2022-10-08 GnuCash IRC logs
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00:56:10 <chris> CDB-Man: in your test book can you please review the capgains amounts - looks like the assistant is putting in the incorrect column during short.
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01:30:44 <CDB-Man> What am I supposed to review? My book would be correct given I manually created the transactions?
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02:01:56 <chris> CDB-Man: IIUC your SPY1 and SPY2 are meant to match (except for cash-in-lieu and div reinvestment). however capgains signs are opposite on SPY2 for shorted transactions.
02:02:37 <CDB-Man> Right. Spy 2 is an upload as of a point in time during testing
02:02:47 <CDB-Man> So it's "not complete" yet
02:03:12 <CDB-Man> As I am still kicking bugs and got "stuck" at the stock splits
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02:03:48 <CDB-Man> I've yet to have a chance to test after you fixed the double negative issue
02:05:53 <chris> The fix was the stock-amt being modified twice during stock splits, now fixed.
02:06:06 <CDB-Man> Yeah, that's the one
02:06:17 <CDB-Man> I've yet to have time to test since you pushed that fix
02:06:49 <chris> The capgains signs were always a sore point for me - should it be pos or neg when the actual price goes up? should the capgains *value* in the transaction be Dr/Cr when cover-buy if the actual price has increased?
02:07:21 <CDB-Man> The cap gains are DR when you lose money
02:07:37 <CDB-Man> In a short, you lose money if the price rises
02:08:19 <CDB-Man> In a long, you lose money when the price falls
02:08:24 <chris> The UI should clarify this
02:08:34 <CDB-Man> Both loss situations are a DR
02:08:53 <chris> How would you word the explanation for capgains during short?
02:09:46 <chris> "Please enter the capgains amt. Please input a negative amount if the actual/market price less than the cost basis of the units being sold/cover bought"
02:09:59 <CDB-Man> "A capital gain is realized when the proceeds of the transaction are greater than its cost basis."
02:10:21 <chris> ^ but what about the sign of the number in the ui?
02:10:25 <CDB-Man> The inverse statement should then follow
02:10:43 <CDB-Man> That statement is sign agnostic and can apply to both long and short
02:11:02 <chris> ^ for a CPA maybe ^_^
02:11:13 <chris> very confusing for mortals in a short
02:11:37 <CDB-Man> If you want to take a "positive is good" approach to the UI
02:11:55 <CDB-Man> You could make all gains positive values entered as CR
02:12:07 <chris> ^ yes "positive is good" vs "positive means market price has increased" -- dunno which one is better
02:12:20 <CDB-Man> However If you want to align CR is negative, do the reverse
02:13:39 <chris> AFAIU the current approach is "positive means market price has increased" and should be switched to "positive means profit"
02:13:52 <chris> (^ for the non-CPA definition of 'profit' :-o)
02:13:52 <CDB-Man> I'm not at my computer, I'd need to think about it in front of the input screen to have an opinion which one is more intuitive
02:14:22 <chris> Ok
02:14:25 <CDB-Man> It's 2am here I'm on my mobile heading to bed
02:14:44 <chris> nite nite!
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02:22:21 <chris> CDB-Man: to make things more intuitive I think capgains input in UI should be Positive when the investor has "made some money". This applies to fees as well - should always be positive to indicate the broker makes some money.
02:46:18 <CDB-Man> I think fees should be opposite sign from cap gain (ie negative in this case) as they always subtract from profit
03:09:42 <chris> CDB-Man: I'm not sure this is intuitive - in my view Fees>0 always and Capgains>0 when I've made a sound financial decision
03:10:58 <chris> here's another mathematical concept: the capgains should be either (1) manually calculated via lots, or (2) *could* be derived from the avg-cost-basis using the ifrs report
03:11:47 <chris> I like (2) because ISTM there's a "chronological fairness" ascertaining the gains - the gains can always be derived from the spreadsheet
03:12:16 <chris> but users who use lots may input any capgains they want.
03:12:52 <chris> except when the last lot is sold, the capgain *must* be deriveable from the lot activity
03:14:07 <chris> I'm not particularly fussed about determining this last lot cap gain, but I wonder if there's a magic formula somewhere which would inform the user that the capgains are wrong somewhere
03:22:46 <chris> ^ just a thought experiment
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10:48:07 <CDB-Man> We should not get into the business of determining the gain amount
10:48:14 <CDB-Man> As this can be country specific
10:49:02 <CDB-Man> Fees as a positive input could work
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12:27:32 <chris> CDB-Man: https://imgur.com/hX79brq.png
12:32:43 <CDB-Man> I'm really not a fan of calculating or validating the accuracy of capital gains
12:34:25 <CDB-Man> What makes you say a gain of $2k is impossible? The stock price could skyrocket
12:35:07 <CDB-Man> If the price rises to $3000/share you're going to get a massive gain
12:41:20 <chris> because the assistant has knowledge of: old transactions, and current sell amount and value
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12:43:42 <chris> it *may* be impossible to validate though if there are complex splits & mergers, I agree
12:49:40 <chris> anyway as you can see it bothers me (slightly) there's no sanity check for capgain, cf other fields have to balance their Dr/Cr.
12:49:42 <chris> gtg
12:54:33 <CDB-Man> Cap gain is inherently a wild card
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