Bug 388556

This is a very serious bug. My accountant queried why my balance report for last financial year was completely inconsistent with my income/expenses report for the same period and it took me ages to work out it is due to this bug. I am using version 5.0.8.

Have the developers a plan to fix this?

Can someone provide a sample file that shows the problem? That would help a lot and is very much appreciated.

Thomas, https://www.dropbox.com/s/xyjpodeixkomp43/kmmtest.kmy is a trivial example file which does nothing else but show the problem. I buy $30K of A200 stock (@ $150 each) in Mar 2018 leaving $70K in my bank account. So, without any other transactions, my 2018/2019 year end value is still $100K. If I then merely add a new price for A200 of $200 each at date 1-1-2020 (i.e. after that financial year), then my 2018/19 year end net-worth suddenly becomes $1!0K but it should remain at $100K. See the 2 favorite reports.

Thomas, investigating this problem has exposed a very fundamental but related issue which I do not understand so perhaps you can comment? If I simply add a new increased price to a stock I hold (either manually or via online update) then the value of my portfolio rises by that amount at that date however this asset value increase is not reflected in any real transaction (i.e. no category receives the increase) so although my net-worth report shows that increase for the period a income/expenses (i.e. cash flow) report for the same period does not reflect it. Consequently my accountant tells me my reports are inconsistent. Surely when a price is updated causing a stock to increase in value then some category should be attributed with that increase?

I disagree.  The net worth has increased, but the gain is unrealized until the shares are actually sold.  The current value of any stock is the number of shares times the price.  It varies as the price does.  Check your statement from the brokerage institution - it will show a change in value of stock due to price changes, with no cash flow associated until the stock is actually sold.

Please be sure to note that my comment #4 here is about an issue completely separate from this bug. This bug exists (since Jan 2018 at least) and I give a sample file showing it in my comment #3. I am just also asking here about another issue.

@Jack, so you are saying you are happy that you net-worth and your income/expense reports are in-consistent and don't add up?

I just don't see why the action of adding a new price does not also automatically accumulate into a category e.g. called "unrealized investment gains". You may not care to add  that category to your flow reports but I may just so I can get a consistent report.

I guess another way to re-frame my second question here is to ask - how can I configure unrealized investment gains out of my net-worth report? I.e. I think I am asking for a balance sheet report.

I am just another user. So no expert here... but this is my experience:

I do not think the Statement of Cashflows will match the Income and Expense report. 

Income and Expense would not include any transfers between assets and liability accounts. Whereas a Statement of Cashflows would. 

In KMyMoney, I create a Statement of Cashflows by starting with a Net Worth report. Then, I un-check the liability accounts in the options/configurations. 
I also check the 'include transfers'. 

Next, I rename my report to Cashflow. 

The Net Worth report in its default state is more akin to a balance sheet. 

A simple example of when a Cashflow and Income/Expense will not match, a for example a mortgage. 

Mortgage: 1500 dollars
broken down as follows. 
Interest: 700 dollars
Insurance: 500 dollars 
Principal: 300 dollars 


The income statement will capture the Interest and Insurance expenses. 1200 dollars. 

The Cashflow will capture the 300 dollars that left the assets(checking) to bring down the liability (loan/mortgage). 

Also, the unrealized gains.. how would the unrealized gains from home equity fit into this? If my house was purchased at $200K and now is appraised at $250k, how would I see the $50k? Your suggestion is that there would be an Unrealized Gain account. Would that account only be updated when I get an appraisal(once a year)? 

https://www.investopedia.com/terms/a/accounting-equation.asp

I am very interested in how this turns out. Thanks

JV

@Thomas,

1. Does that small sample file I provided adequately demonstrate the problem?

2. For the second issue, so is there no way to produce a balance sheet / net worth report that is consistent with reported income and expenses? There should be a way to configure unrealized share gains out of the net-worth report when they are unaccounted for by any +/- transaction. Surely you guys can see what I am on about here? In preparing my tax return, my accountant charged me an extra $1600 to deal with the confusion about my inconsistent reports. :(