To Dann F et al. -- In my opinion, the informal College Fund you describe is neither a liability nor a short-term asset, but rather is a long-term asset, in my opinion. I am not an expert about how personal financial accounting should be done, where that is different from business accounting. But is like retirement funds and I think it should be accounted for the same way, which is (i think): just stated as one of your assets, but clearly labelled as to its purpose. I think it should be included under a Long Term Assets "placeholder account" in GnuCash. I'd like to see some examples of proper statements for individual financial reporting though. If done that way in GnuCash, then increases (decreases) in value from stock market fluctuations would be included as gains (losses) within the regular Income Statement of each period. And for tax purposes, that would be proper: you will have to pay income tax on the gains, because it is only an informal, personally-defined thing of yours.
For businesses, in more full-fledged accounting systems, GAAP accounting would allow the gains (losses) to be kept aside, and only reported in what is called the Other Comprehensive Income statement. If you really had a formal, contractual, legal obligation to pay for the entire college education of a current minor, I suppose that could be reflected in a long-term liability, at the estimated present value of the future cost which must be paid. Like how for firms having a defined benefit pension program will have an estimated Pension Liability. And they will also have a Pension Assets account, which hopefully should be similar in magnitude. And there are requirements for how to show re-estimates of the pension liability, etc. But in your case, I don't believe you have an absolute obligation to pay all the college costs no matter what they might turn out to be; it sounds like you are taking on a moral obligation to pay whatever funds have accumulated in your college fund account. If the purpose of creating a liability would be to highlight the value and its restricted purpose, i don't think that is necessary: statement of the asset, properly labelled as to its purpose, suffices. But better than doing an informal program of your own, if u are in the U.S. you could get tax benefits from using a formal 529 plan: "529 plans are named after Section 529 of the Internal Revenue Code (IRC), which was added in 1996 to authorize tax-free status for 'qualified tuition programs'. Earnings in 529 plans accumulate on a tax-deferred basis and distributions are not taxed federally when used for qualified higher education expenses <https://www.savingforcollege.com/article/what-you-can-pay-for-with-a-529-plan>. The definition of qualified higher education expenses was expanded in 2015 to include computers, in 2017 to include up to $10,000 annually in K-12 tuition and in 2019 to include student loan payments and costs of apprenticeship programs. " from SavingForCollege.com Somewhat similarly, a nonprofit may have a restricted asset, e.g. the invested funds received from a foundation or other donor, which may only be spent for a specified purpose. Simple accounting for this (as opposed to full formal Funds Flow Accounting for nonprofits and governments which is more complicated) would show the asset, sensibly labelled, on a regular balance sheet for the nonprofit. If job costing were available, it would be designated as a job, and in each period an income statement (or Revenues less Expenses) statement would show new receipts of funds from the donor and perhaps interest earnings, and it would document eligible expenses. Hope this helps Don On Sun, Aug 2, 2020 at 4:53 PM Stephen M. Butler <kg...@arrl.net> wrote: > On 8/2/20 8:35 AM, dann frazier wrote: > > Thanks David - yeah, negative share balances are possible. But it's > > seemingly not possible to track shares in a Liability account. > > > You can always treat Liabilities as a negative Asset. > > > > > > On Sun, Aug 2, 2020 at 2:41 AM David Carlson > > <david.carlson....@gmail.com> wrote: > >> I meant no requirement to have a positive share balance. You should be > able to have a negative share balance in a security account. > >> > >> On Sun, Aug 2, 2020 at 3:37 AM David Carlson < > david.carlson....@gmail.com> wrote: > >>> I believe there is no restriction to have a positive number of shares > of a security. After all, it is common to sell stock short (Against the > box) or not. > >>> > >>> David Carlson > >>> > >>> On Sun, Aug 2, 2020 at 2:48 AM dann frazier <da...@dannf.org> wrote: > >>>> Hi, > >>>> > >>>> I'm trying to figure out the right way to represent a non-currency > >>>> debt in gnucash. That is, I'd like to be able to record that I *owe* > >>>> 20 shares of FooFund. I thought I'd just create a Mutual Fund > >>>> Liability account, but apparently Mutual Funds and Liabilities are > >>>> mutually exclusive. Is that restriction by design? > >>>> > >>>> One of the reasons I want to do this is for a college fund. I'd like > >>>> to keep track of the fund value in an account, but also "keep it off > >>>> the books" in a sense when it comes to Asset vs. Liability > >>>> calculations, as I consider it both something I have and something I > >>>> owe. I tried doing this by creating an Asset account and a Liability > >>>> account that grow together, and cancel each other out, but I couldn't > >>>> get that to work since it won't let me make the Liability a security. > >>>> Is there a better way to do this? > >>>> > >>>> -dann > >>>> _______________________________________________ > > -- > Stephen M Butler, PMP, PSM > stephen.m.butle...@gmail.com > kg...@arrl.net > 253-350-0166 > ------------------------------------------- > GnuPG Fingerprint: 8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8 > > _______________________________________________ > 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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