Adrian, While I am not an accountant, historically I have used a method similar to that suggested by Adrien. However, I am intrigued by the answer provided by Michael Novack, as it avoids the problem of overstating potentially taxable income without needing to have a group of accounts to segregate before running your tax reports at the end of the year.
Thus I am considering switching to a method modeled on his suggestion. David C On Thu, Dec 7, 2017 at 4:19 PM, Adrien Monteleone < adrien.montele...@gmail.com> wrote: > I have to concur on the $70 gift idea. > > You paid $430 for a stored value card that has $500 on it. > > This is no different than if you handed a bank teller $430 in small bills > and they returned to you 5 one hundred dollar bills. (assuming the bank is > just fine with that) > > When you spend $100 from this card you aren’t really spending $86. You’re > spending $100. > > After you’ve spent $430, the next $70 on the card is a gift to you from > whomever sold you the card. > > But you can’t truly determine which $70 is gift and which isn’t. > > The easiest and likely most correct transaction is this: > > Dr. Assets:Cash $430 > Dr. Income:Gift Received $70 > Cr. Assets:Prepaid Card $500 > > When you use the card, all transactions are just normal as if you’d paid > $500 for it. > > There is no discount. There is no rebate. You received a ‘gift’ of $70 in > the form of extra stored value on the card. > > Had you paid nothing and received a card with a $70 value, the transaction > would be: > > Dr. Income:Gift Received $70 > Cr. Assets:Prepaid Card $70 > > Note, the difference is NOT the $70. The difference is what you paid for > the extra value, in this case $430. > > Had you paid $430 for one card and the merchant gave you a separate card > with $70 value on it (that’s two cards totaling $500) then your entries > would be this: > > Dr. Assets:Cash $430 > Cr. Assets:Prepaid Card $430 > > Dr. Income:Gift Received $70 > Cr. Assets:Prepaid Card $70 > > There’s no fundamental difference in these two separate transactions than > the combined transaction above. They record the same net amounts in the > same places. The fact that all of this takes place on one card instead of > two, or that the gift is from a merchant instead of a family member or > friend does not change the nature of the transaction. > > You can record anything you want the way you want if this is just for you > to keep track of, but the goal should always be to use transactions to show > an accurate picture of what happened. What happened is NOT that you saved > money on future purchases. What happened is you received a gift of $70 in > the form of a stored value card. > > But by all means, ask a CPA if it’s that important to you. > > Regards, > Adrien > > > On Dec 7, 2017, at 3:46 PM, nvsoar <nvs...@charter.net> wrote: > > > > On 12/06/17 12:44, adrian wrote: > >> Tommy Trussell wrote > >>>> Adrian: > >>>> In the case at hand I spent $430 on the gift card and when I buy > >>>> something > >>>> that costs $100, I'm really only spending $86. That's what makes > sense > >>>> to > >>>> me for how this ought to be counted. Since I don't know the > category of > >>>> the expense in advance, I can't just put in a $70 offset unless I put > it > >>>> as > >>>> "misc", in which case I lose track of some information about how I > >>>> allocated > >>>> my money. > >>>> > >>> I went back to your original question (remember that this is NOT a > forum > >>> -- > >>> it's an email list that you're viewing through Nabble) > >> Yeah, despite that I have been unable to actually subscribe to the list. > >> But your point was you wanted more context, I suppose. > >> > >> > >>>> I bought a $500 gift card for $430 this week. I would like to add > this to > >>>> gnucash as some kind of asset so that as I spend it, the correctly > scaled > >>>> amount gets transferred to the expense account I use. In other > words, if > >>>> I > >>>> spend $100 from this account it's really only $86. > >>>> > >>>> I tried to do this by creating a security fund and then using the > price > >>>> editor to set the price to 0.86. But when I insert a transaction from > >>>> the > >>>> new account to an expense account, it doesn't apply the 0.86 factor. > >>>> What > >>>> is the right way to do what I want to do? > >>> > >>> I think you have demonstrated the difficulty with what you're trying to > >>> do-- you're trying to make a rebate card a different KIND of currency, > >>> which in one sense, it is. HOWEVER every time you make a purchase from > >>> that > >>> card it will require a currency exchange, which adds a level of > complexity > >>> and may not produce the result you want. > >>> > >>> I'm sure you could make it work, but in the end, it's a lot easier to > just > >>> offset the $70 against the expenses. TECHNICALLY you don't get benefit > of > >>> the full amount you spent on the card until you have completely > depleted > >>> the value of the card, but that would be a PITA (sorry for the acronym > -- > >>> I > >>> mean "difficult"). > >>> > >>> I think the real answer is to go back and think about what it is you > want > >>> to achieve. > >> I'm not sure what exactly is unclear. I am thinking of the acquisition > of > >> this card not as a purchase, but as a shift of assets from one form to > >> another. So instead of $430 in the bank I now have a different asset, > >> namely $500 on the card. Yes, it's true, I don't benefit until I > spend the > >> money. But the same is true of money in the bank. > >> > >> But it's not really $500 on the card because I only spent $430 on it. > It is > >> exactly like a currency exchange, though it's not obvious to me why this > >> means my goal is a very complex one. It seems pretty simple to have an > >> exchange rate and have the card denominated in some currency, say the > Gifta, > >> that is equal to .86 dollars. When I buy something using the card I > can go > >> to the card's account and list the expenses in Giftas and they will be > >> automatically translated by the 0.86 factor. (I assume that if I made > an > >> account denominated in, say GBP, that I would be able to get that to > >> translate to the USD that I use for my regular accounts; after all, > this is > >> something that is important to many people.) > >> > >> Now actually I realized that the solution I was fiddling with can be > made to > >> work. As I mentioned before, I made an account and created a security > and > >> tried to set its price using the price editor. For some reason the > Price > >> Editor doesn't seem to do anything, but there is a column labeled > "Price" in > >> the account I made, and if I set this to 0.86 (which I have to do > manually > >> for every transaction, it seems) then things work as I was hoping. > (And I > >> notice that prices I enter in the ledger appear in the price editor even > >> though the reverse doesn't seem to be the case.) It would be even > nicer if > >> I could set the price once and have that same price stay in effect > until I > >> change it, rather than having to enter it again for each transaction > with > >> the default price being "1". > >> > >> Why do I care? It's just so that my accounting correctly tracks my > >> expenditures in different categories. I don't need to use accounting > >> software to do price comparisons, but if I want to know how much I > spent on > >> Widgets this year---and I buy some using the card---the number will be > >> inflated if I don't account for the discount. > >> > >> > >> > >> > >> > >> -- > >> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User- > f1415819.html > > Hmmmm. Seems to me that you received a $70.00 gift along with the card. > > nvsoar > > _______________________________________________ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > 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. > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > 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. > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org 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.