As I see it, and have always understood it:-
Accumulation units include dividend cash which is used to reinvest in further shares - that's why they are called accumulation units. The number of units does not alter unless new cash is put into to create more units, or unless cash is withdrawn to surrender units. Note: cash held on account, including new cash or dividend income will presumable be used to buy more shares eventually, ideally, but not necessarily, immediately. Buying shares with this cash held on account does not alter the number of units. A plot of unit prices would be useful for comparison with any other instrument on a TR basis
Income units in my case, exclude dividends - these are assumed to be "paid away" and do not affect the income unit price or the number of units. If new shares are bought or sold, the number of units will vary accordingly but not the unit price (until the shares market price alters). Income units are equivalent to the share price of any instrument on a non-TR basis, such as a normal share price. (or NAV chart for ITs, which excludes the premium and discount element).
Income or Acc prices are easily found at any time by using HYPTUSS (a press of one button will do it) and knowing the number of units in circulation. Acc prices need the HYPTUSS derived value plus any cash held on account. In the case of income units, there is no requirement to hold cash in the account so knowing the HYPTUSS value and number of units give the unit price immediately.
However, some people choose to hold dividend cash in the account towards future purposes, and in this case each dividend (or pooled dividends over some period of time for convenience) should be used to create more units as one would with new cash.
Personally, as mentioned, I prefer to assume dividends are paid away and not held as additional income units. This is cleaner and easier to operate, and seems to reflect the name "income unit", as it provides an income to the holder.
This description of the two types is consistent with the notes given within the notes here:
http://lemonfoolfinancialsoftware.weebl ... folio.htmlAs regards the treatment of dividends, I quote from that link:
For accumulation units:
If dividends are kept within the portfolio, and either immediately or at a later point reinvested in shares, there is no change in the number of units. All that happens is that the value of the portfolio increases, therefore the price of each unit increases a little.
For income units:
The basic principle is the same as that used to calculate accumulation unit numbers and values. But in addition to this, a calculation is needed whenever the portfolio receives income (usually dividends) but only if they are retained within the portfolio. If income is withdrawn, (e.g. to live on!) then neither the number or price of units change.
However if the income is retained within the portfolio, then this income "buys" additional units, (in contrast to accumulation units, where it simply increases the price of the units already owned).
As regards the original question about timing, I do not believe this is a significant difficulty - particularly with income units if the income is treated as paid away.
Arb.