RFC: Chapter 8 Tutorial/Guide

[Jon Lapham]

Chris Lyttle wrote:
> On Fri, 2003-07-11 at 06:29, Jon Lapham wrote:
>>Something like this:
>>
>>-Assets           + $300
>>   -Computer       + $1500   <- the "asset cost" account
>>   -Computer depr  - $1200   <- the "accumulated depreciation" account
>>-Expenses
>>   -Depreciation   + $1200   <- the "depreciation expense" account
>>
>>For me, it seems that the "depreciation expense" account is always equal 
>>(but opposite sign) to the "accumulated depreciation" account... in this 
>>simple example anyway.
> 
> 
> Well that was my initial thinking, Matthew pointed out some obvious
> flaws in my reasoning :) The above seems to correctly allocate
> depreciation expense, but I'm not sure how to track the depreciation.
> 

Well, the depreciation is tracked in the "Assets:Computer depr" account 
in the above example.  Or, do you mean, that there is no way to see what 
the current value of the asset is without doing math by hand?

If this is what you mean, then what do you think of Perry's idea:

-Assets             + $300
   -Computer         + $300   <- current value of asset
     -Cost           + $1500  <- "asset cost" account
     -Depreciation   - $1200  <- "accumulated depreciation" account
-Expenses           + $1200
   -Depreciation     + $1200  <- "depreciation expense" account

It is one extra account you have to make (ugh), but it gives a total 
value to the asset.

PS: I'm still not sure why this is much different than my original 
proposal... I guess it is some accounting thing to separate everything 
into separate account.

-- 
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  Jon Lapham  <lapham at extracta.com.br>          Rio de Janeiro, Brasil
  Work: Extracta Moléculas Naturais SA     http://www.extracta.com.br/
  Web: http://www.jandr.org/
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