the correct balances on each of my accounts. However, I suppose I
>>>>> might have to be a bit more careful in this case.
>>>>>
>>>>> To be honest I think for my purposes it would be enough to just add 10
>>>>> COMPANY stocks to my Assets:OtherBank:Company with correct sales price
>>>>> and
>>>>> deduce the 61.90e from my cash bank account.
>>>>>
>>>>> maanantai 5. huhtikuuta 2021 klo 8.23.48 UTC+3 bl...@furius.ca
>>>>> kirjoitti:
>>>>>
>>>>>> Hi Tuomas,
>>>>>> I don't understand your terminology.
>>>>>> "Marking" is the process of valuing active positions for the purpose
>>>>>> of calculation unrealized P/L.
>>>>>> I think you mean "exercise."
>>>>>>
>>>>>> On Sun, Apr 4, 2021 at 6:49 AM Tuomas Salmi <salmi....@gmail.com>
>>>>>> wrote:
>>>>>>
>>>>>>>
>>>>>>> Recently my employer let me to mark some stock options I had and I'm
>>>>>>> having trouble to add them properly to the Beancount ledger.
>>>>>>>
>>>>>>> Lets say I had 10 options letting me to buy 10 stocks of COMPANY.
>>>>>>> Looks like the transaction will be made first to my incentive bank
>>>>>>> account
>>>>>>> and then I'll transfer the bought stocks to my actual bank which holds
>>>>>>> my
>>>>>>> stocks.
>>>>>>>
>>>>>>> I tried the following:
>>>>>>>
>>>>>>> 2021-03-31 * "Mark options"
>>>>>>> Assets:OP:BankAccount -61.90 EUR
>>>>>>> Assets:IncentiveBankAccount:Company 10 COMPANY {6.19 EUR}
>>>>>>>
>>>>>>> 2021-04-01 * "Transfer stocks to other bank account"
>>>>>>> Assets:IncentiveBankAccount:Company
>>>>>>> -10 COMPANY
>>>>>>> Assets:OtherBank:Company 10 COMPANY
>>>>>>>
>>>>>>> The beancheck accepts this syntax. However when I check the account
>>>>>>> balances in the Fava, I see that the end balance for
>>>>>>> "IncentiveBankAccount"
>>>>>>> is:
>>>>>>> 61.90 EUR
>>>>>>> -10 COMPANY
>>>>>>>
>>>>>>> So it seems like the Beancount will use two separate units for the
>>>>>>> "IncentiveBankAccount".
>>>>>>>
>>>>>>
>>>>>> You need to use the cost basis on your transfer.
>>>>>>
>>>>>> Your transactions seems incomplete to me.
>>>>>> You will want to represent the options themselves using a unique
>>>>>> instrument name with the strike, side (put/call) and expiration
>>>>>> data embedded in the symbol.
>>>>>> You will want to carefully adjust the sales price vs. cost basis and
>>>>>> recognize the P/L to the right account if this is a company incentive (I
>>>>>> believe the initial P/L may be treated as income tax, not gains).
>>>>>> There is much to say.
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>>>
>>>>>>> So how should I mark the following transactions to get all this
>>>>>>> sorted out:
>>>>>>> 1. Pay 61.90 EUR from my cash bank account to buy 10 COMPANY stocks
>>>>>>> to IncentiveBankAccount account (balance -> 10 COMPANY)
>>>>>>> 2. Move 10 COMPANY from IncentiveBankAccount to OtherBank:Company
>>>>>>> (balance 10 -> 0 COMPANY in incentive)
>>>>>>>
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>>>>>>>
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>>>>>>> .
>>>>>>>
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>>>> To view this discussion on the web visit
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>>>>>
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>>>>> .
>>>>>
>>>>
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