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Double Entry for Investment in Accumulation Funds

i need to know the doible entry for an investnent in accumulation funds

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I am currently doing the accounts for a company which has an investment in an equity fund.  The double entry for the original purchase is:

CR cash

DR Investment account

the equity fund is an accumulation unit where income is not distributed to an investor but is retained in the fund and reinvested.  The accumulation is still taxed as income and is added to the base cost of the investment.

i need to know what the double entry for the increased base cost is - i assume it is DR Investment Account but what is the credit side????


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03rd Dec 2018 20:03

I usually treat it as though income was received, then used to purchase additional units. So Cr Investment income in your case.

If there is no actual income, then it all goes into investment gains/losses with the rest of the change in NAV

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