I am trying to track the current market value of a mutual fund account. In order to do that I have created two accounts:
1) An "Other Current Asset" account (with tax type "Investments - Other") for the investment called "Fund Asset"
2) An "Equity" account (with tax type "Owner's Equity") called "Unrealized Gains"
The initial investment is easy, I record that as a credit to cash / debit to Fund Asset of a hypothetical $1,000.
Then the market value of the fund goes up by 20%. So I record that as a debit to Fund Asset / credit to Unrealized Gains of $200. Balance sheet looks correct, I have $1,200 of assets in Fund Asset, $1,000 of equity in Retained Earnings and $200 of equity in Unrealized Gains.
The problem is when I then run a Statement of Cash Flows. Under "Investing Activities" I see net cash from investing is -$1,200 (when I have only really invested $1,000 of cash), and under "Financing Activities" I see that this is because there is also a line for "Unrealized Gains" for $200.
Now I know why this is happening - QB sees that I "funded" an asset through equity and so it thinks that is both an investing activity and a financing activity. And the "Net Cash" change for the period balances out. But it makes my Cash Flow statement look weird. I didn't actually finance an extra $200 and I didn't actually deploy an extra $200 of cash into an investment.
Is there some way I can tell Quickbooks to ignore the $200 Fund Asset / Unrealized Gains transaction? Using an "Other Income" account for Unrealized Gains doesn't work, that just moves the weirdness to the "Operating Activities" section of the cash flow statement. What I'm hoping is that there is some sort of either asset type, equity type, or both that will cause QB to ignore the transaction for the purposes of calculating the Cash Flow statement.
