Create adjustment transactions

This command automatically creates adjustment transactions to align the book value of investments with their current market value and, for investments denominated in foreign currencies, with current exchange rates.

Specifically, it:

• Updates investment book values to reflect current market prices and exchange rates.
• Records unrealized gains and losses in the corresponding Profit & Loss accounts.
• Generates the necessary double-entry transactions to adjust investment values.

Once the generated transactions are recorded, the Balance Sheet and Profit & Loss statement reflect the updated investment values and the corresponding unrealized gains and losses.

Adjustment transactions can be created at any time during the year to obtain an up-to-date Balance Sheet and Profit & Loss statement.

The command must be executed no later than the end of the accounting year, before preparing the year-end financial statements and opening the new accounting year. For more information see also Investment Accounting Opening and Closing the Year.

Update Market Prices and Exchange Rates

Update Investment Prices

In the Items table, enter the current market price for each investment in the Price Current column.

You can:

• Enter the current prices manually, including only for the investments for which you want to create adjustment transactions.
• Use the Update Market Prices command to import and update current prices for multiple investments.

Set Current Exchange Rates

For investments denominated in a foreign currency, the current value in base currency is automatically calculated using the current exchange rate defined for the corresponding currency in the Exchange rates table.

The current exchange rate is the exchange rate entered without a specific date. For more information, see Items Table with Investments List.

Command: Create adjustment transactions 

Adjustment Transactions Dialog

When you run the Create adjustment transactions command, a dialog asks you to enter the date to be used for the adjustment transactions. By default, the current date is suggested.

All adjustment transactions created by the command are recorded with the specified date.

Commit Changes Dialog

Before the adjustment transactions are recorded, the Commit changes dialog displays a preview of all the transactions that will be created, allowing you to review them before confirming the changes.

Adjustment Transactions

Adjustment transactions are generated and grouped by investment. If both a market price adjustment and an exchange rate adjustment are required for the same investment, the corresponding transactions are kept together.

Adjustment transactions are recorded using the Asset Account defined for the investment in the Items table, increasing or decreasing its book value. The offsetting entry is recorded in the corresponding gain or loss account.

If the following accounts are defined in the Accounts Settings dialog, the program uses them to record the adjustments:

• Unrealized Gain / Unrealized Loss for market price adjustments.
• Unrealized Exchange Rate Gain / Unrealized Exchange Rate Loss for exchange rate adjustments.

If the required accounts are not defined in the Accounts Settings dialog, the program inserts descriptive placeholder accounts in the generated transactions.

Once the adjustment transactions have been recorded, verify that the balances of the Asset Accounts match the current values of the corresponding investments in the Items table. For more information, see Create Adjustment Transactions.

In the following cases, no adjustment transactions are created:

• The book value already corresponds to the current market value and, for investments denominated in a foreign currency, the book exchange rate corresponds to the current exchange rate.
• The investment has a current quantity of zero.
• No current market price is defined for the investment.

Error Messages

• Items table not found: The Items table is not present in the accounting file.
  • Add the Items table to your file.
• No Asset found in the Items table: The Items table does not contain any valid Assets.
  • Add Assets to the Items table.
  • A valid Asset must have an ID and an Asset Account.
• No Asset with current price found in the Items table: No Asset with a valid current price was found in the Items table.
• The carrying amounts are already aligned with the current market prices. No unrealized gains or losses have been generated: The book values of the investments are already aligned with their current market values and, where applicable, current exchange rates. No adjustment transactions are required.