[GNC] How to Properly Record Valuation Changes in Home Value?

Christopher Lam christopher.lck at gmail.com
Mon Sep 15 22:49:07 EDT 2025 

Replying to myself. GAAP and IFRS both seem to favour historical cost
accounting.

On Tue, 16 Sept 2025, 9:39 am Christopher Lam, <christopher.lck at gmail.com>
wrote:

> I can offer yet another opinion...
>
> I wouldn't record unrealised gains as Equity transfers.  A house purchased
> for $40k in 1976 would enjoy increasing values via period transfers from
> equity; and if the up-to-date valuation is $800k, and you sell today,
> you'll be recording a negligible capital gain. It is in my view that
> appreciating assets are best recorded as purchase price and left alone
> until the sale, then a large capital gain is recorded as income.
>
> I would however unrealised losses as periodic expenses. A car purchased
> for $30k in 2020 and depreciates annually, and I may claim partially as a
> tax deduction.
>
> IANAA of course.
>
> C
>
>
> On Tue, 16 Sept 2025 at 09:02, Tom Route-36 <tom.route36 at gmail.com> wrote:
>
>> Hi all,
>>
>> I wanted to reply to all of you here who jumped in with your advice and
>> comments.  I think I understand the proper way to handle this now.  And
>> it seems pretty simple and straightforward too thanks to all your
>> feedback.  To keep things recorded properly I just need to create a new
>> Equity account (named Unrealized Appreciation or something similar).
>> And then for each valuation change entry in my Asset account (MyHome) I
>> put a corresponding entry in that new Equity account to balance things.
>> Really simple now that I look back on my question.  Anyway, thanks again
>> to everybody.
>>
>> Tom
>>
>>
>>
>> On 9/15/2025 4:30 PM, David Warren wrote:
>> > Most accountants will tell you to credit equity for unrealized
>> appreciation
>> > in your assets.
>> >
>> > But if you are doing your own books, it's really your choice in terms of
>> > what types of reports you want to see and how you want to use.
>> Sometimes I
>> > credit income accounts for unrealized appreciation because it makes it
>> > easier for me to track how a certain asset account has grown or shrunk
>> year
>> > by year and what types of income (realized, unrealized, taxable or not
>> yet
>> > taxed) it has thrown off. When the income is eventually realized I
>> credit
>> > realized income and debit unrealized income, which works for me. But
>> it's
>> > really a matter of how you want things to work for you.
>> >
>> > On Mon, Sep 15, 2025, 5:03 PM Kalpesh Patel <kalpesh.patel at usa.net>
>> wrote:
>> >
>> >> I've done something similar.
>> >>
>> >> I've created a sub-account called "Appreciation" underneath the real
>> estate
>> >> asset holding account, and then I add the valuation transaction as
>> noted in
>> >> the appraisal report in "Appreciation" against "Retained Earnings"
>> >> underneath "Equity".
>> >>
>> >> -----Original Message-----
>> >> From: Murugan Mariappan <m.muruganandam at hotmail.com>
>> >> Sent: Monday, September 15, 2025 8:49 AM
>> >> To: gnucash-user at gnucash.org; Harold Hallikainen <
>> harold at hallikainen.org>
>> >> Subject: Re: [GNC] How to Properly Record Valuation Changes in Home
>> Value?
>> >>
>> >> Revlaution suplus / deficit should be treated as non P&L items, so
>> best way
>> >> to is to create a Revaluation Account under Equity and pass the
>> entries for
>> >> example
>> >>
>> >>
>> >> Dr Assets:Building (PPE)                         $100,000
>> >>      Cr Equity: Revaluation Account         $100,000
>> >>
>> >> If there is a loss then it will  be in the reverse for example
>> >>
>> >> Cr Assets:Building (PPE)                         $50,000
>> >>      Dr Equity: Revaluation Account         $50,000
>> >>
>> >>
>> >>
>> >> Saludos Cordiales
>> >>
>> >>
>> >> Murugan
>> >>
>> >> ________________________________
>> >> From: gnucash-user
>> >> <gnucash-user-bounces+m.muruganandam=hotmail.com at gnucash.org> on
>> behalf of
>> >> Harold Hallikainen via gnucash-user <gnucash-user at gnucash.org>
>> >> Sent: 15 September 2025 00:03
>> >> To: gnucash-user at gnucash.org <gnucash-user at gnucash.org>
>> >> Subject: Re: [GNC] How to Properly Record Valuation Changes in Home
>> Value?
>> >>
>> >> I'd be tempted to have two subaccounts in the MyHome asset. These
>> would be
>> >> Purchase Price and Unrealized Appreciation. Then have an income account
>> >> called Unrealized Income.
>> >>
>> >> Harold
>> >>
>> >>
>> >> On Sun, September 14, 2025 7:57 pm, Tom Route-36 wrote:
>> >>> Hi all,
>> >>>
>> >>>
>> >>> This is more of a double entry bookkeeping question rather than
>> >>> something specific to GnuCash; but I'd appreciate any input on the
>> >>> proper way to do this.  I'm tracking the valuation changes of my
>> >>> personal home based on notices that I get every 2 years from the
>> >>> County Assessor.  When I was using Quicken, I did this in a single
>> >>> account (named MyHome).  The opening balance of MyHome was my original
>> >>> purchase price.  And then every 2 years as I got updated valuation
>> >>> notices, I'd record a transaction back into that same MyHome account
>> >>> (since Quicken would let me do that) to adjust the MyHome account
>> >>> balance to make it match the current value listed on the County
>> >> Assessor's
>> >> notice.
>> >>>
>> >>> Now that I'm using GnuCash and having to do things properly with
>> >>> double entry accounting, I was wondering how to go back and fix
>> >>> things.  I know I still want an Asset account for MyHome to track the
>> >>> valuation.  But for DE accounting, what should I be using for that
>> >>> corresponding second account to balance things out as the valuation
>> >> changes?
>> >>>
>> >>> Tom
>> >>> _______________________________________________
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>> >>
>> >>
>> >> --
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