Re: Accounting Fees
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Posted by Mark on April 04, 2000 at 21:52:48:
In Reply to: Re: Accounting Fees posted by Clive on April 04, 2000 at 12:26:48:
: : : I'm not sure of the correct method to enter the following transaction and end up with the correct adjusted cost base:
: : : This is a first time purchase of this no-load mutual fund.
: : : It has a one-time account opening fee of $40.00
: : : Total investment, including one-time fee is $5000.00
: : : Share price $15.79
: : : Total shares received 314.1229 : : : Please comment. : : : Regards,
: : : Clive : : Hi Clive,
: : You could choose to enter this account fee as a commission fee on
: : this initial purchase, or you could enter it as a separate transaction. : : case 1:
: : buy transaction for 314.1229 shares at 15.79 for $4960, and a commission fee of $40. : : case 2:
: : buy transaction for 314.1229 shares at 15.79 for $4960.
: : and
: : account fee transaction (non-reinvested) for -$40. : :
: : Either case will be accurate, and give you the correct cost basis.
: : Note the rounding errors here, you should record the value/shares accurately,
: : and let the share price "float". See "Recording Transactions Without Rounding
: : Errors" in the online help. : : Thanks,
: : Mark
: : --
: : Mark Beiley
: :
: : Fund Manager for Windows 3.1x/95/98/NT
: :
: : : Hi Mark, : I tried both of your suggested methods, however I get different cost basis values. : Case 1: I get a cost basis of $5,000 : Case 2: I get a cost basis of $4,960 : I think the correct cost basis calculation is $5,000 which includes the accounting fee. But for some reason the case 2 method does not include the accounting fee in the cost basis calculation. : Please comment on this. : Best regards,
: Clive Hi Clive,
Actually, you've pointed out a bug. Normally, account fees are added
into your cost basis. With this bug, an account fee recorded on
the same date as your very first investment, is not accounted for in the
basis. We will fix this in the next release. You can use case 1 above
for now. You can experiment with case 2, by putting the account fee for
1 or more days later than the original investment. Thanks,
Mark
--
Mark Beiley
Fund Manager for Windows 3.1x/95/98/NT
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