Unrealized/Realized Gains and Losses

Jeb Bateman jeb@ocha.net
Fri, 3 Aug 2001 12:18:56 -0700


On Thu, Aug 02, 2001 at 10:51:49PM -0500, Bill Gribble wrote:
> On Thu, Aug 02, 2001 at 07:36:01PM -0500, Linas Vepstas wrote:
> > [snip]
> What we're talking about is whether Gnucash needs a new account type
> to deal with unrealized gains/losses.  It doesn't.

FWIW, I thought the point Linas made earlier about it being okay to
keep two sets of books -- one that gives you important business or
personal budgeting information, and one that makes it easy to fill out
tax forms -- was important.  Also, the accountants here said that it's
NOT generally okay to 'book' expenses until they are 'realized' which
seems to contradict Bill's assertion that you simply record entries in
an expense account for depreciation.

Not only that, but doing so creates a view of your assets that is
biased toward the "doing your taxes" goal of accounting, since the
depreciated value of an asset might be nothing like the actual market
value, which is important for net worth calculations, etc...

The solution I thought of was that each transaction actually could use
2 categories attached to it (an account for one's own record keeping,
and an optional piece of data for the line it affects on IRS forms).

I have always thought of my accounting records as a tool for planning
and tracking my finances.  However, this has made it a nightmare at
tax time to get the right numbers for IRS line items out of Quicken,
(which I gave up on using after years of data became unmanageable).  My
assumption at the time I stopped using Quicken was that free software
would save me and provide the flexibility to create a more reasonable
system, and I would install and start using GnuCash before too long.

It hasn't happened yet...

I use Debian at home on a G3 Power Mac, and haven't configured X yet.
At the office, I have my keyboard and monitor plugged in to an old 486
with a 250Mb hard drive running Debian (and up for over 400 days).
The first time I tried to install GnuCash, I used apt-get install
gnucash, and was dissapointed that it didn't run when I typed gnucash
at a virtual console.  I wanted an accounting program that would work
on any old system in text mode, as reliably as mutt, lynx, emacs, etc.

Recently, I have been trying to get 1.6.x installed on a new SuSE 7.1
-> 7.2 system I setup on my girlfriend's computer.  No joy yet,
although I have been following the recent discussions about that, and
hope to get the libgtkhtml.so.13 issue solved the next time I try it.
BUT that doesn't give me any confidence in the program, since I'm sure
it will break the next time something is upgraded on the system, and
I'll have to go through a period of accounting downtime while solving
new dependency problems.  So, I'm thinking a better use of my time at
this point would be to setup sql-ledger, which should work with lynx.


> Are the reports substandard? yes.  Do they need to deal with various
> kinds of basis computations, including FIFO and designated lot sale?
> yes.  Do they need to compute long and short term capital gain?  yes.
> I don't believe I ever said any different.

I think the issue is to figure out if the current data model contains
enough information to generate useful reports for all purposes.  (Ie.
Personal planning vs tax preparation... for example.)  My guess based
on what I have heard is that it doesn't.


> I wish you would stick to the technical discussion and quit calling me
> names.  I'm not interested in that kind of argument.

I wish you guys would create a friendly fork or something(maybe even
in the same CVS tree), and each work on making something useful for
your own needs.  That would increase innovation, while decreasing the
amount of jousting and debating trivial things.  In addition, the GPL
guarantees that you can incorporate useful changes from each other's
code base, which means that you are actually still working together,
although separately by choice ;-)

Alright, that's just about enough out of me!  I should probably keep
my nose in my own business, and start setting up sql-ledger so I can
get some accounting done before the 4 month tax extension runs out...

Regards,
-jeb

-- 
Jeb Bateman...
http://jeb.ocha.net