How to post profit on sale of shares

[Former Member]

Hi,

We have one scenario where company XYZ is investing their money in equity share / Preference share and Mutual Fund. we are using Treasury module to track these type of activity.

XYZ has purchased 1000 shares @ Rs10 each. We have posted this transaction through Treasury module. They are selling 200 shares @ 12 each.

We have use Transaction Type 100 - Purchase and 200 - selling. We can root this transaction with TT 200. My Question is how to book profit.

Regards

BHS

[Former Member · Accepted solution]

Hi,

You can book realised profit by TPM 18.

As default setting system books profit by Average Purchase rate therefore check your client they require it Average basis or on FIFO basis.

If Average basis, system is default giving but if FIFO basis then do the lot generation config in securities and assign FIFO. System will pass profit on FIFO basis.

FIFO basis example:- Suppose you purchase 100 unit @ 10 and 50 Unit @ 15 and sold 110 unit @ 20. system will first consume 100 unit and pass profit 10100 and then consume 10 unit from other lot and pass profit 105.

Regards

Narinder Pal Verma

+91-9818882409

Edited by: NARINDERVERMA on Feb 7, 2012 10:23 AM

[Former Member · Accepted solution]

Hi

Thanks for giving valuable input to resolve the issue.

Brijendra