On Friday, June 21, 2024 at 9:58:24 PM UTC+2 [email protected] wrote:
Ah, so Accrual focuses on flow of intrinsic value? The *intent* is that
there's ultimately no net out-of-pocket/expense so there shouldn't be any
deficit/expense on paper. I like that. I'm convinced on
*Assets:AccountsReceivable:** instead of *Expenses:** for cash-out and
cash-in legs of claim. Especially for big claims, probably routine medical
claims. Maybe not 1-2% cash back on credit cards... I'll have to look at
remodeling some of my own slush accounts.
I think you got it. The main idea of the accrual accounting is that both
expense and income are disconnected in time from cashflow. Presumably it
gives a better financial picture of your situation. There are tons of
regulations, documents, consultants and auditors who deal with this. Also
abuse if relatively easy, because you report on the thing which is
difficult to check, some "revenue", which you can't measure on your bank
account. This is not only with cost, but with revenue. Say you have
received a downpayment for the work you haven't done yet. Then in accrual
you would record it like:
2020-01-01 * "downpayment for the work not done yet "
Assets:Bank 1000 USD
Liabilities:Unrecognized-Revenue -1000 USD
2020-02-01 * "50% of work is done"
Income:Service -500 USD
Liabilities:Unrecognized-Revenue 500 USD
But as I said, even for personal finances it is very useful. I had a
situation, when I was making tax return declaration in 2020 for 2019, but
was receiving it in 2021 plus bunch of other delayed or sometimes advanced
transactions. You just cannot get your head around the changes to your net
worth in such situation, if you do not follow principles of 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/b2b0344a-edfd-4612-bed8-678b8cf5daa9n%40googlegroups.com.
