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.