RFC: Chapter 8 Tutorial/Guide

[James Leone]

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>Capital improvements (e.g., a new driveway, or a new
>engine for your airplane, or renovating your warehouse) would go to a
>capital improvements account, with the resulting appreciation going to
>an appreciation (unrealized gains) account.
>  
>
Gor US GAAP (Generally Accepted Accounting Principles) we do _not_ 
record unrealized appreciation for any of the items mentioned above. We 
_only_ record that on  securities with a readily determinable fair 
market value.

When you pay for or acquire capital improvements, the offsetting entry 
for that event is a credit to cash. AKA you paid for the improvement 
with cash. I don't see how unrealized appreciation would fit into the 
above scenario at all.

But with that exception, I agree for the most part about what he says in 
his mesage.


>But for a tutorial, you probably want to make sure you stick to the GAAP. 
>
Agreed, but not just US GAAP methinks.

> You can find a copy at your local bookstore, probably.
>
The "official" US GAAP is written by the financial accounting standarrds 
board (FASB):

http://www.fasb.org/

Although when I was a college student at USC, we read them once in a while.

Cheers,


James Leone, CPA
Licensed in California, USA