hi, I think historically the concepts guide has been for personal users. I don't think it's been expanded for small-business users. A separate section on depreciation for personal vs. small-business is probably appropriate.
-derek David Harrison <[EMAIL PROTECTED]> writes: > I was reading chapter 11 of the concepts guide regarding depreciation > and noticed a significant error. > > A question, though, before I get to the error. For whom is the > concept guide written? If it is for someone who is tracking there > home expenses and are concerned about recording the value of their > house, car, etc. then the chapter makes sense. If it is aimed at the > small business, then the reason behind depreciation is incorrect. If > it's aimed at both, then we need to rework the concept guide and > separate the issues. > > Here's the issue. Depreciation is not the recording of the change in > value of an asset, it is the matching of the expense of purchasing the > asset with the revenue that that asset will produce. For example, if > an asset will produce income for 5 years on an even basis every year, > then a straight line depreciation would be appropriate. Or, if an > asset with produce x number of dollars per man hour used, then it > should be depreciated based on the number of man hours it is used over > the estimated number of man hours it will be used over it's entire > life. > > Although we may in the future, for capital assets are not written up > if the value increases. Nor would the carrying value (cost less > depreciation) be written down if the market value is less than the > carrying value. Note that I'm talking about capital assets, not > investments, inventory, or like instruments that are recorded at the > lower of cost or market value. Nor am I talking about intangible > assets, like trademarks, patents, goodwill - that's a whole other > topic. > > Anyway, I started working on rewriting the chapter, but I stopped > because I wanted to clarity who the audience was before I wasted all > my time for nothing! ;) > > Thanks for your thoughts > > Dave > > p.s. Does anyone want a gmail account? I have 6 invites. Send me an > email off-list if you want one. > _______________________________________________ > gnucash-devel mailing list > [EMAIL PROTECTED] > https://lists.gnucash.org/mailman/listinfo/gnucash-devel > > -- Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory Member, MIT Student Information Processing Board (SIPB) URL: http://web.mit.edu/warlord/ PP-ASEL-IA N1NWH [EMAIL PROTECTED] PGP key available _______________________________________________ gnucash-devel mailing list [EMAIL PROTECTED] https://lists.gnucash.org/mailman/listinfo/gnucash-devel
