Yet Another Basic Accounting Question

Rob Brown-Bayliss on_the_net@clear.net.nz
27 Dec 2001 08:52:34 +1300


> As for revaluing, I don't think you account for it at all until your 
> house is sold.  At that time any increase (decrease) in value would be 
> profit (loss).  Having someone say that your house is worth $whatever is 
> not an accounting event.  The only reason to keep track of estimated 
> valuations is to have a better idea of current net worth or to borrow 
> against the asset.

The only real reason to value the house is simply that the bank wont
even talk to us about increasing the loan with out one (understandable).

The only reason to record it in gnucash is it make the Net assets
-$156,008.27 into a $24,991.73 :o)

Does this mean I am accounting for the whole thing incorrectly?  saying
the house is technically worthless until sold is a but hard on the soul
(I am building it myself, no hired help).

Should I debit the house account with the difference of the valuation
and the actual account balance, taking it from an income account?  (as
well as placing all the construction expense onto the account?

Then how should I account for the mortgage?  Does it become a credit to
the house(asset) account?  Then the principle payments debits?

Confused?  I am :o)



-- 

  Rob Brown-Bayliss
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