gnucash/doc/RAW-NOTES
Linas Vepstas 629e1d185b testing 1 2 3
git-svn-id: svn+ssh://svn.gnucash.org/repo/gnucash/trunk@4159 57a11ea4-9604-0410-9ed3-97b8803252fd
2001-05-10 21:58:32 +00:00

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RAW NOTES
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These need to be beautified into real documentation.
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stock splits & cost basis
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OK, here's a question for accountants of various different countries:
What's the cost basis for a stock split? Does the rest of teh world do
it the way the US does it?
For eaxmple:
In Jan 1995 buy 100s stock for $10 per share
In July 1997 split 2-for-1
In August 1997, sell 120s stock for $30 per share
I beleive the following is correct for the united states:
My cost basis is $5 per share, and my gains of $25x120 are taxable
as long-term cap gains.
--- would there ever be a case where the cost basis should be $10 for
the first 100 shares, and $0 for the remainder?
--- would there ever be a case where the gains would be considered
'short-term' for some portion of the total?
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OK, that was easy. Here's the harder one: a spin-off:
For example:
In Jan 1995 buy 100s of stock A for $10 per share
In July 1997 receive 1s of stock B for every 20s of stock A.
Stock B is new, and will trade under its own new ticker symbol
as of the date of this split.
-- What's my cost basis for B? is it $0.000 ?
-- What's my cost basis for A? is it $10, or something else?
-- Are these questions supposed to be answered by company A,
or do I just 'guess'?
Note there is still an invarient:
(old price of A) * 20s == (new price of A) *20s + (price of B) * 1s
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Depreciation, Sinking Funds ...
On 21 Apr 2000 20:39:43 CDT, the world broke into rejoicing as
John Hasler <john@dhh.gt.org> said:
> Lauren writes:
> > I'm not familliar with sinking funds, but what makes them a bit different
> > from a book entry like depreciation (also somewhat virtual) is that they
> > are happening with real accounts that need to be reconciled against an
> > outside statement.
>
> I don't see that. While the purpose of a sinking fund may be to pay off
> some bonds in ten years and there may even exist a legal obligation to have
> it, the funds being transferred to it now have nothing to do with any
> outside statement.
>
> A sinking fund to pay off some bonds is pretty much the same thing as
> saving up to pay off the balloon payment on the morgage.
>
> When you transfer funds to your "Savings Goal" or your "Sinking Fund" you
> are transferring funds from one asset account to another. Just credit
> 'Cash' and debit 'Savings Goals:Honeymoon'.
The problem with proceeding to credit Cash and debit "Savings Goal" is
that this invalidates any reconciliation of Cash. I'd be game to do
this if I credited not Cash, but rather "Cash:Goals", a subaccount of
Cash that can be ignored when it needs to be,
For different purposes, I will want both to consider and ignore these
"funds reservations."
a) When making up a _budget_, I care about what funds are reserved for
particular purposes.
b) When trying to figure out if my bank account is going to be
overdrawn,
"reserved" funds are _irrelevant._
I would thus suggest that the "gentle user" use the budget system to
manage this rather than having these be "true" transactions in the
ledger.
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document the 'security' and the 'price quotes' fields.
fix em up too ...
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Instructins for how to do QIF import should be reviewed/redone
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typing + in the check-number field uses the next check number ..
xxx