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Cost valuation of investments RRS feed

  • Question

  • How is the cost valued please? On buying / selling, is the cost price based on average, last in last out, first in first out please?
    Wednesday, June 10, 2020 7:23 AM

All replies

  • This area of Money is best described as 'opaque' ~ what Money does if you deliberately choose NOT to accept FIFO is probably anybody's guess.

    Your best bet is to create 'Reports' identifying purchase or sale price, date, quantity etc ~ then export the Report and open it in Excel ~ then handle the data in the legally appropriate manner for your particular jurisdiction.  For example, HMRC in UK will expect you to 'pool' multiple purchases and this IS NOT exactly the same as averaging, certainly not if you are buying into and selling out of a particular share multiple times in a single financial year.

    Teabag  

    Wednesday, June 10, 2020 12:46 PM
  • This area of Money is best described as 'opaque' ~ what Money does if you deliberately choose NOT to accept FIFO is probably anybody's guess.

    Your best bet is to create 'Reports' identifying purchase or sale price, date, quantity etc ~ then export the Report and open it in Excel ~ then handle the data in the legally appropriate manner for your particular jurisdiction.  For example, HMRC in UK will expect you to 'pool' multiple purchases and this IS NOT exactly the same as averaging, certainly not if you are buying into and selling out of a particular share multiple times in a single financial year.

    Teabag  

    HMRC, for a change, is not an issue as these are tax free (ISA etc.) investments. I get different values in Money and portfolio in Hargreaves Landsdown - hence this question here.
    Wednesday, June 10, 2020 2:11 PM
  • In 'Investment->Details' you can choose between 'Average Cost Basis (Double Category)', 'Average Cost Basis (Single Category)' and 'Actual Cost Basis'. In the past I've calculated any capital gains myself and then selected whichever of these three options gives the correct answer.

    Regards.


    Jonathan.

    Wednesday, June 10, 2020 2:27 PM
  • In 'Investment->Details' you can choose between 'Average Cost Basis (Double Category)', 'Average Cost Basis (Single Category)' and 'Actual Cost Basis'. In the past I've calculated any capital gains myself and then selected whichever of these three options gives the correct answer.

    Regards.


    Jonathan.

    Apologies but I cannot seem to find this? Where is the Investment you mention please?
    Wednesday, June 10, 2020 3:07 PM
  • Right-click on an investment in the Portfolio and then select 'See Details'. You'll then be taken to the details page for the investment where the cost basis calculation can be chosen.

    Regards,


    Jonathan.

    Wednesday, June 10, 2020 5:17 PM
  • Right-click on an investment in the Portfolio and then select 'See Details'. You'll then be taken to the details page for the investment where the cost basis calculation can be chosen.

    Regards,


    Jonathan.

    Jonathan

    Still not getting it. I am using US version of sunset with £ as the currency. Are you using a UK version? Is there a way to see a snapshot please?

    Wednesday, June 10, 2020 5:40 PM
  • OK I can see what the issue is - the UK editions of Money 2004 and 2005 have the option in the investment details to select the cost basis type but this has unfortunately not been included in Sunset.

    Regards,


    Jonathan.

    Wednesday, June 10, 2020 6:23 PM
  • OK I can see what the issue is - the UK editions of Money 2004 and 2005 have the option in the investment details to select the cost basis type but this has unfortunately not been included in Sunset.

    Regards,


    Jonathan.

    I only partially follow this discussion.

    In Sunset and other US versions, the "basis" matters when you sell. It would also matter in wondering what the basis is if you were to sell.

    When you sell Stock (shares) you can choose to select which lots are being sold, unless you have selected to always use FIFO. I choose which lots, and my broker also allows me to specify which lots are to be sold if selling part.

    Mutual Funds (OEIC) can be the same way, or can be one of the average methods permitted by US tax law.

    There are UK tax methods that Sunset does not support, but I expect specific identification may let you get close.

    The Cost Basis column of the Portfolio is the cost basis of the shares that have not yet been sold.

    The Capital Gains Estimator lets you see the basis of the various tax lots and what the CG would be if you sold some shares.

    Wednesday, June 10, 2020 6:50 PM
    Moderator