Don,
What I presented was a way to track something that GnuCash isn't set up
for. There have been prior posts discussing systems like Envelope Method
budgeting and segregating/earmarking funds. These would be cases where
the real-world accounts need to be kept unchanged, but the user wants to
track how they've earmarked funds in those accounts.
Certainly, outside budgeting software or a spreadsheet can do the job.
When budgeting or deciding on saving, you're already looking at your
books and reports to make those decisions, so it does make sense to want
to handle that activity in the same place.
While it was given as one of the options, I'm not a fan of abusing
Equity accounts either.
Regards,
Adrien
On 8/8/20 12:11 AM, doncram wrote:
Yikes, i think Adrien should not write that up on the wiki! This has
gotten crazy. No one should have to go through complicated gyrations so
that equity subaccounts can awkwardly report amounts that are unusual and
aren't very meaningful. This gets impossible to follow, so I am not sure,
but I think the amounts that could appear in those accounts would have to
be created based on off-line calculations, say in a spreadsheet....why not
just use the spreadsheet, no value is added and possibly mistakes are
introduced in whatever you are doing trying to make equity accounts report
something.
The only basic application I understand in all of this is about tithing,
where one wants to track amounts of tithing obligations incurred vs.
amounts of tithing paid. Which is handled extremely simply by considering
the total amount of unpaid tithing obligation as a liability, "Tithing
Payable", and by considering the incurrence of new tithing obligations as
expenses. Then payments of cash to reduce the tithing payable are just
that. Whenever you receive salary or otherwise trigger a tithing
obligation, simply recognize the corresponding tithing expense. You
receive $5,000 salary, for which $500 tithing is due: enter as Tithing
expense +500, Tithing payable +500. The tithe might actually be paid to a
church only once a year, at the end of the year, say? Then the Tithing
payable will gradually increase, say it has accumulated to $8,000 when you
choose to pay it all off from your checking account: enter as Tithing
payable -8,000, Checking -8,000. At every point in time, a Balance Sheet
report would show your accumulated unpaid obligation. For any period of
time, an Income Statement will show your salary earnings and whatever else,
and the corresponding Tithing Expense (which is the increase in tithing
obligation recognized during the period.
I regret seeming to approve, in a previous post, of any use of an equity
subaccount to report something different than what equity is (sum of all
original investments by owner(s) to the business, plus accumulated net
income since then, less dividends or other returns of equity to owners). I
thought maybe if you have a fixed emergency savings threshold you wanted to
reflect, that it would be okay to do that, so equity is divided between
that and all other, but that doesn't accomplish anything useful, you
already knew what your emergency amount is. This other stuff is crazy, and
is fighting against what the accounting system can do for you, rather than
letting the accounting system help you (keep track of what you owe vs. what
you have paid, in tithing). Or could anyone explain any sensible purpose
to this?
Don
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