Changing to Cost Average

Miguel

Hi,

In Investing, how can I switch to average cost calculation?

My broker has a different cost basis and I want to match it.

I do not see the option when I click on Edit Security, not even for mutual fund.

I am using Canada edition R62.18

Thanks.

CaliQkn

@Miguel as far as I know, in Canadian Quicken, the average cost method isn’t something you “turn on” with a special setting—instead, it’s built into how Quicken processes investment transactions. When you enter purchase transactions for securities (like shares in stocks or mutual funds), Quicken automatically calculates the weighted average cost per share based on the total dollars you’ve spent (including fees or commissions) divided by the total number of shares you hold. Here are some pointers for working with average cost in Canadian Quicken:

1. Enter Transactions Accurately:
   Each time you buy an investment, record the number of shares, purchase price, and any associated fees or commissions. Quicken adds these amounts to your existing cost basis and automatically recalculates an average cost per share for that security.
2. Review the Investment Details:
   When you double-click an investment within your account register, you should see details like the current market value, the total cost basis, and the resulting average price per share. This display is how Quicken shows you your average cost. It updates after every new transaction, so every purchase (or reinvestment) affects the overall average.
3. Selling Transactions:
   When you sell an investment, Quicken uses the average cost basis to compute your gain or loss. This is particularly useful if you’ve made multiple purchases at different prices over time because your sale will be compared against the weighted average rather than a specific “lot.”
4. Manual Adjustments:
   If you ever feel that the computed average cost isn’t matching your expectations (which sometimes happens if corrections or adjustments are needed), check that all related costs have been included in your transaction entries. In cases where you might have used advanced features like lot tracking or specific identification for certain transactions, the display may differ. In those instances, reviewing the transaction history and recalculating manually (or re-entering corrections) can sometimes be necessary.
5. Currency and Regional Considerations:
   Since Canadian Quicken handles transactions in Canadian dollars—and sometimes investments might involve currency conversion—the average cost calculation will incorporate these amounts. Make sure that the figures you input reflect the true purchase cost, including any conversion adjustments if applicable.

If you find that the average cost isn’t updating as expected, consider checking your transaction entries for accuracy or reviewing the investment account preferences to ensure no alternative costing methods (like lot-specific tracking) are interfering with the default average cost calculation.

Miguel

Hi., Thank you for you reply.

I reallize that Quicken is doing lot tracking and maybe that is the reason.

How can I turn that off and see if this make it better?

I do not remember that I have told Quicken to do lot tracking but I see that it is showing the shares I buy it Lots.

HOw can I change that?

Regards,

CaliQkn

@Miguel as mentioned previously, in the Canadian edition of Quicken, the average cost method is built into how investment transactions are processed—it’s not something you can simply toggle on or off. When you enter purchase transactions for securities, Quicken automatically calculates the weighted average cost per share based on the total dollars spent divided by the total number of shares held.

If you’re looking to adjust how cost basis is tracked, you might need to manually review and edit transaction entries.

Some users prefer lot-specific tracking, which allows them to track individual purchase lots separately rather than averaging them. This method is useful for tax reporting and investment analysis, but it may require manual adjustments since Canadian Quicken defaults to average cost.

Miguel

Hi

Thanks. I see what you mean, but what I was trying to explain is that Quicken is doing lot-specify tracking and that is not what I want. I did not choose it. When I go and see the security in my portafolio, Quicken show the account and then I click on the securities and inside the security I see the Lots for each group of shares I bought.

My question is then:

1. Is it correct? I want just for quicken to calculate average cost.
2. If it not correct, what can I do to avoid Quicken tracking the Lots specifically as it is apparently doing it?

Regards,

CaliQkn

@Miguel

— 1. Yes, the default is average cost.

—2. If you are seeing anything other than average cost, here’s what you can do:

1. Check Security Settings – In Quicken, mutual funds typically default to average cost tracking. You can verify this by going to Tools > Security List, selecting the security, and checking if the option to use average cost is available.
2. Review Transaction Entries – If your investments are currently tracked by specific lots, you may need to manually adjust past transactions to reflect an average cost basis. This involves ensuring that all purchases are recorded correctly so Quicken can calculate the weighted average cost.
3. Rebuild Lot Assignments – If Quicken has assigned lots incorrectly, you can use the lot validation feature in the File Validation, to check for broken links between purchase and sale transactions. If necessary, Quicken will reassign lots using Implied FIFO, which may help align your records with an average cost basis.

Since Canadian Quicken does not have a direct setting to switch between lot-specific tracking and average cost, you may need to manually adjust your transaction history to reflect the correct cost basis.

Miguel

ok. Thanks.

The option to use average cost is not available.

Regards,

Miguel

ok. Thanks.

The option to use average cost is not available.

Regards,

CaliQkn

@Miguel Average Cost is the default for Quicken Canada and is used unless some other method is used such as lot specific tracking. If you will not see the option to use average cost because it is used by default. The step #1 is if you see an option to use average cost, but if you don't see then that means average cost is being used by default.

Arctic Hare

https://community.quicken.com/discussion/7962930/changing-to-cost-average

In order to get the same adjusted cost basis in Quicken as that reported by your broker, you will have to handle all fees and expenses the same way that your broker does. Are you certain that you are tracking and allocating all trading fees and other expenses exactly the same way your broker does?

As indicated by others, Quicken Canada using average cost, so I don't believe that the lot recording is causing the issue. FWIW, I think that the lot recording is a consequence of using the same code for the USA and CAD version of Quicken - where the feature differences are controlled by switches that cause certain features to be turned on or off specific to each version. Put another way, I think the lot recording is a red herring and that average cost is the only cost calculation method used in the Canadian version. Hence, any differences are likely due to differences in how fees/expenses are recorded.

If I'm wrong about any of the above, I hope someone chime's in and sets the record straight.

Miguel

Thanks a lot.

I will check all the transaction and see.

I am using the Canada edition for sure.

Regards,