Household Inventory as asset account

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alkaprose

14 Jan, 2022 12:14 AM

https://infinitekind.tenderapp.com/kb/accounts-and-categories/types-of-accounts suggests:

"Asset Accounts ... can be used ... to keep a household inventory..."

I cannot parse this out: How do I buy an item (with a category) in one account and record it into another (Asset) account?

  1. 1 Posted by dwg on 14 Jan, 2022 12:49 AM

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    I'm a fellow user.

    You cannot.purchase an item and have it as both an expense and as an asset that would effectively be double counting.

  2. 2 Posted by alkaprose on 14 Jan, 2022 01:21 PM

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    That's why I am asking. This statement in the documentation: "Asset Accounts ... can be used ... to keep a household inventory..." by the developers of the software seems to indicate otherwise.

  3. 3 Posted by dwg on 14 Jan, 2022 09:22 PM

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    This is not done by creating three legged transactions which is what you seem to be assuming.

    You need to create break it down to two transactions or have separate transactions depending on the circumstances.

    For example if you bought car for Cash you would not use a category of car purchase rather you would transfer the funds from a bank account to an asset account for the car. So it would be a transfer transaction not an expense transaction.

    Other assets that are already owned you could use the initial account balance to set up the starting balance then have appreciation/depreciation categories to record changes of value if you wish.

  4. 4 Posted by alkaprose on 15 Jan, 2022 12:18 AM

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    Thank you for helping me work this out.

    On a more common purchase, buying a toaster has one category (Sales Tax) that could have Federal tax consequences, so I want to track that as well as the Appliance category.. Would I be able to using this method?

  5. 5 Posted by dwg on 15 Jan, 2022 01:26 AM

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    Moneydance is based on accounting principles and in non-investment accounts this fundamentally mean that each transaction must have a source and a target.

    So a deposit into an account must have as its source a category or an account, likewise a payment from an account must have another account or category as its target. Hence any transaction(s) that can fit these rules can be entered into the software.

    So it comes down to want you want to actually show and be reported on as to the transaction that would be needed

  6. 6 Posted by alkaprose on 15 Jan, 2022 02:09 PM

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    Again, thanks. I will be checking with the devs to see why they said this. I will post a reply here.

  7. Support Staff 7 Posted by Ethan on 15 Jan, 2022 05:03 PM

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    I think the intention is similar to what dwg described above: "Other assets that are already owned you could use the initial account balance to set up the starting balance then have appreciation/depreciation categories to record changes of value if you wish."

    Asset accounts are mostly meant to be a general 'catch all' account whose value could be increased or decreased as the specific situation warrants. That allows them to be used for multiple purposes. I think in general most people don't use them unless they're trying to do something that falls outside of the most normal purchases from bank accounts or credit cards, like tracking the value of large assets over time so it would show up in one's overall net worth (like a car, house, etc).

    It may be more useful to describe what you are trying to track and how, and we could then provide more concrete suggestions about how to go about that, which may or may not involve asset accounts.

    Ethan
    Infinite Kind Support

  8. 8 Posted by alkaprose on 15 Jan, 2022 05:23 PM

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    Since the knowledgebase article says:

    Asset Accounts are a “catchall” account. They can be used to track the value of a home, to keep a household inventory for insurance purposes, or track any other items you would like included in your net worth.

    It implies, to me, that the how is worked out in the devs minds.

    I am starting with the assumption that a household inventory is items you would enumerate on an insurance claim.: toaster, clothing, furniture, tablet, towels, tools, etc.

  9. 9 Posted by dwg on 15 Jan, 2022 09:08 PM

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    I do not believe it was ever the intention that Moneydance maintain a household inventory to this level of detail. It sounds like something that a simple spreadsheet could do.

  10. 10 Posted by dtd on 15 Jan, 2022 10:43 PM

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    just a user - if you want to do a high level of detail, I'd recommend the transactions be the detail that compile into each asset account.

    I've attached a concept in the picture. You create asset categories like Household Inventory, and if you want some detail, you could put Kitchen, Bedroom, etc as subassets. Then you can enumerate specific asset items (like toaster, clothing) as transactions, with memos, values, dates if you wish. Maintaining such would be your choice as MD doesn't really care what you put.

    The only caveat I'd throw in is to create an expense category called AAAsset Offset or something like that - as you must do the double entry bit, and Assets take the earliest alphabetical expense category as the default rather than letting you assign one. What this does is allow you to add or subtract transactions without a lot of work - the amounts drop into this offset bucket. (You can still use other categories, but this becomes the "I don't have to worry about it default")

    Hope that helps.

  11. 11 Posted by alkaprose on 17 Jan, 2022 07:04 PM

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    From what I understand, you are proposing replacing some of the

    Account-Functional Description structure (TV-Appliance) with

    Inventory-Location structure (Kitchen-TV, Den-TV, Bedroom-TV)?

  12. 12 Posted by dwg on 17 Jan, 2022 08:03 PM

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    dtd's approach is just using the description/memo fields to describe the assets, for a report you can just print the transaction, this saves messing with categories for each item and is more like what an inventory list would look like.

  13. 13 Posted by dtd on 17 Jan, 2022 09:43 PM

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    just a user -

    As dwg said, the idea here is to create what you are asking for - keeping a household inventory for insurance purposes. And that does involve an inventory and a valuation.

    If you don't want a location structure (which I made simply because that's how my mind works - I think about what is in each room), you could instead use a functional description structure - it's just a matter of choice.

    So going with functional description, the structure could be:

    Household Inventory
         TVs/Appliances
         Furniture
         Computers/Electronics
         Clothing

    Such a structure might work better for you, based on how you perceive your household inventory (or anything else for that matter - Cars, Home value, etc.)

  14. 14 Posted by alkaprose on 19 Jan, 2022 06:29 PM

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    I have tried to make this work. Unfortunately, I use a nested category structure for certain categories (which allows me to group like expenditures together), which resulted in duplicate categories:

    Health
      Dental
      Equipment
      Health Insurance

    Changing to:

    Health
      Dental
      Health Insurance

    Inventory
      Health
        Equipment

    I do appreciate your wrestling with this problem. I hope I do not sound like I am whining.

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