[GNC] Consolidation of family member accounts

Michael or Penny Novack stepbystepfarm at comcast.net
Sun Aug 13 17:23:09 EDT 2023


On 8/13/2023 1:45 PM, Paras Desai wrote:
> Thanks for your reply
>
> The question arises because;
>
> My wife and I maintain separate accounts. She has her own income and tax filing. So we need to maintain accounts independent of each other.
>
> But at the same time, we wish to maintain family level account which generally gives us idea about....
>
> Total Family income, total family expense and total family investment.
>
> This is the same scenario as two independent legal companies wherein one is a parent company and another is subsidiary company. Both legal entity has to maintain their own accounts/ books for their respective tax filing and legal compliances but have to report consolidated financial statement at group level.
>
> Hope I am able to explain the scenario unambiguously
>
> Thanking you
>
> Paras

Yes, understood now. The simplest solution is to have three separate books.

Notice that EACH of these will have a total income, total expense, total 
investment, and total net worth. Surely it would not be difficult to 
simply add triplets to get family totals. If you don;t want to use pen 
and paper, could be a spreadsheet . As for the issue of this duplicating 
the amount of expenses (eg: once when you transfer to wife and again 
when she expends it) this is a matter of how you enter the transfer. 
When you make the transfer, do a "journal transaction". Debit your 
equity instead of an expense (temporary account of fundamental type 
equity). Then the amount transferred will not  falsely duplicate expense 
but will correctly affect your net worth. She would do the same in 
reverse, not enter as income but directly to equity.

Michael D Novack




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