On Sun, 23 Apr 2000, Rob Browning wrote:
> OK, I wanted to figure out and document how to properly handle a stock
> split.
>
> Given a stock split, I can see that the stock register has an action
> field of Split, but I'm not sure what you're supposed to do with it.
Don't confuse "split" transactions with stock "splits". They are totally
different animals.
Stock splits are actually a special case of a tax free exchange.
There are really two different assets, "old" shares and "new" shares.
When the stock splits, you trade old shares for new shares.
A currency devaluation is the same thing, a reverse split.
You exchange 1000 old lira for 1 new LIRA. The confusion comes from
the fact that common usage uses the same name for both currencies.
As for stock, I think we need to treat it differently from cash.
With cash, you don't care when you acquired it and it makes no
difference which "dollar" you spent. FIFO or LIFO, or any other scheme
just are not used. However, for inventory item, tracking the individual
> It looks like we may need special case handling for transactions with
> action "split". A stock split doesn't really seem like a double-entry
> event. I'll go see what the engine does.
>
> Thoughts?
items IS important.
If the database cannot handle this, then it is not capable of doing its
whole job. We MUST extend the engine to handle these kinds of items --
inventory for business and stock for individuals.
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