[GNC] Question about the accounting equation in the GnuCash guide

[John Ralls]

Nope. Net Worth and Equity are the same, except that Net Worth is usually evaluated at fair market value while Equity is always at book value.

Equity = Assets - Liabilities, so your version would be Net Worth = 2 * (Assets - Liablities).

Another way of understanding Equity is as the sum of paid in capital (or opening balances for a personal book) + income - expenses.

Regards,
John Ralls

> On Aug 16, 2025, at 07:52, David G. Pickett via gnucash-user <gnucash-user at gnucash.org> wrote:
> 
> I look on it as:
>     Net Worth = Equity + Assets - Liabilities
> where Equity is softer assets like the value of a business if sold, but Assets are solidly accounted balances owed to you.  Of course, a negative Liability is as good as a positive Asset, but accounts are stuck with their category as Asset or Liability with an assumed sign against Net Worth.
> 
> I am sure this will upset the properly trained accountants!
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.