On Sat, 04 Mar 2000 11:09:25 EST, the world broke into rejoicing as
[EMAIL PROTECTED] said:
> It's been rumoured that Valsecchi Patrick said:
> > How could I give an initial value to an account?
> >
> > I know I can use an entry (how it is automatically done by the soft)
> > that contains an initial value without "Transfer from". But everything
> > will be broken (in particular the "balance sheet") when I will use the
> > "scrub" functionality.
> >
> > I can use an "income" account for that, but my "profit and loss" report
> > will be wrong.
> >
> > So with double entry, it's impossible to have initial value for an
> > account.
> >
> > Is there a solution I missed or is it something interesting to add to
> > the soft?
>
> Right, its currently not implemented. I beleive that the right way to
> do this is to add an initial value into the "Account" structure, and also
> add this to the GUI for creating an account. Haven't done that, although
> it seems easy to do.
>
> Note also, gnucash doesn't support accounting periods right now;
> and having the initial/final balance will be crucial for supporting this.
How about a *third* answer?
Stick it into Equity.
A typical balance sheet consists of *three* portions:
- Assets
The stuff you own
- Liabilities
The stuff you owe
- Equity
The "finance stuff" that makes it all balance.
For a corporation, this includes share equity.
For corporations and individuals, this includes "retained earnings."
Thus, if I am setting up my accounts fresh, and have a house that cost
$2M, and a loan outstanding of $1M, and don't want to spend time
accounting for the past, I'd set up two transactions thus:
1. Account for House
Debit Credit
Assets: Home $2,000,000
Equity: Retained Earnings $2,000,000
2. Account for Loan
Debit Credit
Equity: Retained Earnings $1,000,000
Liabilities: Loan $1,000,000
Both transactions balance, so the whole thing balances out OK...
The net result is that I've got opening balances thus:
Debit Credit
Assets: Home $2,000,000
Liabilities: Loan $1,000,000
Equity: Retained Earnings $1,000,000
This indicates that I had, in the past, earnings of $1M that got
invested in the home. I may have frittered away other money that is
not reflected by this, but in any case, this reflects the past
activity quite satisfactorily.
--
"When we understand knowledge-based systems, it will be as before
-- except our fingertips will have been singed." -- Alan Perlis
[EMAIL PROTECTED] - <http://www.ntlug.org/~cbbrowne/lsf.html>
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