# Calculation of Capital Gain Edit Subject

Can someone please explain how the capital gain shown on the page for an individual security is calculated? I was under the (obviously mistaken) impression that capital gain was simply the market price of a security minus its total cost.

Looking at my VAS.ASX holding as an example, the total cost is the \$6,051.82 NZD I paid for 83 shares, whilst the market price for the 84 shares I currently hold (the 83 I purchased, plus one from a DRP) is \$6,262.22 NZD. According to me, this results in a capital gain of \$210.40, but the page shows a capital gain of \$634.67.

What am I missing?
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this question
• Hi Rodney,

Thanks for your question.

As this is a foreign currency share in your portfolio and the returns are displayed in your local currency (NZD), there is both an exchange rate component and a capital gain component to the difference between the NZD cost price and the NZD current value. You should find that if you sum the capital gain and currency gain figures in Sharesight you arrive at the figure that you are expecting.

Also note that you need to compare the cost of the 84 shares (including the DRP share) with the current value of the 84 shares. This is because the dividend value is included in the dividend gain component of the total return, so it is not double counted as a capital gain by excluding it from the purchase value.
• So setting aside currency gains (they don't apply in my case), is capital gains simply the difference between current value and original cost? And how is the percentage calculated?
• Hi Allan,

Thanks for your post. To answer your question, yes this is correct for the simplified calculation for your capital gains. However, the percentage return figure is annualised for you in your portfolio and thus more complicated.

To have a look at how this calculation works: http://help.sharesight.com/performanc...

Hope this helps.

Cheers,

Emma
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