Andrew Sackville-West wrote:
On Fri, 17 Feb 2006 19:58:24 -0700
Mark Johnson <[EMAIL PROTECTED]> wrote:
[...]
Automatically, creating entries in the pricedb for any buy, sell or
"similar action" strikes me as a rather dicey thing to do. I offer two
similar recent use cases I have had to consider:
1. One of my mutual fund companies decided (correctly) that it had an
excessive number of indistinguishable funds. Therefore, two similar
funds were merged, with one surviving. I had units in the non-surviving
fund. These were exchanged for a different number of units of the
surviving fund (at a different price, of course). Now, this is an
exchange and not a buy/sell. I don't realize capital gains. So I wish
to record this in such a way that the cost basis of the new (to me) fund
is the same as the cost of the old fund. (This keeps the balance sheet
balancing, as I don't have capital gains to enter to balance it.) I
enter a split to two mutual fund accounts, showing one decreasing by the
number of surrendered units and the other increasing by the number of
units in the new fund. The dollar amounts shown in the buy and sell
columns are the cost basis of the fund. Note that if this were used to
create an automatic entry in the pricedb, it would not be the current
market price. It would be the (sadly higher) original cost. Thus, such
an automatic entry would not be appropriate in this use case.
I have another thought on this particular case. 1) a price db entry at this point is exactly what you want as it records your cost basis for the mutual fund. That is the number you need later for calculating capital gains, so you definitely want a record of that number.
I thought that gnucash used the buy transaction in the stock account's
register to calculate the cost basis. And the latest (or whatever
option you select) price in the pricedb to calculate the unrealized
gain. So it should be able to calculate the cost base without a pricedb
entry, but not the unrealized gain.
2) you can always come in the next day and record the current price for the
fund so that the pricedb shows the current value. Make sense? the only thing
you'll lose will be the price history. Its okay that you don't show the current
market price at the time of the transfer/exchange. you can always provide that
number later so that your reports show the current market value.
True. What about the possibility of reports based upon the pricedb
entries? Eg. a graph of the price history. Such entries would produce
unwelcome blips. I'm just thinking here about possible future features,
and, I suppose, the meaning of pricedb entries.
Your other e-mail indicated that pricedb entries could be automatically
created for buy and sell actions, and the user could be asked for
others. I think this is quite a reasonable solution. However, it still
leaves the possibility of an empty pricedb for some time with a new
mutual fund (created by a transfer from another as in my use case #1).
I believe that the report should be able to deal with this, and the way
in which you suggested is good.
Mark
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