Hi George, How you record these items will depend a great deal on the exact nature of the item and the nature of the future benefit you receive from them.
In the case of a pension the future value may be different from simply the paid in value of the contributions. Depending on the nature of the pension, there may or may not be employer contributions and/or in the case of some government pension contributions from the government and/or payment of interest earned by your contributions. Whether you are able to record this information will largely depend upon whether it is reported to you by whoever runs the pension scheme. One could treat a pension, particularly if you know what its future value is, as an asset which you have purchased instead of treating it as simply as an expense. In this case you could treat the the payments as simply exchanging one asset for another. A sample transaction in this case might be Asset : Bank Account Credit( decrease) $200 Asset: PensionFund:My contributions Debit ( increase) $200 In this case an accountant would say you have capitalized the expenditure on contributions, rather than Asset: Bank Account Credit (decrease) $200 Expense: Pension Contributions Debit (increase) $200 where that expenditure is expensed. Capitalising the expenditure is normally reasonable where the benefit of the expenditure is unlikely to be consumed during the accounting period, normally annually for personal finances. You could then also record other contributions (employer , government , interest etc) under sub accounts of Asset:PensionFund if and when they are reported to you. My superannuation fund reported to me annually any cumulative gais/losses associated with their investment strategies. Generally such contributions in most jurisdictions would be tax-free (but not necessarily and may depend on your local laws) and the transacion would be a debit to the asset account and a credit to a non-taxable income account for the amount of the increase in such contributions. If the above is not clear particularly the idea of at least one debit and one credit entry associated with each transaction, you may need to read up on the basics concepts of double entry accounting Similarly a life insurance is an asset which is purchased by your regular payments. Some insurance policies are simply term insurance, i.e. they only apply for the term you are paying the premiums and you are only entitled to the payout if the insured event occurs during that period (the premiums on these would most likely be treated as an expense) whereas others are cumulative products where you may be entitled to a specified amount at a specific time in your life as well as the insurance payout should you die earlier than that. In this case you have an investment component often as accumulating bonuses to the policy face value. This can be treated as an investment. It is almost impossible to give general advice in detail as you also have to know the legal framework in which these asset products are created and how they are treated in terms of taxation to record them properly. If you are in any doubt, it may pay to consult a local accountant as any guidance here is really only about how you might potentially use Gnucash to record a transaction in general and not specific circumstances. David Cousens ----- David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ 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.
