Share purchases and sales are recorded as compound transactions, with separate rows for the different accounting components of the operation. This structure makes it possible to record the investment movement, bank payment or receipt, transaction costs, and any realized gains or losses while keeping the book value of the investment up to date.

The Item identifies the share involved in the transaction. Enter the same Item on all rows related to the investment so that Banana Investment Accounting can associate the accounting entries with the corresponding investment.

Purchase of shares

A share purchase is generally recorded using separate rows for the investment purchase, transaction costs, and payment.

1. Purchase of shares
   • In the Debit Account column, enter the Investment Balance Sheet Account assigned to the Item in the Items table.
   • Enter the number of shares purchased in the Quantity column.
   • Enter the purchase price per share in the Unit Price column.
   • Banana Investment Accounting automatically calculates the corresponding amount.
2. Bank charges
   • Enter the account used to record bank charges or commissions in the Debit Account column.
   • Enter the amount of the charges.
3. Payment of securities and charges
   • Enter the account used to make the payment, normally the bank account, in the Credit Account column.
   • The payment corresponds to the total amount paid for the shares plus bank charges and other costs included in the transaction.

Sale of shares

A share sale generally requires additional rows because, in addition to recording the sale and the amount received, the book value of the investment must be updated and the realized gain or loss must be recorded.

1. Sale of shares
   • In the Credit Account column, enter the Investment Balance Sheet Account assigned to the Item in the Items table.
   • Enter the number of shares sold as a negative value in the Quantity column.
   • Enter the selling price per share in the Unit Price column.
   • Banana Investment Accounting automatically calculates the corresponding sale amount before bank charges.
2. Bank charges
   • Enter the account used to record bank charges or commissions in the Debit Account column.
   • Enter the amount charged by the bank.
   • The sale amount less bank charges corresponds to the net amount received, unless other transaction components are present.
3. Net amount received
   • In the Debit Account column, enter the bank account receiving the sale proceeds.
   • Enter the net amount credited by the bank after deducting bank charges and any other amounts included in the transaction.
   • In multi-currency accounting, use a bank account with the same currency as the investment.
4. Realized Gain or Loss on Investment
   • The realized gain or loss on sale results from the difference between the sale value and the book value of the shares sold.
   • Use the Calculate Sale Data extension to automatically calculate the realized gain or loss based on the historical investment data.
   • On the same row, the extension records the sale quantity as a neutral number. This allows Banana Investment Accounting to calculate the realized gain or loss per unit.
   • Record a realized gain using the appropriate realized investment gain account, or a realized loss using the appropriate realized investment loss account. Use the Investment Balance Sheet Account assigned to the Item as the corresponding account.
5. Realized Exchange Rate Gain or Loss (multi-currency accounting only)
   • When an investment is denominated in a foreign currency, its sale may generate a realized exchange rate gain or loss in addition to the realized gain or loss on the investment.
   • The realized exchange rate gain or loss reflects the effect, in the base currency, of the difference between the accounting exchange rate of the investment and the exchange rate applied to the sale.
   • Use the Calculate Sale Data extension to automatically calculate the realized exchange rate gain or loss based on the historical investment data.
   • Record a realized exchange rate gain using the appropriate realized exchange rate gain account, or a realized exchange rate loss using the appropriate realized exchange rate loss account. Use the Investment Balance Sheet Account assigned to the Item as the corresponding account.

Fund units are generally accounted for in the same way as shares when they are purchased or sold. However, funds may involve specific transactions such as:

• subscriptions
• redemptions
• distributions
• reinvested distributions
• accumulation units
• switches or conversions between fund classes
• splits or consolidations.

Each fund is identified by an Item and linked to the Investment Balance Sheet Account assigned to that Item. Transactions affecting the number of units are recorded using the corresponding Item, Quantity, and Unit Price.

For funds, the price per unit is often referred to as the Net Asset Value (NAV). The NAV represents the value of one fund unit and can be used as the Unit Price when recording subscriptions, redemptions, reinvestments, and other transactions involving fund units.

Subscriptions and Redemptions

Subscriptions and redemptions of fund units are recorded in the same way as purchases and sales of shares.

A subscription increases the number of units held and the book value of the investment. Record the additional units as a positive value in the Quantity column and use the Investment Balance Sheet Account assigned to the Item.

A redemption decreases the number of units held. Record the redeemed units as a negative value in the Quantity column. If the redemption value differs from the book value of the units redeemed, the difference is recorded as a realized gain or loss on the investment.

For foreign-currency investments, a redemption may also generate a realized exchange rate gain or loss.

For detailed instructions on purchases and sales, see Booking Share Movements. For the calculation of realized gains or losses, see Calculate Sale Data.

Distribution / Income Units

Income or distribution units periodically distribute income to the investor without changing the number of fund units held.

Record the amount received as investment income and the corresponding increase in the bank account.

If taxes, withholding taxes, commissions, or other charges are deducted from the distribution, record them on separate rows using the appropriate accounts.

Accumulation Units

Accumulation units do not normally distribute income in cash. Instead, the income generated by the fund is retained within the fund and reflected in the value of the units.

Because no additional units are normally issued and no cash is received, the quantity held does not normally change.

If the accumulated income must be recognized separately for accounting, tax, or reporting purposes, record the required adjustment according to the applicable accounting and tax treatment.

Reinvestment

When a distribution is reinvested, the distribution income is used to acquire additional fund units instead of being paid out to the investor.

Record the investment income and the acquisition of the additional units as separate accounting components of the transaction. The acquisition increases both the Quantity and the book value of the investment, even when there is no net movement on the bank account.

The quantity of additional units is calculated as:

Reinvested amount / Unit Price (NAV) = Additional units

For example, if USD 100 is reinvested at a NAV of USD 50 per unit, 2 additional units are acquired. If the NAV is USD 37.50, 2.6667 additional units are acquired.

Fund quantities can therefore include decimal units.

Switch / Conversion

A switch or conversion transfers an investment from one fund or fund class to another. The accounting treatment depends on whether the operation is treated as a sale and subsequent purchase or as an internal transfer.

If the switch is treated as a sale and purchase, record the decrease of the old Item and the acquisition of the new Item as separate investment movements. Any applicable realized gain or loss, and for foreign-currency investments any realized exchange rate gain or loss, must also be recorded.

If the switch is treated as an internal transfer, decrease the Quantity of the old Item and increase the Quantity of the new Item. Transfer the corresponding book value from the Investment Balance Sheet Account associated with the old Item to the Investment Balance Sheet Account associated with the new Item. No realized gain or loss is recorded if the transaction does not constitute a realization.

If both Items are assigned to the same Investment Balance Sheet Account, the transfer changes the quantities and book values associated with the Items without changing the overall balance of that account.

For Items denominated in different currencies, the transferred values and any exchange rate differences must be recorded according to the accounting treatment applicable to the conversion.

Split / Consolidation

A split or consolidation changes the number of fund units held without changing the total book value of the investment.

• In a split, the number of units increases and the book value per unit decreases proportionally.
• In a consolidation, the number of units decreases and the book value per unit increases proportionally.

No cash movement and no realized gain or loss are normally recorded.

Bond transactions are recorded using the same general transaction structure as other investments, but bonds introduce specific concepts such as nominal value, accrued interest, coupon interest, and withholding tax.

For bonds, the Quantity represents the nominal value of the bond rather than the number of securities held. The Unit Price represents the bond price applied to the nominal value.

Purchase of Bonds

A bond purchase generally includes separate rows for the bond purchase, bank charges, accrued interest, and payment.

1. Purchase of bonds
   • In the Debit Account column, enter the Investment Balance Sheet Account assigned to the Item in the Items table.
   • In the Quantity column, enter the nominal value of the bond purchased.
   • In the Unit Price column, enter the purchase price of the bond.
   • Banana Investment Accounting automatically calculates the corresponding purchase amount.
2. Bank charges
   • In the Debit Account column, enter the account used to record bank charges or commissions.
   • Enter the amount charged by the bank.
3. Accrued Interest
   • When a bond is purchased between coupon payment dates, the buyer normally pays the seller the interest accrued from the previous coupon date to the purchase date.
   • Record the accrued interest using the appropriate interest income account.
   • In the Description column, you can indicate the accrual period and the applicable interest rate.
4. Payment of Bonds
   • In the Credit Account column, enter the account used to make the payment, normally the bank account.
   • The total payment generally includes the bond purchase amount, accrued interest, bank charges, and any other transaction costs.

Collection of Interest Coupons

At each coupon payment date, record the interest earned on the bond. The gross interest may be divided between the net amount received and any withholding tax deducted.

1. Net Interest
   • In the Debit Account column, enter the bank account receiving the net interest.
   • Enter the amount credited by the bank after deduction of withholding tax and any other applicable deductions.
2. Recoverable Withholding Tax
   • If withholding tax has been deducted and is recoverable, record the recoverable amount using the appropriate Balance Sheet account.
   • In Switzerland, a 35% withholding tax may apply to certain Swiss investment income, including interest subject to Swiss withholding tax.
3. Gross Interest
   • In the Credit Account column, enter the appropriate interest income account.
   • Record the gross amount of interest before withholding tax.

The net interest received plus the recoverable withholding tax corresponds to the gross interest, unless other deductions are present.

Sale of Bonds

A bond sale generally requires separate rows for the sale, bank charges, accrued interest, net amount received, realized gain or loss and, for foreign-currency investments, any realized exchange rate gain or loss.

1. Sale of Bonds
   • In the Credit Account column, enter the Investment Balance Sheet Account assigned to the Item in the Items table.
   • In the Quantity column, enter the nominal value of the bond sold as a negative value.
   • In the Unit Price column, enter the selling price of the bond.
   • Banana Investment Accounting automatically calculates the corresponding sale amount.
2. Bank Charges
   • In the Debit Account column, enter the account used to record bank charges or commissions.
   • Enter the amount charged by the bank.
3. Accrued Interest
   • When a bond is sold between coupon payment dates, the buyer normally pays the seller the interest accrued from the previous coupon date to the sale date.
   • In the Credit Account column, enter the appropriate interest income account.
   • Record the accrued interest received.
4. Net Amount Received
   • In the Debit Account column, enter the bank account receiving the proceeds.
   • Enter the net amount credited by the bank.
   • The net amount received generally reflects the bond sale amount plus accrued interest, less bank charges and any other deductions.
5. Realized Gain or Loss on Investment
   • When a bond is sold, the difference between its sale value and its book value must be recorded as a realized gain or loss.
   • Use the Calculate Sale Data extension to automatically calculate the realized gain or loss based on the historical investment data.
   • On the same row, the extension records the sale Quantity as a neutral number, allowing Banana Investment Accounting to calculate additional information about the realized result.
   • Record a realized gain using the appropriate realized investment gain account, or a realized loss using the appropriate realized investment loss account. Use the Investment Balance Sheet Account assigned to the Item as the corresponding account.
6. Realized Exchange Rate Gain or Loss (multi-currency accounting only)
   • When a bond is denominated in a foreign currency, its sale may generate a realized exchange rate gain or loss in addition to the realized gain or loss on the investment.
   • The realized exchange rate gain or loss reflects the effect, in the base currency, of the difference between the accounting exchange rate of the investment and the exchange rate applied to the sale.
   • Use the Calculate Sale Data extension to automatically calculate the realized exchange rate gain or loss based on the historical investment data.
   • Record a realized exchange rate gain using the appropriate realized exchange rate gain account, or a realized exchange rate loss using the appropriate realized exchange rate loss account. Use the Investment Balance Sheet Account assigned to the Item as the corresponding account.

Nominal Value

The nominal value, also known as the face value, is the amount on which the bond interest is calculated.

In Banana Investment Accounting, the nominal value of a bond is entered in the Quantity column.

Interest

Bond interest is generally determined by the coupon rate, expressed as a percentage of the nominal value. The bondholder receives the interest according to the coupon conditions, typically at regular intervals. Interest is calculated on the nominal value of the bond.

Market price adjustments are generally recorded at the end of the accounting period to adjust the book value of investments that are still held to their current market value.

The adjustment is based on the difference between the book value of the investment and its market value. If the market value is higher than the book value, the difference is recorded as an unrealized gain. If the market value is lower than the book value, the difference is recorded as an unrealized loss.

The adjustment is recorded using the Investment Balance Sheet Account assigned to the Item and the appropriate income or expense account. The investment remains in the portfolio; the adjustment changes its book value but does not change the Quantity held.

You can automatically create the required adjustment transactions using the Create adjustment transactions extension.

Small rounding differences may arise, especially at year-end, because banks, financial institutions, and Banana Investment Accounting may apply different rounding methods to investment prices and values.

When a rounding difference affects the book value of an investment, it can be corrected by entering a manual adjustment transaction.

Record the difference using the appropriate income or expense account and the Investment Balance Sheet Account assigned to the Item as the corresponding account.

This adjustment aligns the accounting records with the required investment value without changing the Quantity held.

When an investment is sold, its book value must be updated and the realized result of the sale must be recorded.

Depending on the investment and its currency, the sale may require the calculation of:

• Realized Gain or Loss on Investment – the realized result arising from the difference between the sale value and the book value of the investment sold.
• Realized Exchange Rate Gain or Loss – for investments denominated in a foreign currency, the realized result arising from the exchange rate difference associated with the sale.

The Calculate Sale Data extension uses the historical investment data to automatically calculate the values required to complete the sale transaction and update the book value of the investment.