Please check : Unrealized gain samples

[Bengt Thuree]

Hi

Would appreciate if someone could just verify my small transactions below.
Bought Degas for $100,000
Estimated it is currently worth $130,000, and we sold it...
How to record the actuall value...

/Bengt


 2. Under estimation of unrealized gain.

    You were over-optimistic about the value of the painting. Instead of the
    $130000 you thought the painting was worth are only offered $120000. But
    you still decide to sell, because you value $120000 more than you
value the
    painting. The numbers change a little bit, but not too dramatically.

    The transactions should now appear as follows (observe the last
transaction
    which balances the Unrealized Gains accounts):

    Table 9.2. Turning an Accrued Gain into a Realized Gain

>From                     To                      Amount    Remaining
Income:Unrealized        Income:Realized         $20,000   $10,000
Assets:Degas:Cost        Assets:Bank             $100,000  $0
Assets:Degas:Unrealized  Assets:Bank             $20,000   $10,000
Assets:Degas:Unrealized  Income:Unrealized       $10,000   $0


    This leaves the "Asset:Fixed Assets:Savings Account" account with a total
    of $120000 and "Income:Realized Gains" with a total of $20000.

 3. Over estimation of unrealized gain.

    You manage to sell your painting for more than you thought in your
wildest
    dreams ($150,000). The extra value is, again, recorded as a gain, i.e. an
    income.

    The transactions should now appear as follows (observe the last
transaction
    which balances the Unrealized Gains accounts):

    Table 9.3. Turning an Accrued Gain into a Realized Gain

>From                     To                      Amount    Remaining
Income:Unrealized        Income:Realized         $50,000   ($20,000)
Assets:Degas:Cost        Assets:Bank             $100,000  $0
Assets:Degas:Unrealized  Assets:Bank             $50,000   ($20,000)
Income:Unrealized        Assets:Degas:Unrealized $20,000   $0

    This leaves the "Asset:Fixed Assets:Savings Account" account with a total
    of $150,000 and "Income:Realized Gains" with a total of $50,000.


-- 
Bengt Thuree   bengt at thuree.com