I don't use price to track depreciation of fixed assets. At the end of an
accounting period (e.g. annually), I insert an adjusting entry to recognize
the depreciation as an expense. There are several methods for figuring out
the depreciation amount for a period, but straight-line depreciation is
*(Purchase
Cost - Salvage Value) / Useful Life*. Salvage value is the amount you
expect to recoup when you dispose of the asset, which can be 0 if you plan
to use the asset until it's worthless, or an estimate of a fair value to
get for selling it. For a business, the accounting principles for your
locale will dictate rules on salvage value and useful life. But for
personal accounting (where, at least in the U.S., you cannot use
depreciation for personal assets), you can use whatever you want for those
values. The transactions would look like:
2020-01-01 * "Car" "Purchase"
Assets:Bank:MyBank -20,000 EUR
Assets:Equipment:Vehicles 1 CAR.MAKEMODEL {20,000 EUR}
2020-12-31 * "Car" "Depreciation Expense"
Assets:Equipment:Vehicles
Expenses:AccumulatedDepreciation 2,000 EUR
2021-12-31 * "Car" "Depreciation Expense"
Assets:Equipment:Vehicles
Expenses:AccumulatedDepreciation 2,000 EUR
Note that this will store multiple commodities in
the Assets:Equipment:Vehicles – you still have 1 CAR.MAKEMODEL, in addition
to a contra-asset in EUR representing the depreciated value. Upon the sale
(or other disposition) of the asset, you would debit the fixed asset
(CAR.MAKEMODEL) and credit the entire amount of accumulated depreciation.
That balances against the profit/loss of the sale of the car. E.g., sell
the car 2 years later at 18,000 EUR for a profit of 2,000 EUR:
2022-01-01 * "Car" "Sale"
Assets:Equipment:Vehicles -1 CAR.MAKEMODEL {20,000 EUR} @ 18,000 EUR
Assets:Equipment:Vehicles 4,000 EUR
Assets:Bank:MyBank 18,000 EUR
Income:Equipment:Vehicles:PnL -2,000 EUR
I think this is preferable to using price directives, because the price of
the car is actually the fair-market value for what you could get if you
were to sell it at a point in time. The price could be less or greater than
current depreciated value based on your useful life estimate.
- Robert
On Friday, February 10, 2023 at 8:32:28 AM UTC-5 [email protected] wrote:
> Dear all,
>
> I don't think there was a discussion like this.
>
> I want to figure out how to track capital investments I can't treat this
> like just expenses, as if I have today purchased a car for 20000 EURO my
> net worth is immediately lower tomorrow by 20000 EURO, which is totally
> different from say going for vacation for 20000 EUR
>
> This is how I plan to track capital investments:
>
>
>
> I plan to track by creating a commodity MYCAR and placing 1 item of it the
> Assets:Capital account
>
> 2020-01-01 commodity MYCAR
> name: "Ford Focus XXXXXXX"
> assets-class: "car"
>
> 2020-01-01 * "Buying car"
> Assets:Bank:Payment -20000 EUR
> Assets:Capital 1 MYCAR @@ -20000 EUR
>
> And then in prices table I will show the depreciation of the value of the
> car
>
> 2020-01-01 price MYCAR 20000 EUR
> 2021-01-01 price MYCAR 18000 EUR
> 2022-01-01 price MYCAR 16000 EUR
>
> Later I can use the unrealized gains plugin (which I still need to figure
> out how to use) to show depreciation of the value of the car as an
> unrealized cost
>
> Any feedback?
>
>
>
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