Re: calculations and rounding
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Posted by Daniel on January 25, 2000 at 19:38:18:
In Reply to: Re: calculations and rounding posted by Mark on January 25, 2000 at 08:43:18:
: :
: : I'm trying to figure out what I'm doing wrong. I'm trying to manually calculate
: : the "Tax Basis AVG (end)" using excel, and comparing it to Fund Manager.
: : I'm pretty darned close, but there appears to be some rounding differences. : : I have 3 decimal points for my shares, and 4 for share prices, and dollar values
: : only go to the $0.01. : : My values for "End Shares", "Average Purchase Price (btw)", "Purchases (btw)",
: : and "Redemptions (btw)" all match my number crunching, but the
: : "Tax Basis AVG (end)" value is slightly different. : : This should just be : : "Purchases (btw)" - ("Redemptions (btw)" * "Average Purchase Price (btw)") : : shouldn't it? Not sure why the differences. : : Thanks,
: : Daniel : Hi Daniel, : This figure (Tax Basis AVG (end)) is the cost basis, calculated using
: the average cost method, for the shares owned on the ending report date.
: The cost basis is the number of shares owned on this date times times the
: average purchase price of all previously purchased shares, back to the
: inception of the investment. If you have any account fees or return
: of capital distributions this will also affect the basis. Account fees
: will increase your cost basis, while return of dist. will decrease it. : The custom report field "Average Purchase Price (btw)" only averages
: the actual purchase price, not including commissions. The cost basis
: calculation includes commissions in your basis, so the basis will be
: slightly higher (by the amount of your commissions) than you will calculate
: using this field alone and the ending number of shares. You can also
: print out the "Commission Fees (btw)" to factor this in. : Thanks,
: Mark Hi Mark,
You'll have to forgive me if these are silly questions, I'm not an accountant
by trade. :) By "average cost method" I assume you just sum up all the
money going into the investment (purchases + re-invested distributions),
and divide by the total number of shares, and then round off (both internally
and in the displaying of the numbers) to whatever number of decimal places
is configured. Is this correct, or is the # of decimal places just for
display, and the actual number carried to 16 or 32 or whatever it is decimal
points? I guess what I'm trying to figure out, is are the numbers being displayed
to us by the program the actual numbers being used in the calculations,
or are they just rounded for display purposes, while the full precision is
kept in calculations? Thanks,
Daniel
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