1. What Is Adjusted Cost Base?

The Adjusted Cost Base (ACB) represents the average cost per share of an investment, including all acquisition costs and fees. It is used to calculate capital gains or losses for tax purposes when selling investments.

2. How Does The Calculator Work?

The calculator uses the ACB formula:

Where:

• \( Total\ Cost \) — Total purchase price of shares (currency)
• \( Fees \) — All associated transaction fees (currency)
• \( Shares \) — Number of shares purchased (unitless)

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

3. Importance Of ACB Calculation

Details: Accurate ACB calculation is essential for determining capital gains tax liability, tracking investment performance, and making informed selling decisions.

4. Using The Calculator

Tips: Enter total cost and fees in your local currency, and the number of shares purchased. All values must be positive numbers with shares being at least 1.

5. Frequently Asked Questions (FAQ)

Q1: What costs should be included in ACB?
A: Include all acquisition costs - purchase price, brokerage fees, commissions, and any other transaction-related expenses.

Q2: How is ACB used for tax purposes?
A: ACB is subtracted from the selling price to determine capital gains (if positive) or capital losses (if negative) for tax reporting.

Q3: Does ACB change with additional purchases?
A: Yes, ACB is recalculated each time you purchase more shares of the same investment, creating a weighted average cost.

Q4: What if I receive stock dividends or splits?
A: Stock dividends and splits adjust your ACB downward since you receive additional shares without additional cost.

Q5: How does ACB differ from book value?
A: ACB is your personal cost basis for tax purposes, while book value refers to the company's accounting value per share.