How do I record investment gains or losses?
This article is for churches and charities that account on an accruals basis.
Investment gains and losses are recorded within each specific investment, accessed via the Investments module.
You can enter the details of the gain or loss to make the accounting adjustment. This will then be reflected in the investment table as shown below:
What if the investment gain is paid into our bank account?
Often the investment gain is retained and reinvested in the investment.
However, if money from an investment gain is paid into your bank account you need to:
- Firstly add the 'investment gain' to the investment account (to increase the value of the investment);
- Then, match the money paid into your bank account as Investment Returned (see image below).
This will cause the investment balance to decrease back to the originally invested amount.
Note that in accruals accounting, money paid into your bank account from your investment is not classed as income, as it is a transfer between your investment asset and your cash asset.
To help you better understand the Investments module as a whole, please visit the module overview page here.