I see that article as nothing more than a suggested approach. It may suit it may not.
You can always use an accounting approach and set up an asset account and pass revaluation entries through this account to revalue the asset. The loan account would remain separate as it reflects a specific liability and your equity is a calculated value between the asset and Liability accounts. An income and expense report with just these two accounts select should give you this.
Property taxes should not effect the asset account as they are an expense item.
The suggested approach seems to me to just offer a simplified approach to tracking the value and for many that could prove to be sufficient.
But do you know if there a way in the asset account to keep track of the current value or appreciation/depreciation separate from the acquisition value? That's the part I can't find. Do I have to change the initial value? That way I'd lose track of the potential gains.
There is a bit of an issue if you use cost accounting as a principle,
when revaluing assets. There is no firm basis for the calculation, and
you may over-inflate the value of the asset.
But if you want to do it, I can tell you how I have done it, in the
past, mainly because one could sell an asset for more than its cost. Or,
in recasting the mortgage, you may realize a increase in equity
(compliments of your friendly bank thinking the property is worth more).
I set up an equity sub-account to the asset account for the home. It has
other sub-accounts for capital improvements, mortgage (loan), and
closing costs. Other than the equity sub-account, the other accounts are
affected by purchase, or expenses that are capitalized on a cash-basis.
For equity (increase or decrease), I use a contra account (of a few
contra-accounts relating to this asset, to a) increase (decrease) the
"stated value" of the asset by an increase in "equity" (for the net
worth statement and (2) the contra account tells me how much, and when I
increased the "equity". I never increase the value of the asset account
directly because, as you stated, I may lose track of the initial value.
I believe what scp is talking about is using Moneydance's ability to have child and parent accounts.
A house account would be setup as a parent, then accounts for cost price, revaluations etc are setup as sub accounts of the parent House account. thus the rolled up house account shows the current value and the sub accounts the component parts.