Accounting Question: Handling Reimbursements

[Robert Ramsdell]

On Sat, 2006-12-30 at 11:52 -0800, David T. wrote:

> Assets: Income 

Shouldn't this be Income:Salary?  Then money flows from this into FSA
and Checking.


> 
> The problem here is that, from a tax-accounting perspective, the
credit should
> first be applied to Expenses: Medical so that the Year-End amount
reflects my
> actual out-of-pocket medical expenses, and my tax returns are
accurate. I am
> sure there is a simple fix for this, but I can't for the life of me
figure out
> how I can get the one FSA payment to simultaneously increase my
checking
> account and decrease my expense account balances. 

You can't.  You are out of pocket for the medical expenses regardless.
The FSA is just you reimbursing yourself.

I suppose you could create a new expense account medical-reimbursed, and
each time you have a flex reimbursement add to the split an equivalent
transfer from expenses:medical to expenses:medical-reimbursed.  Then at
the end of the year expenses:medical-reimbursed will be equal to the
flex sum, while expenses:medical is equal to the balance.

> 
> BTW, my wife tells me just to subtract the FSA total from the Medical
total at
> the end of the year and use that on the tax forms, which will work,
but is
> nowhere near what I imagine GAAP requires...

This is what I do.  But I don't aspire to complying with GAAP.

Robert