What is Average Cost Basis

Average cost basis (ACB) is a way of computing the cost basis of an investment.

There are a number of ways of computing an investment’s cost basis, but ACB is typically used in the following situations:

• US mutual funds cost basis calculation
• Canadian stocks and funds cost basis calculation

How Does StockMarketEye Compute Average Cost Basis

StockMarketEye computes both the Average Cost Basis (ACB) value and the Standard Cost Basis (SCB) value for all your investments.

The SCB calculation is lot based. Each purchased lot of a stock or mutual fund has its own cost basis value:

(price-per-share * number-of-shares) + commissions + fees

For multiple lots (i.e. multiple purchases) of the same stock, each lot retains its own, original cost basis value.

The ACB calculation is similar to the SCB calculation. In fact, for single lot purchases, the SCB and ACB are exactly the same. However, the ACB differs from the SCB when multiple lots have been purchased.

For multiple lots (i.e. multiple purchases) the cost basis of each lot is added together to arrive at a total cost basis value. The total cost basis value remains the same until an addition purchase is made.

A per share ACB value is computed by dividing the total cost basis by the number of shares currently owned.

When selling shares, the ACB per share value is used to compute the capital gain/loss. If not all of the shares are sold (partial sell) the remaining shares keep the same ACB per share value they had prior to the sale.

Viewing Your Investment’s Average Cost Basis

By default, StockMarketEye shows SCB in the “CostBasis” column. You can change this by setting the calculation method in the portfolio’s Properties .

StockMarketEye provides a number of special columns that can be added to your portfolio to show the ACB of your holdings.

• SCB – The standard cost basis (i.e. individual lot based)
• SCB/Share – The standard cost basis per share
• ACB – The average cost basis value
• ACB/Share – The average cost basis value per share
• CostBasis – Either the SCB or ACB value, depending on your portfolio’s Property setting.
• CostBasis/Share – Either the SCB/Share or ACB/Share, depending on your portfolio’s Property setting.