On Friday, June 21, 2024 at 5:53:35 PM UTC+2 [email protected] wrote:
If you don't want to see the deficit reflected in your net worth, I'm warming to the Assets:Receivable idea. You are reasonably expected to receive the funds, as much as your Liabilities are expected to receive back from you. It just seems weird to not send money to Expenses when you're buying (replacement) things/services. I think you method is what is call a* cashflow - based accounting* and my method is what is *called an accrual accounting * https://www.youtube.com/watch?v=eApsfjccm7s In my experience it is OK to use a *cashflow - based accounting* for small expenses, which kind of stay on the noise level. But if you use a *cashflow - based accounting *for significant but irregular transactions (e.g. big tax return from the last year, expected big tax to be paid for this year, lending or borrowing a large amount of money), then your net worth starts fluctuating to the level, that you just don't understand what is going on any longer and also can't compare similar periods of different years. But the beauty of a double entry system is that you can remove all this noise and see the true picture by using accrual accounting. -- You received this message because you are subscribed to the Google Groups "Beancount" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To view this discussion on the web visit https://groups.google.com/d/msgid/beancount/e88d1422-eb1f-4208-8183-8acb9fda4ff1n%40googlegroups.com.
