gnucash question plz

[John Ralls]

> On Mar 30, 2017, at 6:35 AM, Derek Atkins <warlord at mit.edu> wrote:
> 
> Hi,
> 
> GnuCash questions should be asked on the gnucash-user mailing list; you
> shouldn't email individuals directly.  I've forwarded your message
> there -- please make sure you reply back to the gnucash-user list.  You
> may need to subscribe to ensure you receive all replies.
> 
> Manolis Karamousadakis <polemidis at gmail.com> writes:
> 
>> Hello, I have a -maybe stupid- question but I cannot find the answer in the
>> web. I asked at the #gnucash IRC channel but I haven;t got an answer yet.
>> 
>> I would appreciate if you can help me clarify this!!! 
>> 
>> My undestanding is that when you buy an fixed asset with cash you debit your
>> Asset Cash account and credit  your Fixed Asset acount. 
> 
> No, you have it backwards.  When you buy a fixed asset you CREDIT your
> cash and DEBIT your Fixed Asset.
> 
>> But how do you property account when you buy something that was way too low
>> priced? For example I bought A solar array. I paid $3000. This array installed
>> adds $15000 value to my property. 
>> Now I want take a loan from a lender, and he wants to see my Assets value or
>> the Net Worth Statement. How I will represent this increase in my assets in
>> double accounting, as the increase in real assets does not much the decrease
>> in the payment. 
>> 
>> Same thing when I build some asset. Ps I buy the lumber, build a shed. The
>> costs of the materials are a lot less that the shed as unit.
>> 
>> Thank you for your time!
>> Plz if you cannot answer me that can you at least redirect me where to find
>> the answer????


The simplistic answer to your question is to create a "security" called "Solar Array" and an account containing 1 Solar Array which you bought for $3000. Next create a price for Solar Array of $15000. Use the "nearest in time" price source option (the default since 2.6.15) on the Net Worth Report and it will show what you want.

That probably won't get you the loan unless the lender isn't very smart. The new solar array is part of the house and is disposable only that way, so the lender will want to know how much he can get for the house, solar array and all, if you fail to repay the loan. That would require at least an estimate from a local realtor, but most lenders will require a professional appraisal.

Regards,
John Ralls