I know I asked you informally about this outside the Forum, but to be fair to all, maybe I share the question here and what I think is a better solution to record the occasional Fractional Share Adjustment than what I have been doing to date.

Problem:
From time to time, my Broker records a "fractional share adjustment" transaction for Mutual Funds, where I suddenly get an additional Fraction (most times 1/ 1,000s of a unit) or lose a Fraction (most times 1/ 1,000s of a unit). Don't ask me why.

Anyways, to date, I have recorded this as a Split Transaction. Let's say pre-adjustment I held 140.111 units, then the broker has a 0.001 "down adjustment" in units, so now I hold 140.110 units. I used to do a Split of "140.111 Old/ 140.110 New Units".

Problem with that is that for previously discussed reasons, a Split sometimes changes the Total Cost of the holding -- often by Pennies. Split transaction are just "ugly".

Alternate (better?) Solution:
To circumvent the known "issues" Splits are causing, what do you think about using a "Dividend Reinvestment" instead, where
a ) # Shares is the # of Fractional Adjustment units" -- positive if an increase, negative # Shares if a decrease.

b ) Share Price is zero

c) everything else (Commission, Fee) is zero.


This should:
1 ) Change the # Units accordingly to match Brokers records again,

2 ) leave Total Cost untouched (# Reinvested Units x zero Share Price is zero Total Cost) -- exactly like reported/ recorded by my broker, no Change in Total Cost,

3 ) Causes no realized Gain,

4 ) Does not change the Cash Balance.


Is this a better way to deal with Fractional Adjustments in # Units held than a Split?

Do you see any other issues such "abuse" of the "Dividend Reinvestment" transaction type could cause in any other calculations -- other than the challenge that if I re-sort my transactions or later search for such adjustments, I couldn't tell them apart from "real" Dividend Reinvestments -- unless we give it its own "Fractional Adjustment" Transaction Type where the only enabled field is the # Shares field, hint, hint ;-). I checked, it already allows both positive and negative # Units.

Thx

If that works for you, you can certainly use it. Also check out the Transfer In and Trasnfer Out transaction types, which may be better suited for this task.

Anatoly -- can you lend me some help -- both suggested solutions for Fractional Adjustments have a problem I didn't anticipate:
Remember my setting is "Average Cost".

1 ) Use "TRANSFER OUT":
I tried Transfer In/ Out, but Transfer Out doesn't work in my case: Reason is my broker's adjustment is a fractional UNIT adjustment only. Total Cost (TC) of Holding remains unchanged.

I now remember the Problem with PSM's Transfer Out feature (Transfer In appears to work ok): It reduces not just the # Units, but also proportionately reduces the Total Cost. But in my case, the Total Cost doesn't change, just the # Units.
Can you tweak the "Transfer Out" feature such that the user can specify not just the # Units transferred out, but also the Transfer Out price per Unit? It can be pre-populated with the current Total Cost per share the way it calculates by default right now, but there should be a way to manually override it -- in my case, I would use zero.

2 ) Use "DIVIDEND REINVESTMENT" with a negative share number:
This, I believe, led to erroneous behavior by PSM, see the following example:
a ) Buy 100 units @ $10 = $1,000 Total Cost.
b ) Reinvested Dividend: -0.001 units @ $0 = $0 Total Cost.
All good so far. I now hold 99.999 units with $1,000 Total Cost.
c ) Buy 200 units @ $20 = $4,000 Total Cost.
Holding should now be 299.999 units with Total Cost of $5,000. # Units is indeed 299.999, but Total Cost is $3,000.02 instead of $5,000???
And the "Buy" transaction c ) shows a Loss of -$1,999.98, when in reality a Buy transaction should never have a gain or loss in and by itself ???
It appears that maybe my negative Dividend Reinvestment clashes with the way Lots or maintained in PSM with "average cost" setting. One lot shows 300.002 units with a Total Cost of $3,000.02, the 2nd lot -0.003 units with zero Total Cost. That is all way off.

Can you kindly see whether this -- both the Transfer Out issue and the Div Reinv issue when using negative share count -- can be fixed?

Thx, Anatoly.

Ok, I see now that your broker insists on making life difficult for us.

The problem is that the BV is calculated from the total shares, so any adjustment to total shares will affect the BV. It's also not just a matter of having an "Adjust BV" transaction, because what happens when you sell all your shares? You still have this strange transaction left over, and how do you account for it? Also, if you later go and sell only part of your holdings, then only part of that adjustment takes part in the gain calculation.

So I don't think there is anything to "fix" in the transaction types we have, since they work correctly for the purpose they were designed. It's just that there is currently no clean way to handle your special case.

Anatoly, with the clarification in another Topic that by BV I meant Book Value which is what you call "Total Cost", I think that changes the answer above? I updated all my posts above and changed BV with Total Cost instead. Can you kindly re-read the above and consider?

Here is what I see is the problem in PSM, and it might just be a bug and an easy fix:
With PSM, each "Reinvested Dividend" transaction creates its own Lot. So, if I had 2 Buy transactions and 1 Reinvested Dividend, PSM records 3 Lots. Perfect. This also works if you have a "Reinvested Dividend" with a positive number of units only, but zero as Reinvestment Share Price, zero Commission, zero Fee. Hence, I can "abuse" Reinvested Dividend to record a positive Fractional Unit Adjustment (Unit Increase) that does not change the Total Cost of my Holding. Works well.

However, if I try to record the above 3 transactions a - c, where b ) uses NEGATIVE units, I end up with TWO Lots instead of 3. The dates of the two Lots are the dates of transactions a ) and b ).
The Lots show as follows:
Lot 1: 300.0020 Shares, $3,000.02 Total Cost.
Lot 2: -0.003 Shares, $0.00 Total Cost.
Correspondingly, Total Holding is 299.999 Shares, $3,000.02 Total Cost.

It should be:
Lot 1: 100 shares. $1,000 Total Cost.
Lot 2: -0.001 Shares. $0.00 Total Cost.
Lot 3: 200 Shares. $4,000 Total Cost.

Correspondingly, Total Holding: 299.999 Shares, $5,000 Total Cost.

Somehow, PSM messes up the lots and doesn't keep them clean when you record a Reinvested Dividend with negative number of Units. Can you fix that?

Thx

PS: A side-note: PSM allows me to enter negative Number of Shares in the "Transaction Register Input Mask", and stores them correctly as such. But when you save and then re-open the "Reinvested Dividend" transaction, it always displays number of share units as a positive number in the "Transaction Register Input Mask" -- even though it knows it's negative. Can you fix it such that positive shows as positive, negative as negative when you re-open the Transaction in the Mask?

It doesn't really change the answer. Since the total cost (BV) is calculated from the number of shares (number of shares * purchase price + commission + fees) any change to the number of shares will change the total cost. There is really no way around that without messing with the fundamental way we calculate total cost, and I'm not really willing to do that right now because it's bound to have unforeseen consequences.

The bug seems to be that we allow you to enter negative shares at all. The software was never designed to handle entry of negative shares, because we use negative shares internally to indicate a short transaction.

I was thinking about this some more, and my question is: how does your broker calculate the total cost (BV)? If they adjust the number of shares, why DOESN'T the BV change?

Anatoly, just to clarify: The adjusted # of Shares
-- does change Total Value (Market Value) as it's obviously always # Shares x current Share Price.

-- does NOT change Total Cost because these shares are moved in (positive) or out (negative) at zero cost per share. Call them free "Bonus Shares" in the case of positive, I don't know what to call them for the negative scenario.

Basically, Total Cost of Holding remains stable, which of course means that average cost per share changes accordingly to offset the change in total units held. But for Total Holdings, Average Cost per Share is reverse-calculated anyways based on the “real” numbers in the individual Lots. And by using Lots, my Broker never has to touch the original Transactions -- they just have a stand-alone "Fractional Adjustment" Lot transaction with zero cost per share and hence zero Total Cost that takes care of this. Thereby, Total Cost for entire Holding remains unchanged, number of units for Total Holding is changed properly, and all is accounted for.

By treating the Fractional Adjustment as a separate Transaction/ Lot (which luckily PSM does as well), a Fractional Adjustment will never change the Total Cost of any previous Transactions -- it gets its own Total Cost and Lot. And by giving it a cost per share of zero, it doesn’t impact the Total Holding Cost – just the number of units. Without changing any PSM code.

So, the only problem in PSM is that a negative Reinvested Divided does not create its own Lot for some reason (a positive Reinvested Dividend does already). Instead, a negative Reinvested Dividend messes with previous transactions.

Can you not just simply ensure that a negative Reinvested Dividend stays as its own Lot without messing up other Lots -- that's really the only gap, and all that’s required. Everything else works already.

BTW – I originally switched over to PSM from MSN Investor, which had both a feature to adjust # Units without impacting Total Cost (“Add Shares”, “Remove Shares”), as well as a feature to adjust Total Cost of a Holding without changing number of units (“Reduce Total Cost”, “Add Total Cost”. I assume they figured there was a valid reason for these 4 transaction types. The beauty is -- PSM can do all this already via “Reinvested Dividends” transaction type – except for the issue of “Remove Shares” (without changing Total Cost). And technically I think PSM can already do this as well, just that such transaction currently messes with previous transactions/ LOTS and creates unintended results, instead of just creating its own Lot.

I really think this is much simpler than you might think, Anatoly, unless you see big problems/ issues with ensuring that a Reinvested Dividend that has negative # of units and zero cost per share is kept as a stand-alone Lot. And if that's a problem, why not just have a simple new transaction type "Add/ Remove Shares" that creates its own Lot (regardless of whether adding or removing) and has zero cost per share, hence automatically a resulting zero Total Cost for that Transaction.

Ahh, you're right, at zero cost per share it will not change the Total Cost. Must have been too early in the morning and I wasn't thinking straight.

As I said, we use negative shares internally to indicate a short, so I don't know if I can allow negative reinvested dividend transactions. Having an Add/Remove Shares may be easier because then all share values entered would remain positive.

Ok, let's try this change that allows you to enter (and edit) negative shares in the Reivent Div transaction. Test build is here:

http://www.personalstockmonitor.com/_downloads/psm/beta...

Hopefully I didn't mess anything up with short positions in the meanwhile.

Thank you very much, Anatoly. Just tested it, works very well, exactly as expected.

Negative Reinvested Div with zero Share Price creates its own Lot with zero Total Cost for such change ... leaving Total Holding Cost Unchanged, but decreasing # of Shares. Perfect!

Thank you so very much, I hope it didn't mess up your short position logic.

I've also installed the update, and it does not appear to have messed up my options positions (mostly negative number of contracts.) I haven't yet entered a new transaction either for a sold option, or to close one, but options expiration is coming up this week, so as I close the expiring options, it should exercise the logic. Will let you know if I find any problems.

Thanks!

Just entered a sell transaction for a put, and it remains correct. I look at current price and Total Value, the Avg and Total Cost, the Gain, % Gain and change. They are all showing exactly what they should. Appears to be working just fine.

Fractional Share Adjustment via Reinv. Dividend with both positive and negative # Shares (zero Share Price) appears to be working well -- ver9.2.3. build 350.

Thanks for the enhancement!