TRES supports multiple accounting methodologies to calculate cost basis, allowing finance teams to align reporting with internal policies or regional accounting standards.
Cost basis represents the original value of an asset for tax, accounting, or performance purposes and determines realized gains or losses when assets are sold or transferred.
Supported Cost Basis Methodologies
TRES supports the following cost basis methods:
FIFO (First In, First Out)
WAC (Weighted Average Cost)
LIFO (Last In, First Out)
Specific ID (Maximize Gains)
Specific ID (Maximize Losses)
Each methodology provides a different perspective on how assets are valued when they leave your wallet.
First In, First Out (FIFO)
Under FIFO, the first asset acquired is the first one sold.
When an asset leaves a wallet, TRES calculates its cost based on the oldest remaining lot of identical assets.
Example:
A wallet sends out 0.017266 MATIC. The system deducts this amount from the first MATIC lot in the stack and applies its unit price (0.97967 USD) to calculate the cost basis. Future transfers continue to draw from the oldest lot until it is fully depleted, then move to the next.
As you can see the amount of the token transferred out .017266 is deducted from the first lot of the Matic stack and the cost basis is calculated based on the unit price of the first lot in the stack, in this case, 0.97967. Future Matic transfers out of the wallet will continue to reduce the 1st lot of the stack until its balance is reduced to zero at which point the next lot in the stack will be used to calculate cost basis.
Weighted Average Cost (WAC)
The WAC method determines the cost basis by dividing the total acquisition cost of all identical assets by the total quantity held. Each time a new inflow is received, TRES recalculates the average cost automatically.
Formula:
Weighted Average Cost = Total Cost of All Units ÷ Total Units Held
This method smooths out price fluctuations and is often preferred for portfolios with frequent inflows and outflows.
Last In, First Out (LIFO)
LIFO assumes that the most recently acquired assets are the first to be sold. When an asset leaves the wallet, TRES uses the most recent purchase price from the stack to calculate cost.
Example:
If a wallet disposes of ETH received on May 25, 2023, the cost basis will be taken from that same May 25 lot.
Specific ID (Maximize Gains or Losses)
Specific Identification allows users to define which specific lots are sold.
TRES automates this using two optimization modes:
Maximize Gains: Selects the lots that produce the highest realized profit.
Maximize Losses: Selects the lots that generate the largest realized loss, often used for tax optimization.
Configuring Cost Basis in TRES
Cost basis can be calculated per organization or per wallet, depending on how you want transactions to be grouped.
Per Wallet
Each wallet maintains its own independent cost stack. Gains and losses are calculated separately for each wallet.
Per Organization
All identical assets across all wallets are combined into a single stack. FIFO or WAC is applied across the organization’s entire asset base, providing a consolidated view of cost and performance.
Tracking Cost Basis in TRES
Ledger View
From the Ledger tab, click any transaction to view its cost basis.
Look for the CB icon, which displays the calculated cost for each lot in the stack.
Asset View
From the Assets tab, select an asset and view its FIFO Cost Basis.
You can explore the entire organizational stack, see how each lot contributes to total cost, and click Wallet Breakdown to view holdings and fair market values by wallet.
Internal Transfers and Cost Basis
Per Asset Configuration
When assets move between wallets within the same organization, no gain or loss is recognized. The asset retains its original cost and order within the global stack.
Per Wallet Configuration
Intra-organizational transfers still do not trigger gains or losses. However, the transferred asset is removed from the sending wallet’s stack and inserted into the receiving wallet’s stack. The receiving wallet reorders its stack based on the selected accounting method, either FIFO or WAC.
Why It Matters
Cost basis methodology directly impacts realized gains, reported income, and audit accuracy. By automating these calculations, TRES ensures consistent valuation across every wallet and reporting period, reducing manual effort and minimizing reconciliation errors.
✅ With TRES, every cost basis calculation is traceable, auditable, and aligned with your accounting standards.