@lubos Is there a reason the Investment
tab and Investment
Control accounts
is not able to show all essential investment data?
In particular, drill down on the system generated Profit and Loss
Investment gains (losses)
account shows
Closing Balance
and Gain / Loss
- in addition to
Investment
, Qty
, and Market value
Given Closing Balance
shows actual accounting transactions, it is essential information for all users in all jurisdictions. Please consider adding this information to the Investment
tab and Investment
Control accounts
.
There also appear to be a naming inconsistency between
- The
Fixed assets
Acquisition cost
and
Investments
Closing Balance
These two items contain the same thing but are given different names. Would it be possible to standardise on one name?
That uses average investment value to calculate realised gain/loss
In all cases the realised capital gains is a property of and specific to each actual sale transaction. As a result this accounting data must be attached to the investment sale transaction.
In every case the realised investment gain/loss is treated very differently to unrealised gain/loss. Any miss appropriation between realised and unrealised gain/loss is an accounting error which has a direct effect on income tax payable, so has very significant financial and legal implications.
As a result the Realized Investment Gains Summary
report is simply wrong in many jurisdictions and an inappropriate approach in all jurisdictions.
Imo in a general purpose accounting program it is not unreasonable the user identifies and enters purchase price data on the sales transaction. In Manager this can currently be done on the share sale transaction by
- Entering the sale amount as a
Fixed total
- Enter share PURCHASE
Unit price
. For UK this is the average unit price (Closing Balance
/ Qty
). For other jurisdiction it is actual purchase unit price of each lot currently owned (which requires the user to track what they have actually bought sold in the past)
- Enter desired quantity of each lot being sold. Ensure total quantity equals the total shares being sold
- Add a line item for realised capital gain/loss. Select an appropriate
Profit and Loss
account. Enter the balancing amount for this sale transaction
While it would be nice for Manager to automate share lot tracking but it is not unreasonable this is deferred. Perhaps to be reconsidered if lot tracking of Inventory items
is added in the future (a vaguely similar problem).
In the interim documenting how to record investment sales in Manger is probably adequate. The current system Profit and Loss
Investment gains (losses)
account should be renamed Investment unrealised gains (losses)
To illustrate
As an example of a share sale transaction consider
Date |
Transaction |
Qty |
Unit price |
Total |
1 Feb 2021 |
Buy Share 1 |
100 |
$85.00 |
$8,500 |
2 Feb 2025 |
Buy Share 1 |
100 |
$146.00 |
$14,600 |
16 Mar 2025 |
Sell Share 1 |
100 |
$135.00 |
$13,500 |
When entering the sales transaction into Manager the user specifies exactly how much of each lot is being sold.
- FIFO: Taxed realised capital gain $13,500 - 100 x $85 = $5,000
- LIFO: Taxed realised capital gain $13,500 - 100 x $146 = -$1,100 (ie realised capital loss $1,100)
- or a mixture of lots can be chosen to minimise the tax payable such as $13,500 - (19 x $85 + 81 x $146) = $59
- Note in the UK enter Average unit price =
Closing Balance
/ Qty
= $23,100/200 = $116 → Capital gain $13,500 - 100 x $116 = $1,950
In Manager the receipt is entered as shown below (for a mixed lot required declaring only $59 taxable realised capital gain)
Which shows on the summary page
Looking at the Profit and Loss report
in particular the last 5 comparator columns which all show changes from the start of the current financial year to various times within it, note
- Immediately prior to the share sale on 15/03/2025 the shares had loss $100 ie the unrealised gain for that period was ($100). After the sale on the 16/03/2025, a gain of $59 was realised which was exactly balanced by the unrealised gain going further negative to ($159). Which is the expected behaviour, a sale of stock valued at market price only coverts unrealised gain (loss) to realised gain (loss).
The Balance sheet report reflects the same behaviour ie the retained earnings does not change on stock valued at market price being sold.
For more details see attached Manger business file.
Note for the current financial year, to examine what Manager is actually doing