[GNC] Is it reasonable to have sub-accounts under Equity:Fixed Assets?

[Adrien Monteleone]

Chris & Michael have both offered sound advice.

I'll add towards your question of individual item tracking, simply 
create sub-accounts under Assets:Fixed Assets for each one, and the 
parent Fixed Assets should be empty.

And no, they don't belong under Equity, they are Assets. The other side 
of those transactions goes to Equity. (and then to Expenses for later 
Depreciation as Chris noted)


Regards,
Adrien

On 1/16/23 6:29 AM, Dr. David Kirkby wrote:
> Apologies if this is too much an accounting question, but I'm stuck, and am
> trying to work out how GnuCash will handle this.
> 
> I'm trying to enter into GnuCash my company accounts for this financial
> year only - I'm not going to bother trying to enter every transaction since
> the company started. So the opening balances should reflect the company's
> financial position on 28/2/2022, and transactions from 1/3/22 being
> recorded.
> 
> I have the account
> 
> Assets:Fixed Assets
> 
> All that contains is test equipment and computer equipment, all of which
> will be depreciated - there's no land, or other things that don't
> depreciate.
> 
> I initially set Assets:Fixed Assets to have an opening balance of £x, as
> that's what my accountant told me the total of all thef fixed assets was
> worth. I see that is reflected in the account
> 
> Equity:Opening Balances
> 
> However, after I asked him, my accountant gave me a breakdown of the net
> value of the individual fixed assets, which have obviously depreciated over
> time.  I thought it would be useful to have their individual net values on
> 28/2/2022 recorded in GnuCash, so when I depreciate them next year, I can
> keep a track of the depreciation. (I also thought of depreciating them
> monthly, which I could probably do with the scheduled transactions, as my
> accountant is using linear depreciation).
> 
> That brings me to the problem that my initial entry for the opening
> balance of these fixed assets would be wrong, and should possibly set to
> zero.
> 
> Can I set that balance to zero, then delete the appropriate Equity:Opening
> Balances entry?
> Would it be sensible to have a sub-account under  Equity:Fixed Assets, or
> is that just not sensible?
> 
> Obviously by the very nature of a double-entry system, in order to debit
> the Fixed Assets, I need to credit somewhere else.