Why Purchase values doesn’t take in account Dividends?
On my Bank Trade app Incoming dividends reduce the Purchase values and this seems correct to me.
thanks,
Because this is a tax view which is not supported by PP.
why you say Tax?
I’m talking about income dividend of ETF, Shares etc.
I mean that every regular dividend should decrease the purchase value graph, it should be taken in account as for the IRR.
Those are reflected in Statement of Assets.
My broker doesn’t do that unless the dividend is payed out of the so called “steuerlichen Einlagekonto” (Google translates that to “tax-recognised contribution account”).
A reduced purchase value means that you have to pay more taxes on the profit when selling these stocks. With dividends of above type you can see that as correct but for all others you have payed taxes on them already, so reducing the purchase price in addition to that would mean double taxation.
That line would sooner or later fall below zero which would lead PP to be in tears when trying to do calculations on that.
You can get this effect if you apply the ‘Invested capital’ metric to your security or account. But not on the purchase price. It will decrease with dividend.
Generally, in accounting and investing, there are two different ways people think about dividends in relation to book cost. Some, possibly such as your bank @Daniele_Ziglioli, treat each dividend as a return of capital that reduces the original investment outlay, while others view dividends as an investment return rather than a reduction in acquisition cost.
There are merits to both approaches — neither is inherently wrong and yup the “dividends reduce book cost” approach may appeal to income investors or yield-on-cost enthusiasts.
However, PP is fundamentally designed around performance measurement rather than “capital recovery” accounting. This aligns more closely with fund accounting, institutional performance reporting, and total-return investing principles.
That said, as @Sn1kk3r5 pointed out, PP’s Statement of Assets report can be configured to include both the total amount of dividends received and the absolute return. This may make it easier to mentally track an investment using the reduced-book-cost perspective if that is your preferred approach.