Subaccounts [WAS Re: Future allocated money vs Budgets]

[Matt Graham]

:-) you missed one of the previous posts. Using Liability accounts that way is adding anoter "layer" of accounting to your system. When you look at what liabilities really are, Adrien and I concluded on this thread that this situation (segmenting money for future) is really using a separate asset account. After all - creating a liability INCREASES your cash available. However, shifting it to another asset account (either sub-account or completely different area) reduces cash available AND allows you to record the increasing amount you have segmented. If I get a chance, I think I'll type all this up with some examples (it is easier to show with exampes).

Thanks and regards,
Matt
-------- Original message --------
From: Mike or Penny Novack <stepbystepfarm at dialup4less.com>
Date: 29/1/18 00:51 (GMT+10:00)
To: gnucash-user at gnucash.org
Subject: Re: Subaccounts [WAS Re: Future allocated money vs Budgets]

On 1/27/2018 10:25 PM, Matt Graham wrote:
> Nice! It seems like we are getting somewhere. I am convinced that the process we think of budgeting where we are saving up for something is really a case of segmenting money within a sub-account. And it looks like Gnucash is already happy with this kind of situation - with the include sub-accounts in the recociliation window.
Not exactly. This is a case where the term "budgeting" is being used in
different ways meaning different things. Budgets my be legal
(organizations, government entities) or advisory (personal, business)
though of course businesses might have requirements to set aside funds
<< might be in the terms of a loan, etc. >>

ONE way of doing this is with liability accounts (typical -- account for
amounts needed for taxes) but that method can also be used for "reserve
funds" <<  I deal mainly with non-profits where "restricted funds" are
common >>

Note that partitioning of a checking account in this way earlier
described is still just "advisory" as it would NOT prevent you from
writing a check for more than the balance remaining in the unrestricted
portion of the account. Just you can't do that without seeing that you
are doing it.

Michael D Novack


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