Part 2 in this series of tracking investments in your QuickBooks Desktop file will only cover tracking your cost basis of your paper investments.

For each type of equity holding that you purchase:

Example: 50 shares of XYZ, Inc. at a market price of $2/each = a value of $100 cost basis.

I like to create an Other Asset type of account and will title it:

XYZ, Inc. – cost basis

Typically in a managed brokerage account, these shares are purchased with moneys already existing in some sort of Cash/Money Market account already within your brokerage account. So a money manager will simply make this purchase, then on your statement, you will see:

Cash/MM reduced by $100.

Shares of XYZ, Inc. increase by $100.

Moneys that have already existed in your Cash/MM account will, of course, have already been reflected in your bookkeeping file as well. Perhaps, you transferred moneys into this account (some time ago) from a personal bank account, that way your money manager has the funds necessary to purchase those XYZ, Inc. shares.

Also, keep in mind that when your money manager purchases equity holdings, there may be up-front commissions and taxes that are also part of the equity purchase. These up-front fees will increase your overall cost basis and thus the value of your portfolio, so be sure to include these fees in the cost-basis within your bookkeeping. I personally like to separate these fees into yet another Other Asset type of account, that way I can track these separately (to see the total up-front fees I have been paying) and also won’t dilute the true share price cost basis of my equity holdings.

Stay tuned for part 3 of this investments tracking series.

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.