Re-valuing a stock investment account

[lumc]

We have a stock portfolio of which we get monthly statements indicating total current value. We do not maintain the value of each stock, just the total portfolio amount. In these volatile times, the value fluctuates quite a bit each month. How can we readily update the monthly value in order to correctly reflect same for monthly reporting to the Council?

[JohnDMeyers]

Here's how we do it:

If the investment is in 01-1310-000, then ADD
01-1312-000 Unrealized Gain (loss) - (detail asset, level 5)
01-4950-000 Unrealized Gain (loss) - (detail income, level 4, closes to 3110 unrestricted)

Change 01-1310-000 to a level 5, detail, asset
ADD
01-1308-000 Stock Porfolio (GROUP,asset, level 4)


Assume a balance of $12,000 in 01-1310-000 and a market adjustment of $780.00 for a given month:
DB 01-1312-000 $780.00
CR 01-4950-000 $780.00

If the amount is a loss, simply reverse the DB and CR on the above accounts.

When you run your balance sheet, you will see the Grouping of the asset plus the adjustment in a sub-total amount.

Notice that it is always with respect to the $12,000 starting balance. In other words, if you adjust the GROUP amount to $12,780.00 and the next month, the portfolio is $12,580, you would make that month's entry $580.00, not -$200.00.

[jordan2k510]

We have a similar situation. We have a scholarship fund which receives distribution amounts per share of common stock usually as net investment income and return of capital. There is an income account 4250 Investment Interest level 5 (closes to 3110). Is there any reason not to use this accouont in place of 01-4950-000 Unrealized Gain (loss) - (detail income, level 4, closes to 3110 unrestricted)?

[JohnDMeyers]

I don't think there's any problem there, but I'm not an accountant. I just used an example of something our church CPA helped us setup.

The reason we picked 4950 at the bottom of the income accounts is because it's a market adjustment, rather than actual realized income. (transfers out of this account are years apart). If we transferred the money within the year as a regular practice, then, we may done it differently.

[jordan2k510]

Makes sense. Thanks

[brentbond]

Hi. In your example you say to let

01-4950-000 Unrealized Gain (loss) close to 3110 unrestricted

Since the money in 01-4950 is not "real" (since you have not cashed out any of the stock during the year), doesnt that throw 3110 off at the end of the year when any amount currently in 4950 would be transferred to 3110 and the 4950 would be starting at 0 for the new fiscal year?

Thanks for any help you can provide on this.