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Inspect the reason for the entry
An owner’s cash contribution increases available capital without being an investment gain. A cash dividend from a held security is investment income even if its bank credit looks similar. A sale exchanges an investment for cash and is not automatically an external withdrawal.
State which account is being measured
A transfer between two subaccounts may be internal for the combined portfolio and external for either subaccount viewed alone. The chosen portfolio boundary determines the classification. A transaction name by itself may not answer that question.
| Movement | Combined portfolio interpretation |
|---|---|
| Owner adds new cash | External contribution |
| Security pays a dividend | Investment income |
| Security sold into portfolio cash | Internal asset conversion |
| Cash moves between included subaccounts | Internal transfer |
Retain the event date
The same contribution at the start or end of a period funds different amounts of investment exposure. A flow-adjusted endpoint formula cannot be interpreted without a timing assumption. Preserve pre-flow and post-flow values when exact subperiod returns are available.
Resolve unknown entries
Mark an unexplained ledger amount as unresolved rather than silently calling it a gain. Reconciliation should identify whether balances, distributions and owner movements fully explain the endpoint change. That evidence supports the measurement choice.