Accounts Table

To manage investments in Banana Investment Accounting, the Accounts Table must include both the standard financial accounting accounts and additional accounts dedicated to investment management.

Each investment is represented by an Item linked to an Investment Balance Sheet Account. Investment transactions update both the Item quantities and the related accounts, ensuring that the investment position, the book value, and the financial statements remain synchronized.

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, losses, and valuation adjustments
• Investment Profit & Loss Accounts – record investment income and expenses such as dividends, interest, commissions, and fees.

Together these accounts record investment positions, maintain the book value of each investment, and ensure that every investment transaction is correctly reflected 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. They summarize the value of all securities linked to the account.

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

The balance of an Investment Balance Sheet Account always equals the total book value of all Items linked to that account.

When to Create 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 securities.
• 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 liability account to record withholding tax.
• Key Characteristics:
  • Every Item must be linked to one Investment Balance Sheet Account.
  • The currency of the Investment Balance Sheet Account must match the currency of the Item ID.
  • In transactions, the Investment Balance Sheet Account is always used together with an Item ID.
• Types of Balance Accounts:
  • Most Investment Balance Sheet Accounts are asset accounts. Depending on the accounting structure, liability accounts (for example, withholding tax accounts) may also be used for specific investment transactions.
• Account Configuration:
  • Account: Account name.
  • Description: Account Description.
  • BClass: 1 or 2.
  • Sum In: Name of the group.
  • Currency (just for multi-currency accounting): Currency of the Account.
  • Opening (Also Opening Currency for multi-currency accounting): The initial 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 accounting using the command: Actions > Check Accounting. By selecting the options “Items” and “Asset accounts opening balances,” the program will check the opening balances and display any inconsistencies.

Investment Value Adjustment Accounts

Unlike Investment Balance Sheet Accounts, Investment Value Adjustment Accounts do not store the value of investments. Instead, they record the accounting adjustments that increase or decrease the book value of an investment.

They are used whenever the book value changes because of:

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

Investment Value Adjustment Accounts are always used together with:

• an Investment Balance Sheet Account
• an Item ID.

Realized Gains and Losses 

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

• Realized Gain on Investments: When the selling price exceeds the book value, the gain is calculated as: 
  (Selling Price−Book Price)×Quantity Sold
• Realized Loss on Investments: When the selling price is below the book value, the loss is calculated similarly.
• Realized Exchange Rate Gain: When the base currency value of the investment increases due to exchange rate changes during the sale.
• Realized Exchange Rate Loss: When the base currency value decreases due to exchange rate changes during the sale.

Unrealized Gains and Losses 

These accounts are used when investments are revalued without being sold, typically at the end of the accounting period.

• Unrealized Gain on Investments: The difference between the book value and the market value when the market value is higher.
• Unrealized Loss on Investments: The difference when the market value is lower than the book value.
• Unrealized Exchange Rate Gain: Adjustments in the base currency due to exchange rate fluctuations at year-end.
• Unrealized Exchange Rate Loss: Adjustments in the base currency due to exchange rate fluctuations at year-end.

Other Value Adjustments:

• Depreciation: Tracks the decrease in value for assets over time.
• Capitalized Costs: Expenses related to investments.
• Income Adjustments: Earnings unrelated to direct transactions (e.g., rebates or adjustments).
• Rounding Differences: Adjustments for rounding errors in calculations.

Investment Profit & Loss Accounts 

These accounts record income and expenses associated with investments, such as dividends, interest, commissions, and fees. They are not directly linked to an Investment Balance Sheet Account but are normally associated with an Item ID in investment transactions.

• Common Profit & Loss Accounts:
  • Interest Earned: Income from interest-bearing investments.
  • Interest Paid: Expenses from borrowing or margin accounts.
  • Dividend Income: Earnings from stock dividends.
  • Commissions Cost: Fees paid for investment transactions.
  • Charges: Miscellaneous charges related to investments.
  • Other Income: Any other investment-related income.
  • Other Costs: Any additional costs incurred.

These accounts measure the financial performance of 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 that investment positions, book values, and financial statements remain continuously synchronized.