"One more quick question, does anyone else track assets as
commodities? Like, say my house value, or the value of my cars. e.g. I
have one civic and its current value is about $12,000."
The 'proper' accounting ways to do this (IFRS, GAAP) account for all
of this, but the examples you give are different.
- The car is an asset to depreciates. Each accounting period (e.g., a
year), you book the depreciation to a special account like
'Expenses:Depreciation:Car' like this, assuming a linear 10-year
depreciation with 0 remaining value (you'd depreciate faster according
to accounting rules in most countries, but for personal use 10 years
may be ok if you think you'll it for that long. Note that you can use
various depreciation methods, depending on what asset you're
depreciating). Also note that this first entry does not alter your
total net worth, it's simply booking between two balance sheet
accounts.
* 2010/01/01 Car bought
Assets:Car USD 1000
Assets:Cash
* 2011/01/01 Depreciation car
Expenses:Depreciation:Car 100
Assets:Car
... etc, 10 times. Typically when you sell your car at the end, that
money is booked as 'Exceptional proceeds' or something.
- Real estate is typically accounted for on a historic cost basis,
meaning you don't adjust your assets upwards when it appreciates. This
creates a 'hidden reserve', meaning off-balance sheet assets. If you
don't want that, you'd book an appreciation each time to you do a
revaluation (can be once per reporting period or more or less).
* 2010/01/01 Appreciation house
Assets:House USD 10000
Income:Appreciation:House
So, in my opinion the answer to 'should I track fixed assets as
commodities' is 'no'. Only do that for liquid and semi-liquid assets
like cash in foreign currencies, bonds or stock. (Actually I think it
shouldn't be done at all, and be accounted for on historic cost basis,
but I accept that some people will want to valuate their assets at
fair market value rather than historic cost.)
"does anyone else here keep envelope style budgets with ledger?"
How you do this according to accounting standards is by building up reserves.
* 2010/01/01
Liabilities:Reserves:Car replacement USD 1000
Assets:Reserves:Car
This several times, each time you add to the reserve (in this example, 5).
Then when you buy the car:
* 2010/09/01 Bought car
Assets:Car USD 5000
Assets:Bank
*2010/09/01 Empty reserve
Assets:Reserves:Car USD 5000
Liabilities:Reserves:Car replacement
cheers,
roel
On Tue, Nov 9, 2010 at 4:43 PM, Michael Farnbach <[email protected]> wrote:
>
>
> On Tue, Nov 9, 2010 at 7:41 AM, John Wiegley <[email protected]> wrote:
>>
>> On Nov 9, 2010, at 12:24 AM, Michael Farnbach wrote:
>>
>> > I think I'll leave them commented out for now. It seems like a natural
>> > way to account for gasoline as simply something that I expend. While money
>> > isn't created or destroyed, the gas leaves my car in many different forms
>> > to
>> > add to the great ledger of the universe like any other expense.
>>
>> Why not just stick with the Gas expense, then? My "Dining" expense
>> account infinitely grows, but that's not a problem since I don't look at in
>> balance reports -- unless they are time bounded.
>>
>> John
>
> Yes! Exactly.
> Actually, the only reason I thought there was a problem was that I was
> getting an error that it couldn't figure out the cost of the gas when doing
> register reports. The value of the gas should be zero (I can't redeem it for
> any money) and even after I told it to ignore the value of the gas the error
> remained.
> It seems to work now, for reasons I'm not totally aware. But then again I am
> just learning this.
> One more quick question, does anyone else track assets as commodities? Like,
> say my house value, or the value of my cars. e.g. I have one civic and its
> current value is about $12,000.
> Okay, one more quick question after than. There is a program called "YNAB"
> that I like that does budgeting. The reason I like it is that it does
> envelope style budgeting, virtual envelopes that you stack money in to pay
> expenses with. Instead of it being a goal, it is like an account, and you
> can accumulate (save) for larger expenses or move the money to another
> budget.
> I like Ledger because you can do that too with virtual accounts and
> automated transactions, for instance every pay check 5% (or $150) goes to
> grocery budget account, and then I deduct from it whenever there is a
> payment to the Expenses:Food:Grocery account. I know ledger does budgets in
> another way, but does anyone else here keep envelope style budgets with
> ledger?
> My metric for how elegant a piece of software is comes from its ability to
> handle principles so well I feel smarter about a subject for just learning
> the software, but it gives me the freedom to do it the way I want to. Ledger
> seems like that kind of software, but I can also be nervous that I'm abusing
> the system sometimes :)
> Thanks again everyone.
