investment tracking and withdrawals

[NeilZ]

So I'm still trying to wrap my head around how to correct the amount in our investment, and want to make sure I have the accounts set up properly in the new fund. In our case, we don't have losses, it's basically a high interest savings account.

What I have set up:
03-1851-000 Investment (currently existing in both funds 01 and 02)
03-1852-000 Interest Gained (New)
03-3121-000 Investment Fund Balance (New)
03-3126-000 Capitalized Interest (currently existing in fund 01)

I will move Investment amounts from funds 01 and 02 to 03, and capitalized interest amount from 01 to 03.

It depends if the amount is over or under. In either case you'd be adjusting the balance of the investment.

Is the balance (true value?) of the investment supposed to be shown on the Asset side, or the Net Assets side?

So if I need to adjust the investment up, I would do:
03-1851-000 DB 1000.00
03-3121-000 CR 1000.00

And when I get a statement I would do the following:
03-1852-000 DB 1000.00
03-3126-000 CR 1000.00

Partially correct .. if you add funds directly to the investment you would use the 1851/3121 transaction, and if you had interest or the value went up according to the broker statement, you would STILL use the 3121 net asset/fund balance as that will reflect the entire value, no need for two fund balances there, I'd make the 3125 inactive.

There's another thread I found that mentions moving gains (interest) into unrestricted net assets at the end of the year: viewtopic.php?f=3&t=13468&p=45069&hilit ... ent#p45069
So would that be moving from 03-3126 to 03-3121?

Am I still missing something?

Yes ... as I pointed out you're not updating the fund balance 3121 which should always reflect the total of the 1851 and 1852 accounts. At the end of the year you would move the total in 1852 and add it to the amount in 1851. So at the end of the year if 1851 had 2000, you would CR 1852 and DB 1851 for $2000.

[neac]

Ah, I'm starting to understand.

I also need to set up the Transfer accounts since we've never used them.

Can I set the "Transfer from" in the 03 fund to close to the investment fund balance (I hope this is correct?)

[NeilZ]

Ah, I'm starting to understand.

I also need to set up the Transfer accounts since we've never used them.

Can I set the "Transfer from" in the 03 fund to close to the investment fund balance (I hope this is correct?)

If I remember right, transfer accounts should ALWAYS default to the net assets account in each Accounting Fund.

Normally if used transferring cash, it would be 3110-000. I you're going to be using this to transfer cash to operating, or vice versa, in which case you should always transfer from cash to cash, then from cash to the investment. This provides a direct audit trail.

You can create a cash asset in the investment Fund Account to 'hold' the cash during the transfer, then move it from cash to add to the investment. That would automatically update the net asset/fund balance accounts.

So if you transferred from checking in 01 to the 'cash account' in 03 it would look like this:

01-1110-000 Checking Account CR 750.00
01-9100-000 Transfer to Other Funds DB 750.00
03-1210-000 Cash Account DB 750.00
03-9200-000 Transfer from Other Funds CR 750.00

You'd then create a transaction to increase the investment:

03-1210-000 Cash Account CR 750.00
03-1851-000 Investment DB 750.00

The system then updates the proper net assets account.

As usual, I advise that the first time you do this, you do a backup so you can restore to previous in case it does not come out correctly.

[neac]

So, I don't know what to do now.

What I'm looking at having in the 03 Fund is the following, not including transfer accounts:
Assets: 1851-000 Investment amount
1852-000 Interest gained

Equity(Fund balance): 3126-000 Investment fund balance (just changing the name of the current FB)

If I understand correctly 1851+1852=3126.

The problem is how this was all set up at the beginning. 1851 has the investment's value from 8 years ago, only ever updated when funds were withdrawn. 3126 is only the capitalized interest on the investment as of 8 years ago and never been updated.

[NeilZ]

So, I don't know what to do now.

What I'm looking at having in the 03 Fund is the following, not including transfer accounts:
Assets: 1851-000 Investment amount
1852-000 Interest gained

Equity(Fund balance): 3126-000 Investment fund balance (just changing the name of the current FB)

If I understand correctly 1851+1852=3126.

The problem is how this was all set up at the beginning. 1851 has the investment's value from 8 years ago, only ever updated when funds were withdrawn. 3126 is only the capitalized interest on the investment as of 8 years ago and never been updated.

Well .. first off, you should update the current balance in the 1851 account AS OF Dec 31, 2020, then adjust the 1852 account when you get the quarterly statements.

You still need a cash account to be able to move funds in and out of that Accounting Fund. What you're basically doing is moving funds out of a 'restricted' fund balance (3126) to the unrestricted fund balance (3110) so you can then transfer that to another Accounting Fund.

I would assume that when you put funds in, it will be coming out of the checking (1110), and accordingly funds coming out will be going into the checking account. If that is the case, I'd add the checking account 1110-000 to the 03 Accounting Fund and use it as the 'cash account' I mentioned in my previous answer.

So that the transaction to add funds to the investment would then be

03-1110-000 Checking Account CR 750.00
03-1851-000 Investment DB 750.00

and the transfer of the funds to the investment Accounting Fund would be:

01-1110-000 Checking Account CR 750.00
01-9100-000 Transfer to Other Funds DB 750.00
03-1110-000 Cash Account DB 750.00
03-9200-000 Transfer from Other Funds CR 750.00

I'm assuming that the transfers are all EFT.

[neac]

how do I adjust 1852 account?

[NeilZ]

how do I adjust 1852 account?

You had it listed previously ...

Code: Select all

And when I get a statement I would do the following:
03-1852-000 DB 1000.00
03-3126-000 CR 1000.00

This is assuming that the adjustments are gains, if its a loss for the quarter, you would reverse CR 1852-000 and DB 3126-000

[neac]

so I did, lol
Thanks for all the help. Got it all sorted out now