personal financing: how to record receiving of a gift (not fixed asset)

[Greg Troxel]

Zhang Weiwu <zhangweiwu at realss.com> writes:

> Stupid question: I received a gift from a friend, I know exactly how
> much it cost because I wished to buy it in first place. I wish to record
> this. This gift is not a fixed asset (Let's say if it's wine), so
> actually after I had it my net value didn't increase. I think, rather
> instead my expense should increase, thus I created a transaction from
> Income -> Gift account, to Spense -> Wine.
>
> Is this the correct way to do? Or should I make transaction from gift to
> assets and from assets to expense? I think that way doesn't make much sense.

I would say that no, it's not correct.

If you want to carry wine as an asset, valued at cost, and take an
expense when you drink it (or open a bottle), you can record the wine as
gift income balancing with a an increase in wine assets.

If you treat wine as outside your net worth (which is normal I think),
then it is not proper to record this transaction at all.

If you want to pretend that you got a cash gift and then bought wine,
you can record this as gift income, increasing cash, and then a wine
expense, decreasing cash, but this isn't what actually happened.


The real question is: what are you trying to accomplish?  If you want to
record gifts of objects not carried as assets, then by all means make a
list in a file.  But pretending that such objects are assets when
received as gifts but not when you buy them seems odd and unwarranted.