gnucash question plz

[kr]

>> 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. 
>> 

There is likely no one or any correct answer to your question but here are
some random thoughts (in no particular order):

-Most B/S's record asset values at their historical cost, and informed
readers know this. Your lender will ask for an independent evaluation. You
should provide a separate value yourself.
-Unless you bought your house in the last hour its value on the B/S,
separate from the array, is not its real market (resale) value. Why stop
with the array? Should you not also update the value of your house, your
car, your ....? Problem is the updated values will reflect your opinion of
their value and what lender would accept that? You could hire a professional
evaluator but at what cost?
-If you bought the array for $3K what is its actual market value. A market
for a good is made through buying and selling so maybe its true market value
is $3k

If you still want to increase the value on your B/S you will need an off
setting credit such as to:
 -an unrealized capital gains account on the B/S
 -any income account (likely our worst choice)
 -direct change to equity/retained earnings 

I suggest none of the above.

ps. Same goes for the shed. Its value on your B/S is the cost of material
unless you pay yourself which brings up income tax issues.

Ken



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