"masai_chadi" <masai_chadi[at]hotmail.com> wrote in message
newsp.s4vbopqci5m69x[at]chets.gv.shawcable.net...
- quote -

Refer to Dick's FAQ at http://umpmfaq.info/faqdb.php?cat=23#Q86, looking
particularly at the last paragraph in the question titled "I just refinanced
my mortgage; how do I enter all of this into Money?". That answer refers to
a complicated way of transferring assets and liabilities (including cash,
trade-ins, or loan payoffs) into a loan to account for trade-ins,
depreciation, etc.

The answer on Dick's FAQ page refers to a mortgage, but a loan is a loan and
the workarounds are the same. It's potentially complicated but accurately
affects net worth and expenses. After you read that and decide you want to
proceed (or not), post back.
--
Chris Cowles
Gainesville, FL

Comments inline.

"masai_chadi" <masai_chadi[at]hotmail.com> wrote in message
newsp.s4vbopqci5m69x[at]chets.gv.shawcable.net...
- quote -

No. It's money transferred from Asset account--this account now has less of
your net worth, indeed, it has no value at all--to the bank account--that's
where the net worth went. You converted net worth from the asset to
cash--thus the transfer and its direction.

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See above.

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The payments are not against the asset account. They reduce the liability of
the loan. Think of the Asset account and the Loan account as opposite sides
of the same coin. You now own a vehicle. That adds net worth. You now have a
liability remaining to pay for most of it. That subtracts net worth.

"Chris Cowles" <spam_magnet[at]remove-me-bellsouth.net> wrote in message
news:ubDs$q%23LGHA.4052[at]TK2MSFTNGP15.phx.gbl...
- quote -

Answering myself 2006 (and maybe earlier) has a simple wizard to update the
value.

So correct my accounting (not trcking depreciation) I should:

1. remove the opening balance from Car Asset account
2. Adjust my downpayment to show transfer of money from Bank Account to
Car Asset
3. Loan payments are currently tracked in Loan Account
4. Record Sell as money received into Bank Account; and also into Car
Asset.

Now, what I donot understand is how do I record sell to show money
deposited into my bank account and at the same time enter into Car Asset -
without inflating my Net Worth.

Also, how do I show Loan payments against Car Asset account - or do I have
to?

I may be missing some fundamentals of accounting here. Please assist.
Thank you.

Masai

On Sat, 11 Feb 2006 21:07:34 -0800, Dick Watson
<littlegreengecko[at]mind-enufalready-spring.com> wrote:

- quote -



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"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:eHmNd%239LGHA.2828[at]TK2MSFTNGP12.phx.gbl...
- quote -

As a combination of the two, I'd say to capitalize all outlays associated
with initial acquisition of the asset, then expense the depreciation at
whatever frequency you want. I do that annually by marking the asset down to
whatever www.nadaguides.com tells me it's worth at the time, expensing the
difference as depreciation.

If I were more obsessed, I'd probably do that once at purchase, to reflect
the value loss of driving it away, as you point out.

You are probably correct in a GAAP world. In a personal accounting world, I
can't see why. The asset value shrinks 20% the day you drive it off the lot.
Why make matters look even worse? In the personal world there really is no
need to figure the depreciation schedule and there is no requirement to
amortize these costs over a predictable life--besides, you may have the car
15 years or you may total it next week, who can say when you first get
it?--I can't see a reason to sweat it.

But as is typical with Money, there is not a single correct answer as to how
to account for things.

"Chris Cowles" <spam_magnet[at]remove-me-bellsouth.net> wrote in message
news:OK$NZx9LGHA.2912[at]tk2msftngp13.phx.gbl...
- quote -

"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:OASa%23J5LGHA.2472[at]TK2MSFTNGP11.phx.gbl...
- quote -

Aren't the fees and taxes part of initial asset purchase? Yes, they have no
inherent value, but should they not be amortized over the predictable life
of the asset, included as part of putting the asset into service? (I'm
talking GAAP or quasi-GAAP here, not personal accounting.)
--
Chris Cowles
Gainesville, FL

Let me try a more responsive answer to what it sounds like you've already
done.

The asset account should not have had an opening balance. It's balance
should have been transferred from the purchase transaction--the price you
paid, but not the fees and taxes and so forth which should be expensed. Some
of the purchase transaction is offset with the loan proceeds received. The
interest costs on the loan are part of the cost of ownership, but the
principal isn't. It just reduces your liability. The purchase cost (down
payment) is not an expense if you are treating the vehicle as an asset. You
should have transferred the amount into the asset account as noted above. At
the sale, you transfer the proceeds back to one of your cash accounts when
you sell the vehicle. The remaining balance in the asset account should now
be expensed (Automobileepreciation?).

"masai_chadi" <masai_chadi[at]hotmail.com> wrote in message
newsp.s4uameq7i5m69x[at]chets.gv.shawcable.net...
- quote -

When I buy the car, I record the whole cost as Automobile:Payments and then
record the loan proceeds as Other Income:Loan Proceeds. When I sell the car,
I credit the expense category Automobile:Payments. The net is the cost
associated with depreciation. I classify all auto expenses (e.g.,
Insurance:Automobile classified as Automobile:CR-V) so I can see all costs
associated with the CR-V by reporting on that classification. Obviously, if
you have not been doing something like that on all the transactions from the
beginning, it will be hard now to get the true cost of owning and operating
the car. Beyond that caveat, I'd customize a Transactions by Category report
to get this information.

I do not use an Asset account for the car.

If you transferred the entire purchase cost to the asset, then you can now
transfer out what you can sell it for. The difference--remaining balance in
the asset account--is what you have to write off as part of the cost of
ownership.

"masai_chadi" <masai_chadi[at]hotmail.com> wrote in message
newsp.s4uameq7i5m69x[at]chets.gv.shawcable.net...
- quote -

I had bought a car 4 years ago on loan and some downpayment. And recently
I sold it. I had the following accounts setup in Money 2004 Delux:

1. Car Asset with only Opening Balance of $30,000
2. Car Loan account which tracked Principal and Interest amounts (the
loan is fully paid)
3. Auto category as Expense category with sub categories such as Purchase
Cost (downpayment), Fuel costs, Insurance, etc. All car expenses were
tracked under one of these sub categories.

I would like to record the sell of the car. Where would I record it and
how would I categorize so that I can get a 'true' report of the cost of
the car (including operating costs). Which report will provide me this
information?

Thanks.

Masai

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