I am treating my Investments ( in shares) as inventory items.
I would like to revalue these shares at year end to provide for unrealised gains/ losses…
is their a way to capture this…
rightnow… i have created each shares as an inventory items attached to share investment…
thanks for answers
Yes, you create an Asset account called: “Share Holdings - Market Value Adj” and an Equity account called: “Share Holdings - Revaluation” and use a Journal Entry to enter the values.
You do a whole of portfolio value adjustment, not a per inventory item valuation adjustment
welll this is manual… and this was last idea… i am asking for any auto adjustment when ever i put a new rate in a new column…
thanks for reply
No, the adjustment is only an arbitrary figure (the next day will be different) therefore the actual inventory item values (purchase price) should not be adjusted.
Besides, just having a rate column wont create the double entry required
I understand what you are saying… i am talking of yearend rates to brought up to the actual rate prevailing on the year end…
and will record unrealised gains or losses…
thanks
There isn’t a prevailing “actual” rate on year end only a “market” rate hence the arbitrary figure.
The individual inventory items should always remain at their actual values so if you sell an inventory item tomorrow their inventory item values haven’t been polluted by market value adjustments.
I understand
we do take unrealosed profit and gains… yes we dont pay taxes but do consider for yearly performance
thanks
I do the same things. I have created accounts in balance sheet and in p&l for plus/minus from appreciation/depreciation. I insert data as journal entries
I have recently started building up investment portfolio and was trying to do accounting for this,
Carrying the previous comments trail, was just wondering if there is any such possibility to bring individual investments to market values (monthly/quarterly) and the entry gets passed as a memorandum entry on that set date. Thanks
There is a possibly but I wouldn’t do it individually, but on a portfolio wide basis.
First you need to create two accounts and then create a Journal for the valuation adjustment.
BS > Asset > Portfolio - Market Value Adj
BS > Equity > Portfolio - Revaluation
Then at the end of each period, you update the same Journal with new date and valuations.