[GNC] Asset accounts: cost, or value?

[Michael or Penny Novack]

On 9/3/2020 7:14 PM, David Cousens wrote:
> Marcus
>
> As a number have people have pointed out you may need to keep the cost basis
> of your house separate from any adjustments for the estimate of the current
> value you may apply to calculate your estimated current net worth. You can
> have your cake and eat it too in this case.

The purpose of accounting is to be able to supply information.

There are certain conditions where it might be important/useful to have 
information that would NOT be provided by your standard set of books. Or 
provided only with greatest difficulty (and still have the books useful 
for normal purposes).

The solution is multiple sets of books, your "real" set of books (you'll 
need for taxes, etc.) and then one or more "virtual" sets of books that 
provide information on different basis. I have given in the past as an 
example the books I keep for our solar system as if it were a separate 
entity that "borrowed" money from us as its capital and was paying off 
that loan by the virtual transfers that exist between it and us.

But real estate might be another example. It might be a major financial 
activity intended to build net worth, buying a residence, fixing it up, 
selling it and then getting another more valuable, repeat. (this is 
taking advantage of the special tax rules applied to gains from primary 
residence) You might want something that tracked your progress toward 
that wealth building goal. It  might be a similar situation if a large 
percentage of net worth was in things that had significant  conditional 
components.

What I am saying is don't try to do these things within your 
main/regular books but that doing them outside of those books does NOT 
mean has to be done outside of gnucash.

Michael D Novack