[GNC] Australian Initial Setup Q's

[David Cousens]

Your Home Inventory is presumably an detailing of your personal assets
recording their current or market value

. How you set them up wil to some extent depend on your purpose in doing so
and whether those assets are the subject of Capital Gains Tax or not. In
Australia your principle place or residence is not yet subject to capital
gains tax but other assets you own, investment properties, cars, boats may
be. In this case you need to preserve in your accounts some record of the
original cost of the asset, changes in its current/market value such that
its current value is recorded. Presumably most of these assets are long term
assets which you have no intention to sell within the current accounting
period so they would normally be recorded as subaccounts of Assets:Fixed
Assets. See https://www.gnucash.org/docs/v3/C/gnucash-guide/accts-oa12.html

One possible procedure is to create a placeholder subaccount for each asset
you wish to record. That placeholder sub-account would in turn have two
subaccounts which sum into the placeholder. Assuming the asset is a house
for example the placeholder account would be Assets:Fxed Assets:House. the
first subaccount could be named Assets:Fixed Assets:House:Cost Base. You
would use an initial transaction to record either the purchase of the asset
with an appropriate transfer of funds, creation of a liability for any loan
or if you already own the house outright use Equity:Opening Balances for the
transfer account in this initial transaction.

The second sub-account could be named Assets:Fixed
Assets:House:ChangesInMarketValue.  you would record increase or decreases
in the market valueof the house.  The second split/transfer account  for
such transactions would be another equity account
Equity:UnrealizedGainsOrLosses.

The account Assets:Fixed Assets:House being the sum of these, records the
current market value of the House asset. The transactions required on sale
area a final adjustment to bring the asset value to its actual market value
at sale before recording the transactions of the sale itself. A second
transaction (or additional splits in the sale transaction) records the
transfer of the value from the Equity:UnrealizedGainsOrLosses to either an
Income account which records taxable income if the item was subject to CGT
or untaxable income if it does not. E.g something like
Income:Taxable:CapitalGains if subject to CGT or
Income:Non-Taxable:CapitalGains if not.

A similar approach can be used for depreciation as discussed in
https://www.gnucash.org/docs/v3/C/gnucash-guide/chapter_dep.html

You would need to adjust account names to suit your particular purpose. The
above is not accounting advice per se merely an indication of an approach
which might meet your needs. If it is not clear and there are any taxation
and/or legal implications it would be advisable to seek advice from a
practising accountant in your area.

David Cousens




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David Cousens
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