The MSN Money cost basis may differ from the Money cost basis in the Portfolio

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SUMMARY

MSN Investor and Microsoft Money may calculate different cost basis values for your investments.

MORE INFORMATION

MSN Investor uses FIFO (First In First Out) to calculate the cost basis for your remaining investment shares. Microsoft Money also normally uses FIFO. However, Money can also use Average Cost. Additionally, Microsoft Money 99 and later can also use Lots.

The example in the following table shows the difference between the FIFO and Average Cost accounting methods:

Date Activity Amount Cost Avg. Cost Average Cost Basis FIFO Cost Basis
1/1/97 Buy 10 $10 $10 $100 $100
2/1/97 Buy 10 $20 $15 $300 $300
3/1/97 Buy 10 $30 $20 $600 $600
4/1/97 Buy 10 $40 $25 $1000 $1000
5/1/97 Sell 30 $40 $25 $250 $400


When you use the FIFO accounting method, you sell the first securities you purchased (in this example, the securities you purchased in the first three transactions). The program then uses the earliest cost for the remaining securities to calculate the cost basis (in this example, the program uses the cost for the securities you purchased purchased on 4/1/97).

Money and Investor both use the following formula when they use the FIFO method:
Cost X Amount = Cost Basis
The following example of a FIFO equation uses the information from the previous table:
$40 X 10 = $400
If you configure Money to use the Average Cost method, it uses the following formula:
Avg. Cost X Amount = Cost Basis
The following example of an Average Cost equation uses the information from the previous table:
$25 X 10 = $250
Money 2000 and later versions let you associate a "price" with transfered shares when you use the Add Shares feature. This price, if provided, is used in Money's Cost Basis calculations.

For more information, click the following article number to view the article in the Microsoft Knowledge Base:
164450 How to view or add stocks that are purchased at different prices in MSN Money

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Article ID: 174999 - Last Review: February 24, 2014 - Revision: 10.4
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