Setting up loans

[Dale Alspach]

Jason is correct that it is income, but it is unrealized income. I would
set aside a special account for this type of income since it is paper only.
What you may want to do is make a subaccount of the house asset which is
for fluctuation in value. This only makes sense if you are regularly
adjusting the value. Each time the value is changed debit or credit the
subaccount and credit or debit the unrealized gain/loss account.
In the US appreciation/depreciation 
does not usually become real for an individual until there is a
taxable event such as a sale of the property. Companies on the other hand
will often show part of this gain or loss on an annual or quarterly statement.
Generally this is done when the loss or gain appears to
be a fairly permanent situation or there is some tax consequence.
I believe that exactly how and when this is done is part of the recent
accounting controversy.

Dale Alspach