What is the best way of accounting for Precious metals transactions?

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I want to know what is the best way to handle Precious Metals in Reckon Personal Plus 2019?
I have started buying physical silver and gold and at the moment I record them as a "Bond" purchase, and have set up "silver" and "gold" as Asset Types. What "Asset Class" do I record them as?

Is this the best way to account for them and will it give me the best outcome in reports?
Any help appreciated. 
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Shane Smith

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Posted 2 years ago

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Albert

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In my opinion you should set separate accounts in Reckon for each and create 2 "currencies" XAU and XAG. Set the exchange rate for each currency as the prevailing spot price (update as frequently as you like). You will buy in troy ozs or grams. Those can be the units in your XAU and XAG accounts

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Shane Smith

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Albert, thank you for the reply. I have separate accounts in AUD and in USD with the gold and silver broker, because they sell in AUD or in USD.
But i am not clear on what you mean by XAU and XAG?

And should I use the "Bonds Bought" in the Enter Transactions window or some other way?
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Kevin Russell, Accredited Partner

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This is NOT the place for accounting advice. Why dont you talk to your tax advisor?
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Albert

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I do not think Shane is asking for accounting advice. He is merely looking for a way to set up a physical metal account within Reckon.

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Albert

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Shane - do you buy the metal in grams or troy ounces?
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Kevin Russell, Accredited Partner

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Al you and I disagree
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Shane Smith

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Albert, you are right, I am looking for the best way to set it up in Reckon so I can see my exposure to all precious metals and track cost basis and prices etc., and see on the Pie graph my relative exposure to it or stocks, or property.

I am just starting to buy physical gold and silver and I buy in troy ounces and the Broker stores it. There are no categories for precious metals or commodities in Reckon and I want to set it up correctly from the beginning so I don't have to go back and make dozens of changes later. I think buying it as a "Bond" in the Transactions box is better than treating it as a Stock, although I stand to be corrected? I would like to set up a new "Asset Class" for Precious metals, but there is no option to do this at present, so i set it as "Other".
I can track prices by adding them manually from time to time, and I will have a separate USD and AUD account with the Broker.
Can you advise anything else that might help?
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Albert

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Shane - I would try:
1. set up a new currency and call it Gold (that is where XAU comes from). Set the exchange rate for "Gold" as the current spot price
2. Set up a new account and call it Gold Holdings
3. Transfer from any currency into Gold Holdings
4. So say you buy 5 grams at A$53.50/gram
5. Total outlay will be A$267.50
6 Transfer the A$267.50 into Gold Holdings and set the amount received as 5 (grams)

I will have some time this weekend and will give it a try myself. I have been using Reckon / Quicken since 1995 and find it can do almost anything if you put your mind to it.

Please let me know


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shane.scott11

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Hi Albert
I have the same question, I want to set up accounts in Reckon to monitor my precious metals holdings.
Can you please explain how you set up a new currency?
Did you manage to set this up and could you please provide detailed sets
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Shane Smith

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Shane, I don't really know about Albert's way, because I had already set it up a different way and it works quite well. Possibly Albert's way would work quite well too, but I will allow him to comment on it. I have saved Albert's way into my Reckon notes in case I want to use it in the future.

But this is the way I have set it up:

1.    Set up a separate Investment account.

2.    Set the currency to USD, AUD or whatever currency you will trade in.

3.    In the “Enter Transactions” box, select “Bonds Bought”

4.    In the ‘Security Name’ select either “Gold_Physical” or “Silver_Physical”.

5.    The “Number of Bonds” = the number of Troy ounces.

6.    “Price” will be per Troy Ounce.

7.    Add “Commission” or Fee.

8.    Set exchange rate on the trade date if you know it.

9.    To ‘Sell’ Precious Metals, select "Sell Shares" and enter the usual fields.

It's a simple way and it has been working well for me for some time now. You will need to update prices manually. Perhaps Albert's way may obviate updating manually, I don't know.
Hope it helps?
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shane.scott11

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fantastic thanks Shane that seems very straightforward. I am also trading Silver and Platinum, did you set up different accounts or just set them up as a different bond in the same account as the gold?
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Shane Smith

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You set them up as different assets and add them in the same brokerage account you buy them in, like I detail above: "Platinum_Physical", or just "Platinum". I called them "Gold_Physical" because I also buy Gold in other forms, like ETF's. 

You need to set up different 'Securities' and call them "Gold Bullion AUD" or whatever, and then in the 'Asset Class' select 'Single' and select 'Other' for Gold, and 'Unclassified' for Silver., in the drop-down box.

If you do this then you will see them show up in the Pie graph on the 'Home' button, to give you a visual idea of how much they make up in your portfolio. But there are no further categories left then for Platinum, so I can't help any more with this, unless you call Platinum "Bonds" or "Global Bonds", if you don't hold any of these. Hope you understand?
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Albert

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Great stuff Shane. It is problematic to account for metals but entirely doable. I set up a security called XAU (which is the gold price ticker symbol - but the price wont download from US Stock quotes). Then, I purchase per Ounce (troy ounce of 31.1035 grams). I should say I enter the price of XAU daily or whenever in USD. You may find the Kitco website useful for monitoring gold and other precious metals' prices. I think as an asset class, Reckon has overlooked metals, but the work arounds work so you can account for them properly and accurately in Reckon.
(Edited)
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Shane Smith

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Thanks very much for the help Albert, I will give it a try as soon as i can.
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Kevin Russell, Accredited Partner

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Im pretty sure there is custom built software for this. Reckon would have to entail a load of compromises . It ultimately depends on what you are trying to do.