Hi all,
I was wondering if anyone here would be able to suggest a way to handle the following scenario:
How would I handle this in the app as I can’t buy shares without specifying a quantity and a cost. I tried to create a buy entry in the app with zero cost but that’s not allowed.
Hey faulappraiser,
can book a „Delivery (Inbound)“ to your securiy account. However, you still need to specify a price per share but this is referred to as value rather than a debit.
I hope this helps
Thanks for your reply - your idea of using an inbound delivery is interesting.
However, wouldn’t that affect the reporting/dashboards? Seeing as I got the shares for free, my „profit“ today (taxes and fees aside) should be:
today's price x 1000 shares,
however, the in-built reporting would calculate the gain/profit as :
(today's price x 1000 shares) - (price on day the shares were issued x 1000 shares)
How would I get around that?
Hey foulappraiser,
I do not think the „gift“ of shares counts towards your profit. The profit is just what the share did „earn“ for you.
Actually the inbound delivery of shares is almost the same as a buy. A buy is a booking against an account in PP. The money in that account needs to come from somewhere. Of course it could come from yet another PP acount, however, in the end the money enters PP as a delivery.
I hope this helps
I think it is OK that it appears in your profit. If your employer would have gave you money instead of the shares, you would have the money on the account (appearing as cash in your PP), but now you have the shares and they appear with the current price.
Does it sound logical, or did I misunderstand you?
Granted finance isn’t my area of expertise but I always considered „gains“ to be the increase in value since your purchase.
In my case, the gains are the increase in value since I „bought“ the shares for the sum of £0.00 which is why I struggle to get my head around „gains“ being anything else.
As an alternative idea, I’m thinking of creating a transaction in PP where I buy the 1000 shares for a nominal value of £0.01 total seeing as the app won’t let me buy for £0.00. That way, the capital gains would be more accurate in my scenario and be equivalent to today's share price x 1000 shares.
Hey foulappraiser,
I think here lies the problem. Your individual definition of gain is not the typical definition. The gain is just the portion of your portfolio which was „earned“ by your assets, not the assets themselves.
Refere to my explanation where sooner or later everything comes down to deliveries, being it the shares directly or the money you buy shares for through several bookings. Hence, all the money does not count for the performance. @Oliver-H made the point here. The money your employee had given you would have been a delivery as well. Same result as delivering the shares directly but one more booking.
You would cheat on yourself when booking the shares for 0.01. Imagine the share price keeps droping. You would recognize a negative performance of that share if it drops to 0.00 earliest.
Have fun
Hmm…I see where you’re coming from!
This leads me to my next question then, what’s the difference between a „buy“ and an „inbound delivery“?
Hey foulappraiser,
An inbound delivery are shares from outside PP. E.g. used for shares coming from another portfolio at another bank, or … exactly your scenario
A buy is a debit against an account within PP. If you sell shares or get dividends the money goes to that account from which you can buy other shares. To load that account with money you book a deposit from outside PP (similar to an inbound delivery).
I do not know if I was clear enough.
Have fun
That explains it perfectly, thanks!