[GNC] Adding ASSETS & LIABILITIES to sub accounts

[Jim DeLaHunt]

Luis:

Welcome to GnuCash! You ask a good question.

On 2024-05-30 01:31, Luis Sini wrote:
> TL;DR
> +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
> I would like to add "ASSETS" and "LIABILITIES" account types as
> sub-accounts but GnuCash only allows it if they are "Top Level Accounts"
> +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
> Hello to everyone,
> I make money personally, I own a couple of properties, and I also design
> and manufacture audio devices. These are basically different entities, and
> I know that I can create a separate GnuCash file for each one of those
> ventures. But, I wanted to create 1 GnuCash file that will allow me to have
> a comprehensive view of all my financial activities while being able to
> track each venture separately.
>
> I've gone ahead and created the following structure:
>
>     1. PERSONAL WORK
>        1. INCOME
>        2. EXPENSES
>     2. PROPERTIES
>        1. PROPERTY A
>           1. INCOME
>           2. EXPENSES
>        2. PROPERTY B
>           1. INCOME
>           2. EXPENSES
>        3. AUDIO DEVICES
>        1. INCOME
>        2. EXPENSES
>
> What I would like to do is add "ASSETS" and "LIABILITIES" sub-accounts to
> "PERSONAL WORK" and each of the "PROPERTIES". Unfortunately, GnuCash only
> allows me to assign sub-accounts types as either "Income" or "Expense"
> unless the parent account is not set up as either Assets or Liability? I
> can make an account an "Asset" or "Liability" if the account is a "Top
> Level Account". Is there any way to get around this limitation?

I do not know a way around the limitation that GnuCash places on the 
types of accounts which can be children of various types of accounts, 
e.g. that an Asset account may not be a child of an Income or Expense 
account.

I face a similar situation with my own bookkeeping. I track assets, 
liabilities, income, and expenses, for my marriage's joint holdings, and 
my personal income, and my spouse's personal income, for my small 
business, and some real estate.  I let GnuCash insist that Assets, 
Liabilities, Equity, Income, and Expenses be top-level accounts. I 
divide into my various joint and personal and business divisions at the 
next level down.

Applying that to your example, your chart of accounts might be:

1. Assets
    1.A. Personal Assets
    1.B. Property Assets
      1.B.a. Property A Assets
      1.B.b. Property B Assets
    1.C. Audio Devices Assets
2. Equity
    2.A. Personal Equity
    2.B. Property Equity
      2.B.a. Property A Equity
      2.B.b. Property B Equity
    2.C. Audio Devices Equity
3. Expenses
    3.A. Personal Expenses
    3.B. Property Expenses
      3.B.a. Property A Expenses
      3.B.b. Property B Expenses
    3.C. Audio Devices Expenses
4. Income
    4.A. Personal Income
    4.B. Property Income
      4.B.a. Property A Income
      4.B.b. Property B Income
    4.C. Audio Devices Income
5. Liabilities
    5.A. Personal Income
    5.B. Property Income
      5.B.a. Property A Income
      5.B.b. Property B Income
    5.C. Audio Devices Income

I can imagine three objections you might have to this structure.

1. It is verbose. My structure has 30 lines, while yours has only 13 
lines (or 21 after you add Assets and Liabilities as you propose). I do 
not find that to be a problem. The only time I see all the accounts is 
in the Accounts tab, and most of the time most of the hierarchy is 
collapsed and hidden from view. When I want to enter an account name 
into a transaction, I type portions of the path of account names, and 
GnuCash gives me a menu of the few accounts which match those portions.

2. It doesn't let you report on a single subtree of the account and 
capture all the income, expenses, assets, and liabilities. I also do not 
find that to be a problem. GnuCash custom reports allow you to select 
which accounts to include in the reports. If you want a report for 
Property A, you can define a GnuCash custom report which includes 1.B.a. 
Property A Assets, 2.B.a. Property A Equity, 3.B.a. Property A Expenses, 
4.B.a. Property A Income, 5.B.a. Property A Income and all subaccounts 
of those five accounts.

3. You might not be sure which structure will work for you long-term. 
The good news is that GnuCash lets you move accounts from one parent to 
another within the Accounts tree (subject to its rules about which 
account types can be children of which account types), and all the 
transactions associated with that account follow the account to its new 
home.  You can do even pretty major restructuring of accounts as you go, 
and your records stay intact.

I hope this helps. Good luck with your bookkeeping!
        —Jim DeLaHunt