Question about Assets as reported vs account balance

[David T.]

--- On Thu, 1/6/11, Jay Ridgley <jridgley2 at austin.rr.com> wrote:

> From: Jay Ridgley <jridgley2 at austin.rr.com>
> Subject: Re: Question about Assets as reported vs account balance
> To: "Derek Atkins" <warlord at MIT.EDU>
> Cc: gnucash-user at gnucash.org
> Date: Thursday, January 6, 2011, 3:53 PM
> Derek Atkins wrote:
> > Jay Ridgley <jridgley2 at austin.rr.com>
> writes:
> > 
> >> Folks,
> >> 
> >> Can someone explain to me why the Account for
> assets shows about
> >> $60,000 more that that shown on a Balance Report?
> As far as I can tell
> >> the difference is unrealized gains, however,
> should that not show on
> >> the Balance report and be included in the Asset
> total?
> >> 
> >> The Balance Report is not out of balance. Just the
> accounts...
> >> 
> >> Is there an account for Unrealized Gains???
> > 
> > No, because Unrealized Gains don't actually
> exist.  They are due to
> > changes in the price of an asset, but you still own
> the asset the gain
> > is unrealized.  You only realize the gain when
> you actually sell the
> > asset, and only then do you put the gain into your
> books.
> > 
> >> Cheers,
> >> Jay
> > 
> > -derek
> > 
> Derek,
> 
> Can you explain, why in the Account as shown from the
> gnu-data file the amount is some 50,000.00 MORE than that
> shown on the Balance Sheet report? This is true even though
> I have run a Close transaction.

I am not certain about why your balance is off, but I thought I saw somewhere in this thread that you had (or intended to) create a transaction to "balance" your account value from the basis figure to "current value." If you did this, then your balance sheet will be off, for the reason that Derek noted: for accounting purposes, the value of your asset *is* the cost basis, until you actually sell the asset.

> 
> If I remember my Accounting 101 course correctly the two
> amounts SHOULD be equal. it is like taking some of the
> assets I posses and hide them from prying eyes, even though
> those eyes are MINE!
> 
> What am I missing here, why is the asset shown on the
> Balance report as the Basis value and NOT the Current
> value?

See above.


Cheers,
David

> 
> Regards,
> Jay
> 
> -- 
> 
> Jay Ridgley
> jridgley2 at austin.rr.com
> Registered Linux User ID - 9115
> Registered Ubuntu User ID - 23320
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