[GNC] How to record "investment" in gnucash ?

[Adrien Monteleone]

Specifically to your example:

> On Apr 7, 2020 w15d98, at 4:43 AM, Long <Phamhoanglongvn at outlook.com> wrote:
> 
> Hello,
> 
> First, i'm not accounting, and i don't know what i did is wrong or right. So
> please help me.
> -------------------------------------------------------------------------------
> /Example : this example is just assumed./
> - Jan : I bought a kg* "gold" *cost me *100$*.
> - Feb : My *"gold"* are decreasing from *100$* to *90$*.
> - Mar : My *"gold"* are increasing from *90$* to *120$*. And i want to sell
> it.
> -------------------------------------------------------------------------------


> /With that example, i will record it into gnucash by :/
> - Jan : I transfer *100$* from "*Assets:bank*" to "*Assets:Investment:gold*"

Correct, the transaction would look like:

Dr. Assets:Investment:gold	100
  Cr. Assets:bank			100


> - Feb : I transfer *10$* from "*Assets:Investment:gold*" to "*Equity*"

> - Mar : I transfer *30$* from "*Equity*" to "*Assets:Investment:gold*"

Nope. You don’t enter anything for these. These values are estimates (*if you would sell at that time*), not real yet because you haven’t sold it.

*VERY IMPORTANT* - some laws require you to ‘mark to market’ certain assets. In that case, you *would* record this fluctuation. But that is generally not the case, and even then, only for certain business entities and then, only for certain types of investments/assets, and then, only at certain points of the year. If this is just for your own personal info, I outlined a better method in my other reply.


> - *When i sell it* : i transfer *120$* from "*Assets:Investment:gold*" to
> "*Assets:bank*"

Partly correct. The value in the gold account hasn’t changed before the sale. The actual transaction will look something like:

Dr. Assets:bank			120
  Cr. Assets:Investment:gold		100
  Cr. Income:Capital Gain/Loss		 20


> -------------------------------------------------------------------------------
> /For more information about *Gain and Lost* : /
> - If *Gain*, i transfer that *Money* from "*Income:Investment:gold*" to
> "*Equity*"

> - If *Lost*, i transfer that *Money* from "*Equity*" to
> "*Expense:Investment:gold*"

Only as a result of the sale transaction. There might be tax implications for that gain/loss. Your method avoids proper recording.

(Income accounts are technically temporary Equity accounts, so it doesn’t matter where you put them exactly as long as you are consistent and know what they are for. In GnuCash, Income accounts are set up to be outside of the Equity tree, so unless you have a really good reason for doing otherwise, like a legal requirement, I’d keep them separate)

Regards,
Adrien