1. What Is Adjusted Cost Base?

Adjusted Cost Base (ACB) represents the average cost per share of an investment, accounting for all purchases, commissions, and adjustments over time. It is used to calculate capital gains or losses when selling investments.

2. How Does The Calculator Work?

The calculator uses the ACB formula:

Where:

• \( \text{Total Cost} \) — Total amount invested including commissions and fees (currency)
• \( \text{Total Shares} \) — Total number of shares owned (shares)

Explanation: The formula calculates the average cost per share by dividing the total investment cost by the total number of shares acquired.

3. Importance Of ACB Calculation

Details: Accurate ACB calculation is essential for determining capital gains tax liability when selling investments. It helps investors track their true investment costs and make informed selling decisions.

4. Using The Calculator

Tips: Enter total investment cost in your local currency and total number of shares owned. Both values must be positive numbers greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What Is Included In Total Cost?
A: Total cost should include purchase price, commissions, transaction fees, and any other costs directly related to acquiring the shares.

Q2: How Does ACB Affect Capital Gains?
A: Capital gain = Selling price - ACB. A higher ACB results in lower capital gains and potentially lower taxes.

Q3: When Should ACB Be Updated?
A: ACB should be recalculated after each additional purchase of the same security to maintain accurate cost tracking.

Q4: Are Dividends Included In ACB?
A: Regular cash dividends do not affect ACB. However, reinvested dividends through DRIP programs do increase ACB.

Q5: What About Stock Splits?
A: Stock splits adjust the number of shares but not the total cost, so ACB must be recalculated after splits.