Record changes in market value of brokerage account held by S-Corp

My S-corp owns a brokerage account that is managed by an advisor. Every quarter, I receive a statement showing the advisor fee taken out, any interest and/or dividends applied, and any loss/gain to the market value of the account. There is buying and selling by the advisor going on all the time in the account, so I do have tax ramifications that must be accounted for on Form 8949 of my 1040 return as a result of a 1099-B which I received.

Do I need to record any of this in Quickbooks for the S-corp? For instance, in the first quarter after the account was opened, there was $143.44 advisor fee, $.92 interest & dividends, and $860.66 in loss of market value. Do I just keep showing the opening balance of the account on the balance sheet, or should I adjust it every quarter to reflect its true value? If the latter, what accounts should I debit/credit to accurately record these intra-brokerage-account transactions?

Answer:

1. You need to create your adjustments.
2. As you know, S-Corps can choose an accounting method best suited to report the income and expenses of the company. S-Corps are not required to use the accrual method of accounting; they may choose the cash method or a hybrid method of accounting if those methods of accounting. A bookkeeper's job is to accurately/timely record all inflows and outflows of cash into the S corp so shareholders may report profit and loss statements to the IRS. Keeping track of financial information is essential for any business. Once the balance sheet is done, that doesn't always mean it's done. Businesses are constantly changing and not only does the business need to be flexible and... Read more...