How to track depreciation?
marc at osmium.mv.net
marc at osmium.mv.net
Fri Sep 30 09:28:25 EDT 2005
Hello Derek -
Thanks for the follow up. What you say makes sense to me, with one
curiosity. The "Income:Auto Sale" bothers me, to some extent, in that I
don't personally believe that any "Income" occured. It is really an asset
transfer from a physical asset to a cash asset, isn't it? So to that end,
the split would be between Equity and Assets, correct?
Thanks in advance - Marc
On Fri, 30 Sep 2005, Derek Atkins wrote:
> If you're not a business then technically you can't depreciate the
> car. When you sell the car, you create a split transaction. In
> the asset you reduce by the full (original) value of the car, then
> the sale value goes into Income:Auto Sale, and then rest goes into
> Equity:Capital Depreciation. I don't think you can count is as a
> capital loss.
>
> Maybe an accountant will chime in?
>
> -derek
>
> marc at osmium.mv.net writes:
>
>> Hello -
>>
>> I own a car, which when I purchased it, I transferred the monies used to
>> pay for it from my checking account to an asset account "car". Several
>> years have past, and now it is time to sell the car. The amount I will
>> receive for the car will be significantly less than what I paid. My
>> questions are:
>>
>> 1) Should I have been tracking depreciation on some regular basis over
>> the past years, to properly reflect its current value in net-worth
>> statements? If so, how is that done?
>>
>> 2) Now that the car will be sold, how should I account for the money that
>> I receive (I presume it isn't income), and how do I account for the
>> difference of sold-value versus asset value on the books?
>>
>> I presume that the above questions are general, in that they are true for
>> all assets that are tracked and/or later sold (at profit or loss).
>
> --
> Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
> Member, MIT Student Information Processing Board (SIPB)
> URL: http://web.mit.edu/warlord/ PP-ASEL-IA N1NWH
> warlord at MIT.EDU PGP key available
>
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