Investment Accounting Software

An investment accounting software is a specialized system that records, values, and reports financial investments such as stocks, bonds, and funds. It automates key tasks like trade booking, interest and dividend accruals, daily valuation, FX adjustments, and the calculation of realized and unrealized gains.

Unlike a standard accounting tool, it is designed for assets that change value frequently and follow complex accounting rules. It produces accurate Balance Sheet and P&L figures for investments, supports multiple accounting bases (e.g., IFRS, GAAP, tax), and often includes reconciliation and reporting tools.

Elements

Investment accounting software are sophisticated solution that are usually based on a general accounting software / ERP (Enterprise Resource Planning System) . They are formed by different elements.

• General ledger
  • Double-entry accounting engine (Accounting Book of Record, ABOR) – Books all investment-related debits/credits.
  • Multi-basis accounting – Supports IFRS, US GAAP, statutory, tax books simultaneously.
  • Chart of accounts & financial statements – Provides Balance Sheet and P&L outputs.
  • Trade & transaction capture – Records buys, sells, income events, fees, and settlements.
  • Cash & liquidity management – Tracks cash movements, forecasts, and balances.
• Investment accounting
  • Investment Book of Record (IBOR) – Tracks real-time quantities, cash, and exposures.
  • Security master & reference data – Centralized instrument definitions (ISIN, coupons, ratings).
  • Market data & pricing engine – Imports or calculates prices, FX rates, yields, and curves.
  • Valuation & revaluation logic – Computes fair value, amortized cost, unrealized P&L.
  • Performance measurement – Calculates returns, benchmarks, contributions (optional).
  • Risk & exposure analytics – Supplies duration, FX, sensitivity, VaR metrics (optional).
  • Regulatory & compliance reporting – Supports filings (e.g., Solvency II, NAIC, UCITS).
  • Reconciliation tools – Matches cash, positions, and transactions with custodians/brokers.
  • Client & portfolio reporting – Generates statements, holdings reports, and dashboards.

Accounting and Investment Book of Record 

• Accounting Book of Record (ABOR)
  Is a double entry accounting journal that records financial transactions.
• Investment Book of Record (IBOR)
  • Is a journal similar to an inventory system that records the quantities and prices of securities bought and sold.
  • It may be a separate database or a subledger of the ABOR system.

Investment data (IBOR) is typically integrated into the general accounting module (ABOR) through a procedure that creates double entry transactions at a specified time period, usually daily.

Single Book of Record

Banana Accounting uses a single ABOR journal that also allows the integration of information required for investment accounting.

• Double entry transactions include the information necessary for investment accounting, such as Investment Id, quantity, price and other details.

• The Asset account serves as a connection between the Investment Account part and the General Account part. In the Accounting table you define the Investment account that will record the investments.

  • In the Items table, for each investment you specify in the Asset Account column one of the Investment accounts you have defined in the Accounts table.

  • When entering transactions that change the quantity and value of an investment, you must use the account you have defined in the Items table for that investment. The opening balance of the Investment account must match the sum of all opening values of all investments with the same Asset Account.

    • The current balance of the Investment account must match the sum of all current values of all investments with the same Asset Account.

    • Banana Accounting ha use instead a single ABOR Journal that also allow to integrate information necessary to the investment accounting.  

Simplicity Through Innovation

It is quite challenging to create an integrated investment management solution within accounting that is also relatively easy to use. Banana Accounting is one of the most innovative software programs and, for example, it was the first software in the world to introduce a blockchain system in 2002 to certify accounting data. Following this tradition, it has introduced several innovations that are unique in the accounting field, including some that are especially useful for investment accounting.

• It includes a small inventory management system that allows you to enter items, quantities and unit prices directly in the transaction and automatically calculates the transaction amount. This is the basis for managing investment movements as well.
• You can use a unique feature of Banana Accounting to enter a neutral number, values that are shown with a plus or minus sign, for example ±123.00. Users enter +-123 and the program transforms it into ±123. When you need to record value adjustments, gains or losses, you enter a neutral value in the quantity. This value is used to calculate the accounting amount but is not considered an inventory movement. Thanks to this innovation you can easily manage different complex cases.

Keeping track of the book value

Banana Investment Accounting solves one of the most complex problems related to managing an investment portfolio, that is tracking all operations specific to securities so you can clearly see how the book value of the investments is calculated. Portfolio management solutions usually track purchase and sale values, show the market value and provide performance data, but they do not manage the book value. For tax purposes instead the key value is the book value, which is adjusted at year end based on the market price. The increase or decrease in book value determines the company profit or loss, and it affects performance indicators and the taxes due on profit and on assets.

When managing securities you need to keep a list of all securities with their quantities and prices. When you buy securities you must record quantities and prices, eventually keeping expenses and fees separate. When you sell investments you are required to calculate and record the realized book gain or loss, as well as the realized exchange gain or loss. At the end of the year you must update the value of the securities and calculate the unrealized gains and losses on the securities and on the exchange rates.

Most accounting solutions, and particularly small business accounting solutions, do not allow you to manage quantities and purchase and sale prices of securities, so you are forced to handle these elements separately in Excel tables, entering the data several times and creating complex formulas that take into account value and exchange differences, with a high risk of error.The features needed to manage securities for companies that must prepare professional Balance Sheet and Profit and Loss statements are usually available only in specialized portfolio management solutions, which are very costly and difficult to use. 
Banana Investment Accounting is one of the few software solutions that allow you to keep track of prices, quantities, expenses, commissions and other elements, so the program can automatically calculate gains and losses on securities and on exchange rates, both realized and unrealized. Banana Investment Accounting uses the Moving Average Cost method, which complies with international valuation standards (see Theoretical Investment Accounting Introduction). Banana Investment Accounting prepares both the Balance Sheet and the Profit and Loss statements, and at the same time provides securities reports, making accounting and investment management much easier.