Thanks, that answers my question! On Sun, May 8, 2022 at 12:03 PM <davidcousen...@gmail.com> wrote:
> Bogdan > > That's easy. In the Accounts Tab, right click on the top level Equity > account to > select it and then right click anywhere in the pane and select New Account > from > the popup menu or use Actions->New Account from the mainmenu. This should > start > the dialogue with Equity as the parent account, enter the name "Revaluation > Reserve", select the account currency and add any other detail (opening > balance > if non zero etc.) . At the bottom the Parent account should show as > Equity. (You > can select any other Equity account as parent depending upon your > heirarchy in > Equity). Click OK and you have an equity account which you can the use as > the > other split in transactions recording the changes in asset value. > > David > > > On Sun, 2022-05-08 at 10:37 +0200, Bogdan wrote: > > Well, actually my question is not an accounting question but rather a > > technical one on how to set up and use equity accounts in Gnucash, if at > > all possible (I'm a qualified accountant by the way). I took a > revaluation > > reserve just as an example. > > > > In many accounting frameworks you can find items that affect equity > > directly rather than through Profit and Loss / Retained Earnings. > > > > For example, if you account for Property at fair value through P&L (so > > called "investment property") you would reflect an unrealized gain in > > market value as : > > > > Dr Asset Cr Income (you equity increases because your net income / > retained > > earnings increase) > > > > However, if you use a revaluation model for the Property and mark it to > > market you would do: > > > > Dr Asset Cr Reserve account > > > > A Reserve account is an equity account (as much as Retained Earnings is > an > > equity account). This gain doesn't go through P&L and doesn't affect > your > > income and expenses but it does increase your equity / capital directly > > through the reserve account (where it's reflected on the asset side - the > > property account or counter-account is beyond the point). > > > > So I guess I am just wondering how to create an equity account in > Gnucash. > > I used to set up these accounts as sub-accounts in the Trading account > but > > now when I'm trying to make an entry directly to such a sub-account in > > Trading (e.g. Dr Asset Cr Trading) the Trading account changes to > Imbalance > > automatically. Is there a workaround or is there a way to fix it? > > > > Thanks! > > > > On Sun, May 8, 2022 at 2:39 AM Michael or Penny Novack < > > stepbystepf...@comcast.net> wrote: > > > > > > This Investopedia page ( > > > > > > > > https://www.investopedia.com/terms/r/revaluationreserves.asp#:~:text=Revaluation%20reserve%20is%20an%20accounting,of%20the%20asset%20has%20changed > > > > .) might provide some insights into how to setup revaluation > reserves. My > > > > reading of this is that the Reserve account is a contra account to > the > > > asset > > > > value and it is recorded against a specific Expense account to > account > > > for short > > > > term variations in the asset value. Find the section on recording > > > revaluation > > > > reserves a bit down the page. Most jurisdictions don't tax > unrealized > > > gains or > > > > give you exemptions for unrealized losses, so you would likely want > to > > > record it > > > > under an Expense account category for non-deductible expenses. > > > > > > > > You should seek specific accounting advice from a qualified > accountant > > > for your > > > > jurisdiction and specific situation and not rely on this > > > > > > > > David Cousens > > > > > > Listen to David. > > > > > > This is a house. Ordinary expenses fore most repairs are > non-deductible. > > > But certain "improvements", while also non-deductible at the time, are > > > allowed to be added to the basis, and so can reduce capital gains > > > when/if the house is sold << and you might not be required to report > > > these gains if buying another house for more within a certain amount of > > > time >> BUT (and this is why I am not being more specific, though I > know > > > some of the details) I am NOT "qualified" to give such advice. Seek a > > > qualified professional. > > > > > > Michael D Novack > > > > > > > > > > > > _______________________________________________ > > > gnucash-user mailing list > > > gnucash-user@gnucash.org > > > To update your subscription preferences or to unsubscribe: > > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > > If you are using Nabble or Gmane, please see > > > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > > > ----- > > > 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 > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > If you are using Nabble or Gmane, please see > > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > > ----- > > 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 > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > 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 To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. 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