Mr. D, Cousens:
I am sorry that I did not state what I expected from the income
recording well in the previous e-mail. I wish that you could read it
carefully and give me advice accordingly.
I purchase securities for speculation, which I anticipate their market
price and the ability to resell these securities for that price. Every
two weeks, I need to update the market price of my holding securities. I
need to increase (decrease) the securities' asset value. What's more, I
need to record changes in market value as an income. I need to be able
to display the value of income over time so that I can have a better
decision on investing.
However, I have some issues in recording my investing process in your
software. First of all, the built-in trading account generates gains and
losses only on the current exchange rate, so it is hard to display the
performance of the investment over time. While adjusting securities'
value affects the total asset's value standalone, recording the
investment income needs a corresponding asset account. This fact gives
me two choices: either detach the asset value from the accounting
equation or detach the securities' book value from their market value
(as the method in the tutorial displays).
I sincerely hope that there is a method to fix these incorrectnesses. I
would greatly appreciate it if you help me find these methods.
Yours,
Bite Gao
June 20th, 2022
On 2022-06-20 6:41, davidcousen...@gmail.com wrote:
Bite
The transaction to record this, if a profit or increase in value of the security
is to debit the security by the amount of the profit and to credit an income
account by the same amount. For a loss in value creidt the security account and
debit the income amount. The profit or loss is the product of the number of
securites held and the difference in prices between the date at which you are
recording the unrealized gain/loss and the price at the time you have previously
recorded a gain or loss Ultimately this traces back to the initail purchase
price.
You may find it useful to use a sub-account of the security (of the same type
account) totalling into the security account to record the unrealized gains and
losses so that you preserve the initial cost basis which you will likely need
for capital gains taxes in most jurisdiction. Unrealized gains and losses are
generally not taxable as income in most jurisdictions, so you would need an
Income account separate from any Income account structure which records income
for taxation purposes.
David Cousens
On Sun, 2022-06-19 at 21:56 +0800, Gao Bite wrote:
GnuCash developers & Maintainers:
Hello! I would like to record the unrealized profit & loss from
security investment directly into an income account. Could you please
tell me whether I am possible to do as above, and if possible, how I can
achieve this?
Yours,
Bite Gao
June 19th, 2022
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