Reinvestment leaving you with a negative cash balance?

Reinvest transaction for managed funds leaves negative cash balance in account 

If you have an Investment Account set up as a Single Managed Fund type, there is no Cash
Balance account, so when a Reinvest Income transaction is processed, details appear correctly: 

 

If you enter a Trust Fund in a Brokerage account where there is a Cash Balance, when you enter a Re-invest Income transaction, the income amount is not recognised and when the shares are purchased, the cost is deducted from the Cash Balance of this Brokerage account, resulting in a balance that is less by the amount of the fund income.

 

 

What to do now?

You can restore the Cash Balance by:

1. Setup Liability Account in Property & Debt
2. Enter transaction – Include amount against Brokerage account.
   

1. Will restore the cash account.
   
2. In some reports may need to omit the Liability Account to produce a correct report
   
3. Eg Reports > Net Worth & Balance > Net Worth
   
4. Exclude this account by Customise > Accounts > untick the Liability Account. 
   

 

Still left with one problem – Holdings Screen

 

The Cost Basis header total shows incorrectly – it appears to double up on the amount of the reinvestment.  That is, it accepts the income, but does not use it to fund the new purchase which is also listed. 

Totals in Australian dollar is also wrong.

So you need to total the entries of each transaction to arrive at the correct total. 

 When this transaction is done on a single Managed Fund type, the Cash component appears as a negative, but the Totals in Australian Dollar does appear correctly. 

 

regards,

John