commodity income/expense accounts?

[Edward Doolittle]

Also, the tax man probably takes the point of view that any income has a
"fair" monetary value that should be used to calculate his cut. For
example, in Canada and probably in most other jurisdictions (if I
understand correctly) even services bartered in lieu of cash payments
(e.g., dentist looks at accountant's teeth for in exchange for accounting
services (presumably not at the same time)) are taxable income.

So it would probably be wise to have a justifiable cash equivalent for any
income entered into the system. Having an estimate at the earliest possible
date (i.e., when the transaction is entered into GnuCash) might save a
scramble later on.

A similar situation would arise with many expenses as well ... if I donate
equities to my favourite charity instead of cash, I would have trouble
deducting the expense from my income unless I had a justifiable, up-to-date
price for the equities.

I'm not sure whether there was a conscious decision to enforce the
requirement for a cash value in GnuCash income and expense accounts, but I
think there is an argument for doing so. Perhaps also in the case of
liability accounts, if you think of liabilities as financial claims on your
assets ... if I borrow anything (money, an art work, a rare stamp, a
marble, whatever) and don't return it the claim will almost certainly be
settled in currency. So it may also make sense for liability accounts to be
in currency.

Asset accounts, on the other hand, could probably benefit from using
non-currency commodities. To use an example in Peter Selinger's tutorial, I
don't hold the value of my house as an asset, I hold the house as an asset,
so I would like to be able to list "123 Rodeo Drive" (not my real address)
as a commodity, of which I own 1 unit, in a sub-account of my fixed assets
account.

In the olden days (i.e., as recently as five minutes ago), the "cost
principle" in accounting would require that I enter the purchase value of
fixed assets into my book and leave it alone until I sold the asset. That
doesn't work well for me in terms of financial planning, however. One
alternative is to book income (or expense) when the price of the house
changes in my estimation, but that is really messy. E.g., if I own a rental
property and need to account for capital gains, I would need to do so all
at once when the property is sold rather than in bits and pieces as the
real estate market fluctuates. The better way is to hold the house as a
commodity and to use trading accounts to keep track of the unrealized gain
or loss, which would simply become a realized gain or loss when the
property is sold. So I would be in favour of allowing non-currency
commodities for asset accounts other than stock and mutual fund accounts.

E

On 22 January 2015 at 14:56, Wm <wm+gnc at tarrcity.demon.co.uk> wrote:

> Mon, 12 Jan 2015 13:47:54 <21684.5850.38142.231186 at perdition.linnaean.org>
> Daniel Hagerty <hag at linnaean.org>
>
>     gnucash insists that only stock and mutual fund accounts are able
>> to use non-currency commodities as the account commodity.
>>
>>    Is there any reason for this?  I've certainly received income in
>> commodity form.
>>
>
> Sure, but gnc takes the view that they have some monetary value, if you
> don't know take a best guess, it is all you could do from an accounting POV
> after all and you can change it if you get a firm figure a week later.
>
> Trading accounts may (or may not) make things clearer.
>
>
>     It seemed easy to change; the patch below seemed to work.
>>
>> commit 6dd27dd50fac7269f9208622de0c0ba3893a6c74
>> Author: Daniel Hagerty <hag at linnaean.org>
>> Date:   Sun Dec 28 11:18:37 2014 -0500
>>
>>    Allow all commodities for non-stock/mf accts
>>
>
> ummm, this was posted to
>
>  gnucash-user mailing list
>> gnucash-user at gnucash.org
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>>
>
> you'll need
>   gnucash-devel at gnucash.org
> for that.
>
> --
> Wm...
>
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-- 
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2

« Toutes les fois que je donne une place vacante, je fais cent mécontents
et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI