Re: Accounting Fees

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In Reply to: Re: Accounting Fees posted by Mark on April 06, 2000 at 08:46:17:

: : : : : : 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
: : :
: : :

: : Hi Mark,

: : Thanks for the reply.

: : I've also come across another small bug in Fund Manager 4.6.218 with the Price/Transactions Memo field. The problem occurs when adding new re-invested distributions but leaving the Memo field blank initially. When I come back to edit this transaction by adding a comment to the Memo field, then viewing the Price/Transaction display in Data Type: Investments mode, the newly added comment is not visible. But if you change the data mode to Distributions, the comment is visible.

: : For product enhancement, I'd really like to see the following feature enhancements:

: : * Autobackup to also include *.MM4 portfolio files.
: : * Add to customized, available options:
: : ROI yields for 2 & 4 year periods
: : Simple returns (not annualized) for 1, 3, 6 month return periods
: : (I'm begging you for this one!!)

: : Best regards as always,
: : Clive

: Hi Clive,
: Good catch, thank you. I too see this bug. We'll have it fixed for
: the next release. Thanks for the other feedback, we will especially try to
: get the simple returns added. Just an FYI, you may already know, but you
: can get the 2,4 year yields in a ROI report (not custom).

: Thanks,
: Mark
: --
: Mark Beiley
:
: Fund Manager for Windows 3.1x/95/98/NT
:
:

Hi Mark,

Personally, I setup Preferences, Yields for 1, 2, 6 month (hey, it would be great if the user could select simple or annualized yields on this screen too) and 1, 3, 5 year terms as my baseline setup for my ROI reports. I guess if I had more than 6 term periods available to setup, I'd add 2 and 4 year terms. If I want report variations on this, I can construct and memorize customized reports to fit the need.

Keep up the good work!

Regards,
Clive

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