Accounts Table

To manage investments with Banana Investment Accounting, the Accounts table includes both standard financial accounting accounts and specific accounts used for investment accounting.

Each investment is represented by an Item linked to an Investment Balance Sheet Account. Investment transactions combine investment-specific information, such as the Item ID, quantity, and price, with the corresponding accounting entries, keeping investment data and financial accounting directly connected.

Investment accounts are organized into three categories:

• Investment Balance Sheet Accounts – represent the book value of investments
• Investment Value Adjustment Accounts – record realized and unrealized gains and losses and other adjustments affecting investment book values
• Investment Profit & Loss Accounts – record investment income and expenses such as dividends, interest, commissions, and fees.

Together, these accounts provide the accounting structure required to record investment transactions, maintain the book value of each investment, and reflect investment activity in the Balance Sheet and Profit & Loss Statement.

Investment Balance Sheet Accounts 

Investment Balance Sheet Accounts represent the book value of investments reported in the Balance Sheet. Each account summarizes the book value of all investments linked to it.

Each investment (Item) is associated with one Investment Balance Sheet Account where purchases, sales, and other transactions affecting its book value are recorded.

The balance of each Investment Balance Sheet Account must equal the total book value of all Items linked to that account.

When to Create Investment Balance Sheet Accounts

The number of Investment Balance Sheet Accounts depends on the organization of the portfolio. Common configurations include:

• You need at least one Investment Balance Sheet Account to record the purchase and sale of investments.
• If you manage different types of securities, such as shares, bonds, or investment funds, it is recommended to create a separate account for each category.
• If you are using multi-currency accounting, you need at least one Investment Balance Sheet Account for each currency.
• If you manage bonds, it is recommended to create a separate liability account to record withholding tax.
• Key Characteristics:
  • Every Item must be linked to one Investment Balance Sheet Account.
  • The currency of the Item must match the currency of its Investment Balance Sheet Account.
  • In investment transactions affecting quantity or book value, the Investment Balance Sheet Account is used together with the corresponding Item ID.
• Types of Balance Accounts:
  • Investment Balance Sheet Accounts are normally asset accounts because they represent the book value of investments. Other Balance Sheet accounts, including liability accounts where required, may also be used for specific investment-related transactions.
• Account Configuration:
  • Account: Account name.
  • Description: Account description.
  • BClass: 1 for Asset accounts or 2 for liability accounts.
  • Sum In: Name of the group.
  • Currency (multi-currency accounting only): Account currency.
  • Opening (and Opening Currency for multi-currency accounting): The opening balance of the account.
    • The opening balance must match the sum of the opening values of all securities (items) linked to the account in the Items table. See also Opening and closing page for more information.
    • You can verify the opening balances using Actions > Check Accounting. Select “Items” and “Asset accounts opening balances” to check for inconsistencies.

Investment Value Adjustment Accounts

Unlike Investment Balance Sheet Accounts, Investment Value Adjustment Accounts do not represent the Book Value of investments. Instead, they record gains, losses, and other accounting adjustments that increase or decrease the Book Value of an investment.

They are used to record gains, losses, and other adjustments resulting from:

• the sale of an investment
• a market value revaluation
• an exchange rate fluctuation
• other accounting adjustments.

Investment Value Adjustment Accounts are used in investment adjustment transactions together with:

• the Investment Balance Sheet Account 
• the corresponding Item ID.

Realized Gains and Losses 

These accounts are used when an investment is sold and a gain or loss is realized.

• Realized Gain on Investments: Records a gain when the Selling Price is higher than the Book Price. The gain is calculated as:
  (Selling Price−Book Price) × Quantity Sold
• Realized Loss on Investments: Records a loss when the Selling Price is lower than the Book Price. The loss is calculated as:
  (Book Price − Selling Price) × Quantity Sold
• Realized Exchange Rate Gain: Records a gain when the base currency value of the investment increases due to exchange rate differences upon sale.
• Realized Exchange Rate Loss: Records a loss when the base currency value of the investment decreases due to exchange rate differences upon sale.

Unrealized Gains and Losses 

Unrealized gain and loss accounts are used to record changes in the value of an investment while the investment is still held.

• Unrealized Gain on Investments: Records an increase in value when the market value is higher than the Book Value.
• Unrealized Loss on Investments: Records a decrease in value when the market value is lower than the Book Value.
• Unrealized Exchange Rate Gain: Records an increase in the base currency value resulting from exchange rate fluctuations.
• Unrealized Exchange Rate Loss: Records a decrease in the base currency value resulting from exchange rate fluctuations.

Other Value Adjustments:

Other adjustment accounts may be used to record specific changes to the Book Value of an investment that are not directly related to realized or unrealized gains and losses.

• Depreciation: Records decreases in the Book Value of assets resulting from depreciation or similar value adjustments.
• Capitalized Costs: Records costs that are capitalized and therefore increase the Book Value of an investment.
• Income Adjustments: Records investment-related income adjustments that affect the Book Value, where applicable.
• Rounding Differences: Records small adjustments required to correct differences resulting from rounding.

Investment Profit & Loss Accounts 

These accounts record income and expenses associated with investments, such as dividends, interest, commissions, and fees.

Unlike Investment Balance Sheet Accounts and Investment Value Adjustment Accounts, these accounts do not represent or adjust the Book Value of an investment. They may be associated with the corresponding Item ID to track income and expenses related to individual investments.

• Common Profit & Loss Accounts:
  • Interest Earned: Records interest income earned from investments.
  • Interest Paid: Records interest expenses related to investments, borrowing, or margin accounts.
  • Dividend Income: Records dividend income received from investments.
  • Commission Costs: Records commissions and transaction fees recognized as expenses.
  • Charges: Records other charges related to investments.
  • Other Income: Records other investment-related income.
  • Other Costs: Records other investment-related expenses.

These accounts record income and expenses related to investments but do not affect their Book Value.

Relationship Between Investment Accounts

Together with the linked Items and investment transactions, these account categories form the core of the Banana Investment Accounting model, ensuring consistency between investment positions, Book Values, and financial accounting.