Adjusting the position on an investment holding can be required when creating an account and either not having access to all of the past transaction history, or not wanting to enter it manually, and in certain situations like moving accounts or when there's an unexplained missing transaction history you can't resolve. Position adjustments are for updating the number of units (shares) and cost basis of a investment holding. If the price per unit for the position is incorrect, instead of or in addition to the number of units being incorrect for a position, you can update the security's prices.
The most difficult part of adjusting the position of an investment holding is determining the exact adjustment that needs to be made. Position adjustments fall under two types: starting balance position adjustments and position adjustments for existing positions. Additional setup of starting balance position adjustments is required if they were generated when creating an account by account download or from importing a QFX or OFX file in order to set their proper cost basis. Refer to the information and examples below for how to record starting balance position adjustments, how to update starting balance position adjustments for cost basis, and how to adjust existing positions.
Starting balance position adjustments:
When you first setup an account you will need to record position adjustments for each holding as of the date you want to begin tracking the account. If the account was created by account download or when importing a QFX or OFX file the program will generate the needed position based on the information in the download or imported file, but you will need to update starting balance position adjustments for cost basis, If you created the account from scratch then you can use the example below for how to record a starting balance position adjustment transaction.
Example:
Your holding of ABC Inc. stock, ticker symbol "ABC", is 100 shares with a cost basis of 5,000.00 as of the starting balance on 1/1/2010.
Steps:
- Create a new transaction in the appropriate account with the date you want to start tracking the account.
- Set "Shares In" for the transaction type.
- Select "ABC - ABC Inc." for the security if it exists. Otherwise enter "ABC Inc." and create the security when prompted.
- Set 100 for the units.
- Set 50.00 for the price per share (the cost basis per share).
- Set the other details for the transaction, such as adding a memo about why the adjustment was made, as desired.
- The amount should be automatically calculated to be -5,000.00. If not, enter 5,000.00 in the "Decrease" amount field or enter -5,000.00 with the minus sign in the "Amount" field as this is the cost basis of the shares. This will not affect the account's cash balance, only the cost basis of the holding.
- Save the transaction.
Note:
The set transaction amount for "Shares In" and "Shares Out" transactions do not affect the account's cash balance unless there is a commission involved in moving the shares.
However, the set transaction amount is used for tracking the cost basis of the holding.
Update starting balance position adjustments for cost basis:
When creating accounts by account download or when importing a QFX or OFX file the program will generate the needed position based on the information in the download or imported file. The program does this by checking for any difference between the units listed for positions and the units from the transactions listed in the download or imported file. If there's a difference the program generates a "Position Adjustment" transaction for the difference in units. However, since there is not cost basis information included for the position information found in account downloads, or in QFX or OFX files, the cost basis information needs to be set by the user. That requires determining the total cost basis for the units represented by the starting balance position adjustment transaction. Then dividing the total cost basis amount by the number of units to get the cost basis per unit. The cost basis per unit should then be set as the "Price" per unit for the starting balance position adjustment transaction. Below are two examples for how to update starting balance position adjustments: when cost basis is known for the starting balance adjustment transaction and when cost basis is only known as of the current position.
Example:
Your holding of ABC Inc. stock, ticker symbol "ABC", is 100 shares with a cost basis of 5,000.00 as of the starting balance on 1/1/2010. The starting balance adjustment transaction shows the units as 100 shares correctly, but has 0.00 for the "Price" per unit. Based on this information you determine you need to adjust your starting balance adjustment transaction for ABC Inc. stock to have a price per unit of 50.00 (the cost basis per share).
Steps:
- Begin to edit the starting balance adjustment transaction for ABC Inc. stock.
- Set 50.00 for the price per share (the cost basis per share).
- The amount should be automatically calculated to be -5,000.00. If not, enter 5,000.00 in the "Decrease" amount field or enter -5,000.00 with the minus sign in the "Amount" field as this is the cost basis of the shares. This will not affect the account's cash balance, only the cost basis of the holding.
- Save the transaction.
Note:
The set transaction amount for "Shares In" and "Shares Out" transactions do not affect the account's cash balance unless there is a commission involved in moving the shares.
However, the set transaction amount is used for tracking the cost basis of the holding.
Example:
Your holding of ABC Inc. stock, ticker symbol "ABC", is 100 shares with a cost basis of 5,000.00 as of the current date. The starting balance adjustment transaction shows the units as 75 shares and has 0.00 for the "Price" per unit. Checking an Investment Values report for this account as of the current date lists the ABC Inc. stock holding with 100 shares correctly, but the cost basis is only 1,250.00. Based on this information you determine you need to adjust your starting balance adjustment transaction for ABC Inc. stock to account for the other 3,750.00 in cost basis which would require setting the price per unit to 50.00 (the cost basis per share).
Steps:
- Begin to edit the starting balance adjustment transaction for ABC Inc. stock.
- Set 50.00 for the price per share (the cost basis per share).
- The amount should be automatically calculated to be -3,750.00. If not, enter 3,750.00 in the "Decrease" amount field or enter -3,750.00 with the minus sign in the "Amount" field as this is the cost basis of the shares. This will not affect the account's cash balance, only the cost basis of the holding.
- Save the transaction.
Note:
The set transaction amount for "Shares In" and "Shares Out" transactions do not affect the account's cash balance unless there is a commission involved in moving the shares.
However, the set transaction amount is used for tracking the cost basis of the holding.
Existing position adjustments:
First, determine if a position adjustment is what is needed to correct the issue. You can check the Portfolio - Holdings section or use an Investment Values report on the account with the discrepancy to check the number of units and unit price listed in the program on the date in question. If the price per unit is incorrect for the position, instead of or in addition to the number of units being incorrect for a position, you can update the security's prices. If the number of units is incorrect for the date in question then you will need to record a position adjustment for the discrepancy in the number of units.
If there is a discrepancy in the number of units listed in the program on a particular date the best option is to attempt to identify the actual transaction(s) that are missing from the account that account for the discrepancy. If the missing transactions cannot be resolved, you can record a position adjustment using the difference in the listed number of units and cost basis on a specific date. Use the two examples below to record a position adjustment transaction: when the number of shares are less than actually held and when the number of shares are more than actually held.
Example:
Your holding of ABC Inc. stock, ticker symbol "ABC", is 100 shares with a cost basis of 5,000.00 as of the current date. Checking an Investment Values report for this account as of the current date lists the ABC Inc. stock holding incorrectly with 75 shares and a cost basis of 3,750.00. Based on this information, and after being unable to determine what the missing ABC Inc. stock transaction(s) are, you determine you need to adjust your position on ABC Inc. stock to account for the 25 missing shares and 1,250.00 missing in cost basis.
Steps:
- Create a new transaction in the appropriate account with the date of when you want the adjustment to occur.
- Set "Shares In" for the transaction type.
- Select "ABC - ABC Inc." for the security.
- Set 25 for the units.
- Set 50.00 for the price per share (the cost basis per share).
- Set the other details for the transaction, such as adding a memo about why the adjustment was made, as desired.
- The amount should be automatically calculated to be -1,250.00. If not, enter 1,250.00 in the "Decrease" amount field or enter -1,250.00 with the minus sign in the "Amount" field as this is the cost basis of the shares. This will not affect the account's cash balance, only the cost basis of the holding.
- Save the transaction.
Steps:
Note:
The set transaction amount for "Shares In" and "Shares Out" transactions do not affect the account's cash balance unless there is a commission involved in moving the shares.
However, the set transaction amount is used for tracking the cost basis of the holding.
Example:
Your holding of ABC Inc. stock, ticker symbol "ABC", is 100 shares with a cost basis of 5,000.00 as of the current date. Checking an Investment Values report for this account as of the current date lists the ABC Inc. stock holding incorrectly with 125 shares and a cost basis of 5,250.00. Based on this information, and after being unable to determine what the missing ABC Inc. stock transaction(s) are, you determine you need to adjust your position on ABC Inc. stock to remove the 25 extra shares and 1,250.00 extra in cost basis.
Steps:
- Create a new transaction in the appropriate account with the date of when you want the adjustment to occur.
- Set "Shares Out" for the transaction type.
- Select "ABC - ABC Inc." for the security.
- Set 25 for the units.
- Set 50.00 for the price per share (the cost basis per share).
- Set the other details for the transaction, such as adding a memo about why the adjustment was made, as desired.
- The amount should be automatically calculated to be -1,250.00. If not, enter 1,250.00 in the "Increase" amount field or enter 1,250.00 in the "Amount" field as this is the cost basis of the shares. This will not affect the account's cash balance, only the cost basis of the holding.
- Save the transaction.
Steps:
Note:
The set transaction amount for "Shares In" and "Shares Out" transactions do not affect the account's cash balance unless there is a commission involved in moving the shares.
However, the set transaction amount is used for tracking the cost basis of the holding.