How should I enter values on a budget in gnucash ?

Discussion:

Geert Janssens

2017-03-01 10:30:59 UTC

Background of my question: recently someone proposed a fix for the gnucash
budget balance sheet report [1] because it was showing incorrect values
(according to the poster).

As budgetting is an area of gnucash I'm not at all familiar with all, I'm
having trouble estimating whether the patch submitter really did discover a
bug and the fix is valid, or whether he is using the budget feature
incorrectly.

My question is simply this:
I want to budget a repayment of a credit card (from my bank account).

How should I enter this in a budget:
Bank: 100.00-
Credit card: 100.00-

Or
Bank: 100.00-
Credit card: 100.00(+)

I would expect the latter as I think transactions need to balance. However the
other person expects the former.

I've read the gnucash documentation which is unfortunately not showing any
example or detail in this regard.

In addition there's an outstanding bug report [2] with the exact same request,
so answering this here, would solve two problems at once :)

Thanks,

Geert

[1] https://github.com/Gnucash/gnucash/pull/120
[2] https://bugzilla.gnome.org/show_bug.cgi?id=689754
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

David T. via gnucash-user

2017-03-01 12:10:44 UTC

Permalink

Post by Geert Janssens
Background of my question: recently someone proposed a fix for the gnucash
budget balance sheet report [1] because it was showing incorrect values
(according to the poster).
As budgetting is an area of gnucash I'm not at all familiar with all, I'm
having trouble estimating whether the patch submitter really did discover a
bug and the fix is valid, or whether he is using the budget feature
incorrectly.
I want to budget a repayment of a credit card (from my bank account).
Bank: 100.00-
Credit card: 100.00-
Or
Bank: 100.00-
Credit card: 100.00(+)
I would expect the latter as I think transactions need to balance. However the
other person expects the former.
I've read the gnucash documentation which is unfortunately not showing any
example or detail in this regard.
In addition there's an outstanding bug report [2] with the exact same request,
so answering this here, would solve two problems at once :)
Thanks,
Geert
[1] https://github.com/Gnucash/gnucash/pull/120
[2] https://bugzilla.gnome.org/show_bug.cgi?id=689754
_______________________________________________
gnucash-user mailing list
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

Geert,

I’ll begin by saying I may misunderstand the original problem, but when I look at the Budget Balance report, I frankly think that it is screwed up in more significant ways than how it represents liabilities.

As to the original problem, I think there is a disconnect between how the budget features operate, and how the rest of the application operates, which the bug hints at. In reference to the comments on the pull request, I turned off Preferences->Reverse Signs, and looked at the results of both the CoA and Budget info. What I noticed: the Budget values *don’t* change with the preference, but the report and the CoA *do* change. In other words, if I change the preference to reverse Income & Expense accounts, the CoA reflects this (i.e, they both display as positive values), but the values in the budget seemingly remain as originally calculated, with negative values. I am not clear on what exactly is happening, because the report seems to still work, even though the budget numbers retain their original values. If I recalculate the budget numbers, however, they take on (and keep) the current signs. The report continues to behave consistently, regardless of the sign displayed in the budget. So, it is not clear whether one should enter a negative value (reduce the liability by entering a negative number in the budget) or a positive one.

So, it seems to me that it is perhaps very understandable that a user would receive confusing results. It is not clear to me what the resolution is, except to say that the current situation is highly confusing.

Be all that as it may, the report itself is fundamentally troubling for me. For starters, which accounts is it including, and for what purpose? When I run this report, I get a listing of every account in my file—regardless of whether accounts are hidden, empty, zero balance, or part of the budget. It would seem to me that the Budget Balance Sheet would only include accounts that the user has designated in the underlying budget. This is not helped by the fact that the options to exclude zero balance/zero value accounts doesn’t seem to work.

Next, it is very difficult to determine that this report apparently is tallying up the numbers from the budget entries. At least, based on the liability account that I was using to examine this bug’s behavior, that’s what it seems to do. I don’t know for sure, however, because none of the other numbers seem to match from the budget the the report. Confusing the matter is the fact that values turn up for accounts without budget numbers—in my case, the report includes commodity holdings info, even though they are not part of the budget. So, it is anyone’s guess what the report actually includes.

David
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply

Edward Doolittle

2017-03-01 19:48:39 UTC

Permalink

On 1 March 2017 at 06:10, David T. via gnucash-user <

Post by Geert Janssens

Post by Geert Janssens
I want to budget a repayment of a credit card (from my bank account).
Bank: 100.00-
Credit card: 100.00-
Or
Bank: 100.00-
Credit card: 100.00(+)
I would expect the latter as I think transactions need to balance.

However the

Post by Geert Janssens
other person expects the former.
I've read the gnucash documentation which is unfortunately not showing

any

Post by Geert Janssens
example or detail in this regard.

I’ll begin by saying I may misunderstand the original problem, but when I
look at the Budget Balance report, I frankly think that it is screwed up in
more significant ways than how it represents liabilities.
As to the original problem, I think there is a disconnect between how the
budget features operate, and how the rest of the application operates,
which the bug hints at.

I think the root of the problem is that there is a disconnect between the
concept of budgeting and the concept of double entry accounting.

In double entry accounting we think in terms of transactions, or transfers
between two accounts, e.g., Income:Taxable:Salary and
Assets:Current:Chequing. If there are n different accounts, there are
approximately n^2 (actually n(n-1)) different "two leg" kinds of transfers,
and actually many more possibilities when we think about split
transactions. We can project sets of such transactions into the future;
let's call a set of such projections an n^2 budget system.

In budgeting, at least the budgeting with which I'm familiar, we think in
terms of "money coming in" and "money going out". If there are n accounts,
we only have 2n different kinds of budget actions (say, out of
Income:Taxable:Salary, or into Assets:Current:Chequing). Let's call this a
2n budget system.

It should be clear that the two conceptions are fundamentally different.
Adding budgeting features to gnc has shoehorned the latter framework into
the former, which is the source of some confusion.

In the past, I have tried to budget in the latter fashion, thinking mainly
about the activity in my chequing account, which is where most of the
day-to-day action happens for me. However, last year I started an
experiment in which I try to project all n^2 types of transfers using a
fairly comprehensive set of scheduled transfers which I create 366 days in
advance. I like it much better than 2n budgeting (e.g., I can get a fairly
accurate balance sheet projection by running a balance sheet at some day in
the future, and I get early warning of cash flow issues). However, it is
not for everyone: it is complicated to set up, and sometimes my estimated
future transactions creep through the present and into the past if I don't
stay on top of things (though marking such transactions as "(Estimate)"
helps me to find them and fix them; it would be nice to have a report which
stores a search for past transactions containing "(Estimate)" in the
description). I wrote a longish message about my experiences with this
system some time ago.

This year I wanted to combine more traditional 2n budgeting with my n^2
system of projections because sometimes I have a need to share my budget
with others (spouse, financial planners), who are expecting to see a
traditional 2n budget. I tried the gnc budgeting features, with the hope of
combining them with my n^2 budget system. I ran into a few problems:

1) The budget report slowed down my entire Windows 10 computer. Something
is wrong with the graphical part of the budget display on Windows. I
haven't noticed the same problem on Mac or Linux. Others have reported
similar experiences in the mailing list. I hope to find the time to
investigate the problem more thoroughly.

2) There seems to be a bug in the budget report which causes it to barf on
one of my credit cards. I haven't found the time to nail down the problem
in any more detail, but again I hope to. I might also try Phil Longstaff's
budget report, which may work around problem 1) as well.

3) It is not immediately clear how to reconcile the n^2 and 2n conceptions
of budgeting.

I have been trying to sort out problem 3), which is related to the
following:

So, it is not clear whether one should enter a negative value (reduce the

Post by Geert Janssens
liability by entering a negative number in the budget) or a positive one.
So, it seems to me that it is perhaps very understandable that a user
would receive confusing results. It is not clear to me what the resolution
is, except to say that the current situation is highly confusing.
Be all that as it may, the report itself is fundamentally troubling for
me. For starters, which accounts is it including, and for what purpose?
When I run this report, I get a listing of every account in my
file—regardless of whether accounts are hidden, empty, zero balance, or
part of the budget. It would seem to me that the Budget Balance Sheet would
only include accounts that the user has designated in the underlying
budget. This is not helped by the fact that the options to exclude zero
balance/zero value accounts doesn’t seem to work.
Next, it is very difficult to determine that this report apparently is
tallying up the numbers from the budget entries. At least, based on the
liability account that I was using to examine this bug’s behavior, that’s
what it seems to do. I don’t know for sure, however, because none of the
other numbers seem to match from the budget the the report. Confusing the
matter is the fact that values turn up for accounts without budget
numbers—in my case, the report includes commodity holdings info, even
though they are not part of the budget. So, it is anyone’s guess what the
report actually includes.

Let me propose the following "story" to make sense of the connection
between the n^2 and 2n viewpoints. We imagine a single new virtual account,
and we take any (two leg) transaction and put the virtual account in the
middle of the transaction. (Multi-split transactions can be conceptually
broken down into a series of two-split transactions.) The net effect on
this virtual account is 0 for any transaction, so technically we don't have
to keep track of the balance in this virtual account. However, we can
consider the net effect on any subset of the n real accounts (as we would
if we were making a transaction report).

In this view, income has a positive effect on the virtual account and
expense has a negative effect on the virtual account; furthermore deposit
to an asset has a negative effect, withdrawal from an asset has a positive
effect, paying down a loan has a negative effect, and taking a loan has a
positive effect. (The language of debits and credits also makes sense here,
if we view the virtual account as an asset account.) I propose that the
signs in the budget and budget report follow those conventions.

Typically personal budgets are said to include only income and expense.
(But a great source of confusion is thinking of loan payments as expense in
the traditional budget point of view, when they're really mostly a
transfer.) If we do that, we will (hopefully) accumulate a positive amount
in the virtual account, "retained earnings", which will in actuality end up
either in an asset account or paying down a liability or both. Those with a
need or desire to keep more detailed track of assets and liabilities should
be able to, but ignoring them should also result in a usable budget.

(Personally, I find it helpful to include in my budget asset and liability
accounts which are involved in one-way transfers; e.g., my savings,
investments, and loan accounts are one-way on the scale of a year: there is
a nontrivial net change in the value of the account over a year; on the
other hand, my chequing account and revolving credit accounts are not one
way, so I don't include them in the budget.)

The budget estimator tool can be coupled with the n^2 projection system to
turn it into a 2n budget; with that, I can make a conventional budget from
my n^2 projection system with very little effort. Very nice.

Another set of issues needs to be considered: what to do with hierarchies
of accounts. E.g., if we ignore one account in our budget, what does that
say about what we should do with its parent or children? Conversely if we
estimate one account in our budget, what should we do with its parent or
children? My understanding is that currently there's a single crude option
in the budget to either "roll up" amounts or not, but I struggled with it.
I think that feature needs to be clarified.

That, I hope, is a start to sorting out the budget mess. I actually think
that the existing system is close to working well, but it does need some
tweaks.
--
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2

« Toutes les fois que je donne une place vacante, je fais cent mécontents
et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Rep

Geert Janssens

2017-03-03 10:41:44 UTC

Permalink

Post by Edward Doolittle

Post by David T. via gnucash-user
As to the original problem, I think there is a disconnect between how the
budget features operate, and how the rest of the application operates,
which the bug hints at.

I think the root of the problem is that there is a disconnect between the
concept of budgeting and the concept of double entry accounting.

<snip> (defining n^2 vs 2n budgetting)

Post by Edward Doolittle
It should be clear that the two conceptions are fundamentally different.
Adding budgeting features to gnc has shoehorned the latter framework into
the former, which is the source of some confusion.
In the past, I have tried to budget in the latter fashion, thinking mainly
about the activity in my chequing account, which is where most of the
day-to-day action happens for me.

I presume you only budgeted one leg of the transactions then. Only what
happens in the checking account ?

Post by Edward Doolittle
However, last year I started an
experiment in which I try to project all n^2 types of transfers using a
fairly comprehensive set of scheduled transfers which I create 366 days in
advance. I like it much better than 2n budgeting (e.g., I can get a fairly
accurate balance sheet projection by running a balance sheet at some day in
the future, and I get early warning of cash flow issues). However, it is
not for everyone: it is complicated to set up, and sometimes my estimated
future transactions creep through the present and into the past if I don't
stay on top of things (though marking such transactions as "(Estimate)"
helps me to find them and fix them; it would be nice to have a report which
stores a search for past transactions containing "(Estimate)" in the
description). I wrote a longish message about my experiences with this
system some time ago.

This sounds like you implemented this budget using scheduled transactions
instead of using the budget features. If so I'll ignore this for the current
discussion as it's not getting me closer to an answer on my original question
which could be generalized to "should budgeting follow the same signedness as
the CoA"? Should signs be reversed as set by the Reverse Signs preference ? So
far I'm inclined to think it should but doesn't properly. It would help avoid
confusion IMO.

Post by Edward Doolittle
This year I wanted to combine more traditional 2n budgeting with my n^2
system of projections because sometimes I have a need to share my budget
with others (spouse, financial planners), who are expecting to see a
traditional 2n budget. I tried the gnc budgeting features, with the hope of
1) The budget report slowed down my entire Windows 10 computer. Something
is wrong with the graphical part of the budget display on Windows. I
haven't noticed the same problem on Mac or Linux. Others have reported
similar experiences in the mailing list. I hope to find the time to
investigate the problem more thoroughly.

That would be great. If you do find more clues, please do report your
findings.

Post by Edward Doolittle
2) There seems to be a bug in the budget report which causes it to barf on
one of my credit cards. I haven't found the time to nail down the problem
in any more detail, but again I hope to. I might also try Phil Longstaff's
budget report, which may work around problem 1) as well.
3) It is not immediately clear how to reconcile the n^2 and 2n conceptions
of budgeting.

Unfortunately I won't be of much help here. I'm still trying to understand the
very basics of how budgeting is supposed to work.

Geert
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

Geert Janssens

2017-03-03 10:25:18 UTC

Permalink

Post by David T. via gnucash-user

Post by Geert Janssens
Background of my question: recently someone proposed a fix for the gnucash
budget balance sheet report [1] because it was showing incorrect values
(according to the poster).
As budgetting is an area of gnucash I'm not at all familiar with all, I'm
having trouble estimating whether the patch submitter really did discover a
bug and the fix is valid, or whether he is using the budget feature
incorrectly.
I want to budget a repayment of a credit card (from my bank account).
Bank: 100.00-
Credit card: 100.00-
Or
Bank: 100.00-
Credit card: 100.00(+)
I would expect the latter as I think transactions need to balance. However
the other person expects the former.
I've read the gnucash documentation which is unfortunately not showing any
example or detail in this regard.
In addition there's an outstanding bug report [2] with the exact same
request, so answering this here, would solve two problems at once :)
Thanks,
Geert
[1] https://github.com/Gnucash/gnucash/pull/120
[2] https://bugzilla.gnome.org/show_bug.cgi?id=689754
_______________________________________________
gnucash-user mailing list
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

David,

I think this is the first bug in budgets. The current behavior is already
inconsistent. And it would be backwards IMO to attempt to fix reports to line
up with this inconsistency.

As you note existing budget values are not responding to changes in the
Reverse Signs preference, but autofilling the budget with estimates is. This
should be made consistent IMO.

So either budgets always use a fixed sign for each category or they use the
signs as used on the CoA for each category. Personally I would opt for the
second option as that would make all of gnucash more consistent. But as I
don't use budgets, I may estimate this completely wrongly.

I'll also note you have reported a very related bug [1] last year though it
only focuses on the sign behavior of the expenses.

And finally your bug report also hints a the fact this issue equally extends
to the totals calculations. It seems to make similarly hard-coded assumptions
about which sign each category is supposed to have.

Post by David T. via gnucash-user
So, it seems to me that it is perhaps very understandable that a user would
receive confusing results. It is not clear to me what the resolution is,
except to say that the current situation is highly confusing.

Yes absolutely.

Post by David T. via gnucash-user
Be all that as it may, the report itself is fundamentally troubling for me.
For starters, which accounts is it including, and for what purpose? When I
run this report, I get a listing of every account in my file—regardless of
whether accounts are hidden, empty, zero balance, or part of the budget. It
would seem to me that the Budget Balance Sheet would only include accounts
that the user has designated in the underlying budget. This is not helped
by the fact that the options to exclude zero balance/zero value accounts
doesn’t seem to work.

I suppose the answer to this depends on the answer to your next question: what
is this report intended for ?

Post by David T. via gnucash-user
Next, it is very difficult to determine that this report apparently is
tallying up the numbers from the budget entries. At least, based on the
liability account that I was using to examine this bug’s behavior, that’s
what it seems to do. I don’t know for sure, however, because none of the
other numbers seem to match from the budget the the report. Confusing the
matter is the fact that values turn up for accounts without budget
numbers—in my case, the report includes commodity holdings info, even
though they are not part of the budget. So, it is anyone’s guess what the
report actually includes.

I suppose the original writer knows the original intention. But your guess is
as good as mine...

Geert

[1] https://bugzilla.gnome.org/show_bug.cgi?id=762167
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can

Edward Doolittle

2017-03-08 08:30:25 UTC

Permalink

Hello Geert, David T., Everyone,

I had a chance to spend a few minutes with the budget module, to try to
make sense of the signs.

First, Here's what I expect: With Edit -> Preferences -> Accounts ->
Reverse Balanced accounts set to "None", I would expect positive values in
the budget to correspond to debits. With Edit -> Preferences -> Accounts ->
Reverse Balanced accounts set to "Credit accounts", I would expect positive
values in Assets and Expenses to correspond to debits, and positive values
in Equity, Income, and Liabilities to correspond to credits.

What actually happens: The budget module appears to be insensitive to the
Reversed Balanced accounts setting. However, its operation does correspond
to "reverse credit accounts"; to be specific, positive amounts entered into
Assets or Expenses correspond to debits, and positive values in Income or
Liabilities correspond to credits.

(See attached screen shot, in which (for the first six months of the budget
I chose a pair of account types and entered +100 into the corresponding
spaces in the budget. You can see that +100 corresponds to a debit for
debit accounts and a credit for credit accounts.)

To answer Geert's original question, to pay down a debt using an asset you
would enter -100 in the asset account (credit the asset) and -100 in the
liability account (debit the liability). That is how the budget module
would represent that transaction, and how folks using the "reverse credit
accounts" feature would understand it to be.

For those who prefer setting "Reverse Balanced accounts" to "None", Geert's
suggestion of representing the transaction by -100 to assets and +100 to
liabilities would be correct. But those people would be in the minority I
suppose.

What is still wrong with the budget module:

1) The module should be sensitive to the setting of "Reverse balanced
accounts". It currently does not seem to be, that I could tell.

2) The "Transfers" summary line shows the net effect of budgeting amounts
to assets and liabilities. However, the transfers line is like a debit
account, which causes the sign to switch in a disconcerting way when
liabilities are budgeted. (See months 5 and 6, i.e., July and August, in
the screenshot.) I suggest breaking the Transfers line apart into Assets
and Liabilities, or, at least, showing the formula by which it is computed
in the row title (i.e., "Transfers (Transfers to Assets - Transfers from
Liabilities)" (that is, if "reverse credit accounts" is in effect)).

However, there's no reason to assume that an entry of type "Transfers"
would be like a debit account, so instead I suggest it would be better to
get rid of the "Transfers" summary line altogether and instead include
separate lines for "Transfers to Assets" and "Transfers from Liabilities".

(To compound the issue, the Total line seems to be a credit account, of
type Equity perhaps, which can cause a sign to bounce twice as we follow it
through. +100 in Liabilities becomes -100 in the Transfers summary line
which becomes +100 in the Total summary line.)

3) The Total row title should include the formula by which it is
calculated, i.e., (when "reverse credit accounts" is in effect) the row
title should be "Total (Income - Expenses - Transfers to Assets + Transfers
from Liabilities)".

4) Since the use of negative signs in Liabilities is confusing to many
people, this all should be carefully documented somewhere.

5) Note there is something odd happening in the last four months of my
artificial budget when I involve "Equity". I think this means that we
should think about the Total row in the budget as a credit account of type
Equity, so transfers to/from Equity have no effect on the Total. Still, it
seems kind of odd. I would suggest including Equity in the summary rows at
the bottom (Transfers from Equity) and in the Total, which would then be
"Total (Income - Expenses - Transfers to Assets + Transfers from
Liabilities + Transfers from Equity)".

6) There seem to be some other problems with the budget module that not
everyone has. The budget module eats up a lot of compute cycles on my
Windows machine, making it very slow to respond to typing, but not on my
Mac. And I have trouble with one of my credit cards not being rolled up
into the total Liabilities correctly. I'll have to spend some more time
tracking those problems down.

7) I haven't begun to address the budget reports, but the budget balance
sheet does seem to be wrong, as Larry and others have noted.

Edward

On 1 March 2017 at 06:10, David T. via gnucash-user <

Post by Geert Janssens

Post by Geert Janssens
Background of my question: recently someone proposed a fix for the

gnucash

Post by Geert Janssens
budget balance sheet report [1] because it was showing incorrect values
(according to the poster).
As budgetting is an area of gnucash I'm not at all familiar with all, I'm
having trouble estimating whether the patch submitter really did

discover a

Post by Geert Janssens
bug and the fix is valid, or whether he is using the budget feature
incorrectly.
I want to budget a repayment of a credit card (from my bank account).
Bank: 100.00-
Credit card: 100.00-
Or
Bank: 100.00-
Credit card: 100.00(+)
I would expect the latter as I think transactions need to balance.

However the

Post by Geert Janssens
other person expects the former.
I've read the gnucash documentation which is unfortunately not showing

any

Post by Geert Janssens
example or detail in this regard.
In addition there's an outstanding bug report [2] with the exact same

request,

Post by Geert Janssens
so answering this here, would solve two problems at once :)
Thanks,
Geert
[1] https://github.com/Gnucash/gnucash/pull/120
[2] https://bugzilla.gnome.org/show_bug.cgi?id=689754
_______________________________________________
gnucash-user mailing list
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

Geert,
Iâll begin by saying I may misunderstand the original problem, but when I
look at the Budget Balance report, I frankly think that it is screwed up in
more significant ways than how it represents liabilities.
As to the original problem, I think there is a disconnect between how the
budget features operate, and how the rest of the application operates,
which the bug hints at. In reference to the comments on the pull request, I
turned off Preferences->Reverse Signs, and looked at the results of both
the CoA and Budget info. What I noticed: the Budget values *donât* change
with the preference, but the report and the CoA *do* change. In other
words, if I change the preference to reverse Income & Expense accounts, the
CoA reflects this (i.e, they both display as positive values), but the
values in the budget seemingly remain as originally calculated, with
negative values. I am not clear on what exactly is happening, because the
report seems to still work, even though the budget numbers retain their
original values. If I recalculate the budget numbers, however, they take on
(and keep) the current signs. The report continues to behave consistently,
regardless of the sign displayed in the budget. So, it is not clear whether
one should enter a negative value (reduce the liability by entering a
negative number in the budget) or a positive one.
So, it seems to me that it is perhaps very understandable that a user
would receive confusing results. It is not clear to me what the resolution
is, except to say that the current situation is highly confusing.
Be all that as it may, the report itself is fundamentally troubling for
me. For starters, which accounts is it including, and for what purpose?
When I run this report, I get a listing of every account in my
fileâregardless of whether accounts are hidden, empty, zero balance, or
part of the budget. It would seem to me that the Budget Balance Sheet would
only include accounts that the user has designated in the underlying
budget. This is not helped by the fact that the options to exclude zero
balance/zero value accounts doesnât seem to work.
Next, it is very difficult to determine that this report apparently is
tallying up the numbers from the budget entries. At least, based on the
liability account that I was using to examine this bugâs behavior, thatâs
what it seems to do. I donât know for sure, however, because none of the
other numbers seem to match from the budget the the report. Confusing the
matter is the fact that values turn up for accounts without budget
numbersâin my case, the report includes commodity holdings info, even
though they are not part of the budget. So, it is anyoneâs guess what the
report actually includes.
David
_______________________________________________
gnucash-user mailing list
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

--
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2

Â« Toutes les fois que je donne une place vacante, je fais cent mÃ©contents
et un ingrat. Â»
-- Louis XIV, dans Voltaire, Le SiÃšcle de Louis XIV, Chap. XXVI

Geert Janssens

2017-03-30 09:40:34 UTC

Permalink

Edward,

Thanks for the detailed summary of your tests. I have created a bug report based on this:
https://bugzilla.gnome.org/show_bug.cgi?id=780717

Further discussion can take place there if needed.

Regards,

Geert

On woensdag 8 maart 2017 09:30:25 CEST Edward Doolittle wrote:

I had a chance to spend a few minutes with the budget module, to try to make sense of the
signs. First, Here's what I expect: With Edit -> Preferences -> Accounts -> Reverse Balanced
accounts set to "None", I would expect positive values in the budget to correspond to debits.
With Edit -> Preferences -> Accounts -> Reverse Balanced accounts set to "Credit accounts", I
would expect positive values in Assets and Expenses to correspond to debits, and positive
values in Equity, Income, and Liabilities to correspond to credits. What actually happens: The
budget module appears to be insensitive to the Reversed Balanced accounts setting. However,
its operation does correspond to "reverse credit accounts"; to be specific, positive amounts
entered into Assets or Expenses correspond to debits, and positive values in Income or
Liabilities correspond to credits. (See attached screen shot, in which (for the first six months of
the budget I chose a pair of account types and entered +100 into the corresponding spaces in
the budget. You can see that +100 corresponds to a debit for debit accounts and a credit for
credit accounts.) To answer Geert's original question, to pay down a debt using an asset you
would enter -100 in the asset account (credit the asset) and -100 in the liability account (debit
the liability). That is how the budget module would represent that transaction, and how folks
using the "reverse credit accounts" feature would understand it to be. For those who prefer
setting "Reverse Balanced accounts" to "None", Geert's suggestion of representing the
transaction by -100 to assets and +100 to liabilities would be correct. But those people would
be in the minority I suppose. What is still wrong with the budget module: 1) The module should
be sensitive to the setting of "Reverse balanced accounts". It currently does not seem to be,
that I could tell. 2) The "Transfers" summary line shows the net effect of budgeting amounts to
assets and liabilities. However, the transfers line is like a debit account, which causes the sign to
switch in a disconcerting way when liabilities are budgeted. (See months 5 and 6, i.e., July and
August, in the screenshot.) I suggest breaking the Transfers line apart into Assets and Liabilities,
or, at least, showing the formula by which it is computed in the row title (i.e., "Transfers
(Transfers to Assets - Transfers from Liabilities)" (that is, if "reverse credit accounts" is in
effect)). However, there's no reason to assume that an entry of type "Transfers" would be like a
debit account, so instead I suggest it would be better to get rid of the "Transfers" summary line
altogether and instead include separate lines for "Transfers to Assets" and "Transfers from
Liabilities". (To compound the issue, the Total line seems to be a credit account, of type Equity
perhaps, which can cause a sign to bounce twice as we follow it through. +100 in Liabilities
becomes -100 in the Transfers summary line which becomes +100 in the Total summary line.)
3) The Total row title should include the formula by which it is calculated, i.e., (when "reverse
credit accounts" is in effect) the row title should be "Total (Income - Expenses - Transfers to
Assets + Transfers from Liabilities)". 4) Since the use of negative signs in Liabilities is confusing
to many people, this all should be carefully documented somewhere. 5) Note there is something
odd happening in the last four months of my artificial budget when I involve "Equity". I think this
means that we should think about the Total row in the budget as a credit account of type Equity,
so transfers to/from Equity have no effect on the Total. Still, it seems kind of odd. I would
suggest including Equity in the summary rows at the bottom (Transfers from Equity) and in the
Total, which would then be "Total (Income - Expenses - Transfers to Assets + Transfers from
Liabilities + Transfers from Equity)". 6) There seem to be some other problems with the budget
module that not everyone has. The budget module eats up a lot of compute cycles on my
Windows machine, making it very slow to respond to typing, but not on my Mac. And I have
trouble with one of my credit cards not being rolled up into the total Liabilities correctly. I'll have
to spend some more time tracking those problems down. 7) I haven't begun to address the
budget reports, but the budget balance sheet does seem to be wrong, as Larry and others have
noted.

_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

Phil Longstaff

2017-03-30 16:16:46 UTC

Permalink

I am aware of how slow budget entry is and am hoping to do something about
this soon.

Phil

Post by lejohnston
Edward,
https://bugzilla.gnome.org/show_bug.cgi?id=780717
Further discussion can take place there if needed.
Regards,
Geert
I had a chance to spend a few minutes with the budget module, to try to make sense of the
signs. First, Here's what I expect: With Edit -> Preferences -> Accounts
-> Reverse Balanced
accounts set to "None", I would expect positive values in the budget to
correspond to debits.
With Edit -> Preferences -> Accounts -> Reverse Balanced accounts set to
"Credit accounts", I
would expect positive values in Assets and Expenses to correspond to debits, and positive
values in Equity, Income, and Liabilities to correspond to credits. What
actually happens: The
budget module appears to be insensitive to the Reversed Balanced accounts setting. However,
its operation does correspond to "reverse credit accounts"; to be
specific, positive amounts
entered into Assets or Expenses correspond to debits, and positive values in Income or
Liabilities correspond to credits. (See attached screen shot, in which
(for the first six months of
the budget I chose a pair of account types and entered +100 into the
corresponding spaces in
the budget. You can see that +100 corresponds to a debit for debit
accounts and a credit for
credit accounts.) To answer Geert's original question, to pay down a debt
using an asset you
would enter -100 in the asset account (credit the asset) and -100 in the
liability account (debit
the liability). That is how the budget module would represent that
transaction, and how folks
using the "reverse credit accounts" feature would understand it to be. For those who prefer
setting "Reverse Balanced accounts" to "None", Geert's suggestion of representing the
transaction by -100 to assets and +100 to liabilities would be correct.
But those people would
1) The module should
be sensitive to the setting of "Reverse balanced accounts". It currently
does not seem to be,
that I could tell. 2) The "Transfers" summary line shows the net effect of
budgeting amounts to
assets and liabilities. However, the transfers line is like a debit
account, which causes the sign to
switch in a disconcerting way when liabilities are budgeted. (See months 5
and 6, i.e., July and
August, in the screenshot.) I suggest breaking the Transfers line apart
into Assets and Liabilities,
or, at least, showing the formula by which it is computed in the row title
(i.e., "Transfers
(Transfers to Assets - Transfers from Liabilities)" (that is, if "reverse
credit accounts" is in
effect)). However, there's no reason to assume that an entry of type
"Transfers" would be like a
debit account, so instead I suggest it would be better to get rid of the
"Transfers" summary line
altogether and instead include separate lines for "Transfers to Assets" and "Transfers from
Liabilities". (To compound the issue, the Total line seems to be a credit
account, of type Equity
perhaps, which can cause a sign to bounce twice as we follow it through.
+100 in Liabilities
becomes -100 in the Transfers summary line which becomes +100 in the Total summary line.)
3) The Total row title should include the formula by which it is
calculated, i.e., (when "reverse
credit accounts" is in effect) the row title should be "Total (Income -
Expenses - Transfers to
Assets + Transfers from Liabilities)". 4) Since the use of negative signs
in Liabilities is confusing
to many people, this all should be carefully documented somewhere. 5) Note
there is something
odd happening in the last four months of my artificial budget when I
involve "Equity". I think this
means that we should think about the Total row in the budget as a credit
account of type Equity,
so transfers to/from Equity have no effect on the Total. Still, it seems
kind of odd. I would
suggest including Equity in the summary rows at the bottom (Transfers from
Equity) and in the
Total, which would then be "Total (Income - Expenses - Transfers to Assets + Transfers from
Liabilities + Transfers from Equity)". 6) There seem to be some other
problems with the budget
module that not everyone has. The budget module eats up a lot of compute cycles on my
Windows machine, making it very slow to respond to typing, but not on my Mac. And I have
trouble with one of my credit cards not being rolled up into the total
Liabilities correctly. I'll have
to spend some more time tracking those problems down. 7) I haven't begun to address the
budget reports, but the budget balance sheet does seem to be wrong, as
Larry and others have
noted.
_______________________________________________
gnucash-user mailing list
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
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-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

Geert Janssens

2017-03-31 07:04:10 UTC

Permalink

That would be wonderful. While you're at it, would you also have time to look
into the sign reversal issue ? I'm rather unfamiliar with the budget code
myself.

Thanks,

Geert

Post by Phil Longstaff
I am aware of how slow budget entry is and am hoping to do something about
this soon.
Phil
On Thu, Mar 30, 2017 at 5:40 AM, Geert Janssens

Post by lejohnston
Edward,
Thanks for the detailed summary of your tests. I have created a bug report
https://bugzilla.gnome.org/show_bug.cgi?id=780717

lejohnston

2017-03-01 17:48:38 UTC

Permalink

Geert,

I have only been using GNUCash for a month but I am using the Budgeting features.

I do not budget for funds moving between Asset and Liability accounts. I can not see what purpose that would serve.

Perhaps you would budget an Increase in you Savings Account or Retirement (in Canada RRSP) Account, but I am not sure you would budget a
Decrease in your Checking Account. However I deal with this by having an Expense Account called Savings and another called RRSP. In these two cases I have been thinking about starting to use those two Asset Accounts in the budget rather than having Expense Accounts for them. I have not yet thought through how it would work though.

I have been trying to use the Budget Balance Sheet report, but have not found it gives me the information I want. I am not sure if it what I am doing or a problem with the report. I will look at the Archive and see if I can help after I read the posts. I welcome any upgrade to the Budgeting functions as it is the main purpose for using GNUCash.

Larry

Edward Doolittle

2017-03-01 19:57:25 UTC

Permalink

On 1 March 2017 at 11:48, lejohnston <***@dccnet.com> wrote:

I do not budget for funds moving between Asset and Liability accounts. I

Post by lejohnston
can not see what purpose that would serve.

If the transfer is one-way, it will have a significant effect that you
should consider when budgeting. For example, if you have a car loan, the
payment goes one way (partly to pay down the loan, partly as interest
expense). You won't see that money again, at least not in the short term.
So such payments should be considered in your budget.

On the other hand, the net effect on my chequing account after a month's
transactions is approximately zero, so I don't include it in my budget. The
same with my credit cards.

Post by lejohnston
Perhaps you would budget an Increase in you Savings Account or Retirement
(in Canada RRSP) Account, but I am not sure you would budget a
Decrease in your Checking Account. However I deal with this by having an
Expense Account called Savings and another called RRSP. In these two cases
I have been thinking about starting to use those two Asset Accounts in the
budget rather than having Expense Accounts for them. I have not yet thought
through how it would work though.

Gah! I strongly recommend you don't do that. Savings is an asset. RRSP is
an asset or an investment (another kind of asset).

The budget system more or less works now, even for asset and liability
accounts. There is just some confusion about the sign, which is positive or
negative when it should be negative or positive. (Or something like that
:-) )

E
--
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2

« Toutes les fois que je donne une place vacante, je fais cent mécontents
et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your repl

lejohnston

2017-03-01 22:55:20 UTC

Permalink

Edward,

Perhaps this is not the Thread to have this discussion but you raise issues I have been struggling with so I am going to jump in.

I recently moved from Quicken to GNUCash and am starting to feel comfortable here. Through 20 years in Quicken I evolved a budgeting system that worked for me. I never budgeted anything for Asset and Liability Accounts.

When I had a Mortgage I did not set up a Liability Account for the Mortgage or an Asset Account for the House. I did budget a monthly amount for the Mortgage. That worked fine for my budgeting purposes.

I did set up an RRSP Account. Then I budgeted an RRSP expense (i.e. how much I was setting aside each month to put into my RRSP). I can see how this is misleading. For instance if I was putting aside $500/month for the RRSP, that was $500 that I did not have available to spend elsewhere, but it was not really an expense as it was actually a transfer to another Asset Account. At the end of the year when I actually put the $6000 into the RRSP account my budget still showed that I had $6000 unspent and I had to manipulate it before I started the new year. In GNUCash it seems it would be easier to budget $6000 into RRSP and not have the Expense:RRSP account at all. Maybe I could have done the same in Quicken. The way the GNUCash budget is laid out that leapt out at me as a possibility, but I decided to start with what I knew from Quicken.

I am hoping to learn how to use GNUCash better.

Larry

Post by lejohnston
I do not budget for funds moving between Asset and Liability accounts. I can not see what purpose that would serve.

If the transfer is one-way, it will have a significant effect that you should consider when budgeting. For example, if you have a car loan, the payment goes one way (partly to pay down the loan, partly as interest expense). You won't see that money again, at least not in the short term. So such payments should be considered in your budget.
On the other hand, the net effect on my chequing account after a month's transactions is approximately zero, so I don't include it in my budget. The same with my credit cards.

Post by lejohnston
Perhaps you would budget an Increase in you Savings Account or Retirement (in Canada RRSP) Account, but I am not sure you would budget a
Decrease in your Checking Account. However I deal with this by having an Expense Account called Savings and another called RRSP. In these two cases I have been thinking about starting to use those two Asset Accounts in the budget rather than having Expense Accounts for them. I have not yet thought through how it would work though.

Gah! I strongly recommend you don't do that. Savings is an asset. RRSP is an asset or an investment (another kind of asset).
The budget system more or less works now, even for asset and liability accounts. There is just some confusion about the sign, which is positive or negative when it should be negative or positive. (Or something like that :-) )
E
--
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2
« Toutes les fois que je donne une place vacante,
je fais cent mécontents et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI

Edward Doolittle

2017-03-02 00:17:28 UTC

Permalink

On 1 March 2017 at 16:55, lejohnston <***@dccnet.com> wrote:

Perhaps this is not the Thread to have this discussion but you raise issues

Post by lejohnston
I have been struggling with so I am going to jump in.

I'll contribute what I can, but I am no expert, and I've never used
Quicken. Others can correct me and may be able to provide more help to you.

Post by lejohnston
I recently moved from Quicken to GNUCash and am starting to feel
comfortable here. Through 20 years in Quicken I evolved a budgeting system
that worked for me. I never budgeted anything for Asset and Liability
Accounts.

My understanding of Quicken is that it is not a double entry system.
Instead, it has "categories" I think. I have become very comfortable with
double entry, after a few struggles (with which the members of this list
were extraordinarily helpful, thanks again to them). At this point I have
trouble imagining how a non-double entry accounting system would function.
(I guess they call Quicken "personal finance" rather than accounting, which
is one way to temper expectations, I suppose.)

The focus of GnuCash is definitely not budgeting, as you can tell by the
peripheral nature of the budgeting features, but as I mentioned earlier it
more or less works once things have been set up properly.

When I had a Mortgage I did not set up a Liability Account for the Mortgage

Post by lejohnston
or an Asset Account for the House. I did budget a monthly amount for the
Mortgage. That worked fine for my budgeting purposes.

Part of setting up things properly is classifying accounts properly and
doing some initial set-up. At a minimum, you should classify your mortgage
and other debts as liabilities, because that's what they are. Then in your
budget, mortgage payments are transfers to the liability account.

The following may seem somewhat complicated, but your system will work
better if you do it:

Something else you should probably do is set up the interest expense
payments in your mortgage account. They are transfers from the mortgage
account to some expense account corresponding to the amount of interest you
paid each month. (IIRC the tutorial and concepts guide suggests using a
split for each payment, so that part of the payment goes directly to
interest without going into the mortgage account, while the other part of
the payment goes into the mortgage account to reduce the principal.
Personally I find that inconvenient, and it seems to work well for me to
drop the whole payment into the mortgage account and then in a separate
transaction to pay the interest.)

The interest amounts change each month because the principal is declining
(and possibly because the length of time between payments varies slightly
due to variations in the lengths of months and possibly bank holidays), but
you can get a reasonable approximation from an online calculator. You might
be able to download a CSV with the interest payments, but I find it faster
to just enter a year's worth of interest projections by hand each year.
Unless I'm super careful (which I usually am not) the projections are not
100% accurate, so I either fix them when I get a statement of account and
reconcile (best approach), or I put in correction transactions when I
notice a discrepancy (when the bank is being difficult about issuing
statements, grr).

Post by lejohnston
I did set up an RRSP Account. Then I budgeted an RRSP expense (i.e. how
much I was setting aside each month to put into my RRSP). I can see how
this is misleading.

Exactly.

Post by lejohnston
For instance if I was putting aside $500/month for the RRSP, that was $500
that I did not have available to spend elsewhere, but it was not really an
expense as it was actually a transfer to another Asset Account. At the end
of the year when I actually put the $6000 into the RRSP account my budget
still showed that I had $6000 unspent and I had to manipulate it before I
started the new year. In GNUCash it seems it would be easier to budget
$6000 into RRSP and not have the Expense:RRSP account at all.

RRSP is definitely not an expense. (For non-Canadian readers, that is
Registered Retirement Savings Plan, similar to US 401k if I understand
correctly.) It is an asset. (You can access it any time and take the money
back out ... perhaps after paying a significant penalty, that is ... but
it's still yours, so it's not an expense.)

There has been some discussion about the correct "accounting treatment" for
RRSP contributions in this mailing list, but I think some of that
discussion was wildly off the mark and just plain wrong. It seems quite
simple to me, but of course I may be wrong too. My approach to RRSP is just
to treat each RRSP account as an asset (you might have several, some
through banks and others through investment houses; I put my RRSP in the
Investment tree but you could put it under the asset tree too, or put some
RRSP accounts under Assets and others under Investments. OTOH for reporting
purposes it might make sense to put the RRSP accounts all under one subtree
of Investments.) The only really important part of the treatment is that
interest or dividends in an RRSP should come from something like
Income:Non-Taxable:RRSPIncome instead of Income:Taxable:whatever. Capital
gains in an RRSP are also not taxable. It's much simpler than accounting
for an non-registered investment plan. You'll eventually pay tax on amounts
withdrawn from the RRSP (or the corresponding RRIF, Registered Retirement
Income Fund, to which you transfer the funds after you retire), but believe
me, the government will let you know the exact amount to pay when the time
comes; at that time, the tax you pay can go to an Expense:Tax account.

Maybe I could have done the same in Quicken. The way the GNUCash budget is

Post by lejohnston
laid out that leapt out at me as a possibility, but I decided to start with
what I knew from Quicken.

The budget subsystem of GNUCash shouldn't be your guide, as it's an
afterthought and not particularly great. You'll be much better off changing
your frame of reference to double entry accounting. There is a learning
curve, but the payoff is awesome, and the folks on this mailing list are
very knowledgeable and helpful.

You have control over the level of detail you want. So you might just think
of the RRSP account as a blob of money to which you make deposits. But as
you become more skilled with GnuCash you may find that breaking it down
into individual investments is more meaningful and generates more useful
reports. However, I suggest that you keep all old financial statements in
case you decide you want to go back and add more detail to your system at a
later date.

E
--
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2

« Toutes les fois que je donne une place vacante, je fais cent mécontents
et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies

lejohnston

2017-03-02 00:40:40 UTC

Permalink

Edward,

Fortunately I no longer have a mortgage so don't have to deal with that issue.

I redid my budget and accounts in a Test file. As a result my RRSP's as of December 31, 2016 are now shown as Equity. I budgeted $5200 to go into them this year and eliminated the Expense:RRSP account and the $5200 budgeted for it. It all seems to work.

Actually although the budgeting screen is a bit combersome, I find the budgeting in GNUCash to be quite functional. The budget reports on the other hand seem quite hard to use and difficult to get the information I want.

BTW in the Budget Balance Sheet Report I now have Allocated Assets of $5200 and Unallocted Assets of $362 (still don't know where this comes from).

Larry

Post by lejohnston
Perhaps this is not the Thread to have this discussion but you raise issues I have been struggling with so I am going to jump in.

I'll contribute what I can, but I am no expert, and I've never used Quicken. Others can correct me and may be able to provide more help to you.

Post by lejohnston
I recently moved from Quicken to GNUCash and am starting to feel comfortable here. Through 20 years in Quicken I evolved a budgeting system that worked for me. I never budgeted anything for Asset and Liability Accounts.

My understanding of Quicken is that it is not a double entry system. Instead, it has "categories" I think. I have become very comfortable with double entry, after a few struggles (with which the members of this list were extraordinarily helpful, thanks again to them). At this point I have trouble imagining how a non-double entry accounting system would function. (I guess they call Quicken "personal finance" rather than accounting, which is one way to temper expectations, I suppose.)
The focus of GnuCash is definitely not budgeting, as you can tell by the peripheral nature of the budgeting features, but as I mentioned earlier it more or less works once things have been set up properly.

Post by lejohnston
When I had a Mortgage I did not set up a Liability Account for the Mortgage or an Asset Account for the House. I did budget a monthly amount for the Mortgage. That worked fine for my budgeting purposes.

Part of setting up things properly is classifying accounts properly and doing some initial set-up. At a minimum, you should classify your mortgage and other debts as liabilities, because that's what they are. Then in your budget, mortgage payments are transfers to the liability account.
Something else you should probably do is set up the interest expense payments in your mortgage account. They are transfers from the mortgage account to some expense account corresponding to the amount of interest you paid each month. (IIRC the tutorial and concepts guide suggests using a split for each payment, so that part of the payment goes directly to interest without going into the mortgage account, while the other part of the payment goes into the mortgage account to reduce the principal. Personally I find that inconvenient, and it seems to work well for me to drop the whole payment into the mortgage account and then in a separate transaction to pay the interest.)
The interest amounts change each month because the principal is declining (and possibly because the length of time between payments varies slightly due to variations in the lengths of months and possibly bank holidays), but you can get a reasonable approximation from an online calculator. You might be able to download a CSV with the interest payments, but I find it faster to just enter a year's worth of interest projections by hand each year. Unless I'm super careful (which I usually am not) the projections are not 100% accurate, so I either fix them when I get a statement of account and reconcile (best approach), or I put in correction transactions when I notice a discrepancy (when the bank is being difficult about issuing statements, grr).

Post by lejohnston
I did set up an RRSP Account. Then I budgeted an RRSP expense (i.e. how much I was setting aside each month to put into my RRSP). I can see how this is misleading.

Exactly.

Post by lejohnston
For instance if I was putting aside $500/month for the RRSP, that was $500 that I did not have available to spend elsewhere, but it was not really an expense as it was actually a transfer to another Asset Account. At the end of the year when I actually put the $6000 into the RRSP account my budget still showed that I had $6000 unspent and I had to manipulate it before I started the new year. In GNUCash it seems it would be easier to budget $6000 into RRSP and not have the Expense:RRSP account at all.

RRSP is definitely not an expense. (For non-Canadian readers, that is Registered Retirement Savings Plan, similar to US 401k if I understand correctly.) It is an asset. (You can access it any time and take the money back out ... perhaps after paying a significant penalty, that is ... but it's still yours, so it's not an expense.)
There has been some discussion about the correct "accounting treatment" for RRSP contributions in this mailing list, but I think some of that discussion was wildly off the mark and just plain wrong. It seems quite simple to me, but of course I may be wrong too. My approach to RRSP is just to treat each RRSP account as an asset (you might have several, some through banks and others through investment houses; I put my RRSP in the Investment tree but you could put it under the asset tree too, or put some RRSP accounts under Assets and others under Investments. OTOH for reporting purposes it might make sense to put the RRSP accounts all under one subtree of Investments.) The only really important part of the treatment is that interest or dividends in an RRSP should come from something like Income:Non-Taxable:RRSPIncome instead of Income:Taxable:whatever. Capital gains in an RRSP are also not taxable. It's much simpler than accounting for an non-registered investment plan. You'll eventually pay tax on amounts withdrawn from the RRSP (or the corresponding RRIF, Registered Retirement Income Fund, to which you transfer the funds after you retire), but believe me, the government will let you know the exact amount to pay when the time comes; at that time, the tax you pay can go to an Expense:Tax account.

Post by lejohnston
Maybe I could have done the same in Quicken. The way the GNUCash budget is laid out that leapt out at me as a possibility, but I decided to start with what I knew from Quicken.

The budget subsystem of GNUCash shouldn't be your guide, as it's an afterthought and not particularly great. You'll be much better off changing your frame of reference to double entry accounting. There is a learning curve, but the payoff is awesome, and the folks on this mailing list are very knowledgeable and helpful.
You have control over the level of detail you want. So you might just think of the RRSP account as a blob of money to which you make deposits. But as you become more skilled with GnuCash you may find that breaking it down into individual investments is more meaningful and generates more useful reports. However, I suggest that you keep all old financial statements in case you decide you want to go back and add more detail to your system at a later date.
E
--
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2
« Toutes les fois que je donne une place vacante,
je fais cent mécontents et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI

Geert Janssens

2017-03-03 10:51:02 UTC

Permalink

Post by David T. via gnucash-user
Geert,
I have only been using GNUCash for a month but I am using the Budgeting features.
I do not budget for funds moving between Asset and Liability accounts. I can
not see what purpose that would serve.

Whether this is useful or not was not my question ;)

It's a hypothetical example to illustrate an inconsistency in sign handling in
the budget code. I think you can equally produce it using an expense account
and playing with the Reverse Signs global preference.

Post by David T. via gnucash-user
I have been trying to use the Budget Balance Sheet report, but have not
found it gives me the information I want. I am not sure if it what I am
doing or a problem with the report. I will look at the Archive and see if I
can help after I read the posts. I welcome any upgrade to the Budgeting
functions as it is the main purpose for using GNUCash.

As said in earlier replies I don't know either what purpose the report serves
and whether it's successful in that or not.

And it may disappoint you to hear I am currently not working on the budget
feature at all. I started asking questions because we received a fix for that
particular report which I'm not sure is fixing the right problem. I want to
send a proper reply to the contributor of this fix for which I need more
information. But other than that I have currently no time available to work on
budgets. Sorry about that. I do think though this discussion is still worth it
to record as much information as possible in bug reports/enhancement requests
now to allow someone in the future to work on this properly.

Geert
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

lejohnston

2017-03-01 21:13:33 UTC

Permalink

Geert,

I have gone back and made entries in a test file.

First to you question of how to enter the scenerio in the budget: I think both should be positive numbers. The Asset would then cancel the Liability.

Second after making several entries and rerunning the report I still don't know that the report is intended to produce.

Although all of my accounts are highlighted to be included in the report none of the Income or Expense accounts are shown.

When I first ran the report it showed zero in all my Asset and Liability accounts (I had not budgeted anything in them). It did show Existing Assets as Zero (although I actually have several thousand dollars in my Asset accounts) and Unallocated Assets as: $1157 and New Retained Earnings as: $1157. This was at the end of January.

I then entered some data for income and expenses for February and ran the report again. This time the Unallocated Assets were: $362 as were the New Retained Earnings. I could see nothing in my Accounts that accounted for that difference.

Since the report is for the Accounting Period (I see no other options), in my case 2017, I wonder if shows Zero Assets because I had none at the end of 2016 (I started GNUCash as of January 1). I wondered if the report was projecting that I would have more income than I budgeted and that was why it showed Unallocated Assets. I did have more income that I budgeted in January, but not in February. However when I entered more income than I had budgeted for March and reran the report the Unallocated Assets remained at $362.

In my budget I then entered budget amounts for all of my Asset and Liability Acounts. Those amounts then appeared in the report when I reran it. I budgeted a total of $120 in my Asset accounts and $75 in my Liability Accounts. The Report now shows: Allocated Assets: $120, Unallocated Assets: $167, Total Assets: $287. It also shows New Liabilities as: $(75), New Retained Earnings as: $362, New Equity and Total Equity as $362 and Total Equity and Liability as: $287.

All of the above numbers seem to add up. I still don't know where the Unallocated Assets and New Retained Earnings actually come from.

Since I do not know what this report is designed to report and it does not give me any information that I find useful I have stopped using it. However I would still like to understand it.

For my Budgeting purposes Phil L's 'Budget YTD Report' gives me most of the information I need (although there appear to be a couple of bugs, or at least things I don't understand in it).

I hope this helps,

Larry

Geert Janssens

2017-03-03 10:30:56 UTC

Permalink

Post by David T. via gnucash-user
Geert,
I have gone back and made entries in a test file.
First to you question of how to enter the scenerio in the budget: I think
both should be positive numbers. The Asset would then cancel the Liability.

How do you come to this conclusion ?

Post by David T. via gnucash-user
Second after making several entries and rerunning the report I still don't
know that the report is intended to produce.

Unfortunately neither do I and that's why I started asking around. And from
the replies so far it looks like nobody currently really does.

Regards,

Geert
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

Larry

2017-03-03 18:15:40 UTC

Permalink

Sent from my Samsung Galaxy Tab® S

-------- Original message --------
From: Geert Janssens <***@kobaltwit.be>
Date: 2017-03-03 02:30 (GMT-08:00)
To: lejohnston <***@dccnet.com>
Cc: gnucash-***@gnucash.org
Subject: Re: How should I enter values on a budget in gnucash ?

How do you come to this conclusion ?

My budget balances if I do it this way, which is what I expect it should do.

Post by David T. via gnucash-user
Second after making several entries and rerunning the report I still don't
know that the report is intended to produce.

Geert Janssens

2017-03-03 18:41:08 UTC

Permalink

Post by Larry
Sent from my Samsung Galaxy Tab® S
-------- Original message --------
Date: 2017-03-03 02:30 (GMT-08:00)
Subject: Re: How should I enter values on a budget in gnucash ?

How do you come to this conclusion ?
My budget balances if I do it this way, which is what I expect it should do.

A fair conclusion unless it's the code that calculates the totals that's using
the wrong sign assumptions. That's what I'm wondering about.

Geert
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

R. Victor Klassen

2017-03-03 18:55:00 UTC

Permalink

I would expect it to match the income statement in behaviour.

Post by Geert Janssens

Post by Larry
Sent from my Samsung Galaxy Tab® S
-------- Original message --------
Date: 2017-03-03 02:30 (GMT-08:00)
Subject: Re: How should I enter values on a budget in gnucash ?

How do you come to this conclusion ?
My budget balances if I do it this way, which is what I expect it should do.

A fair conclusion unless it's the code that calculates the totals that's using
the wrong sign assumptions. That's what I'm wondering about.
Geert
_______________________________________________
gnucash-user mailing list
https://lists.gnucash.org/mailman/listinfo/gnucash-user <https://lists.gnucash.org/mailman/listinfo/gnucash-user>
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.

lejohnston

2017-03-04 19:56:37 UTC

Permalink

Geert,

I have changed my opinion about how the figures should be entered. Essentially they are budgeting to transfer $100 from checking to credit card. Therefore both numbers should be entered as negatives. This would still balance in the budget but shows money leaving the checking account (an Asset) and moving to the credit card (a Liability).

I did this in a new 'test' file and got the result I expected in the Budget itself. That is I ended up with a balanced budget.

I am attaching two word files of screen captures of the Budget Balance Sheet Report. The first is before I made the -$100 entries in the Budget and the second is after making the entries.

The first report makes sense. It shows all values as zero.

The second report is confusing. It shows Allocated Assets as:$(100). Which makes sense.

It shows Unallocated Assets as: $200. Which I don't understand. Where did these assets come from, I only budgeted to move funds from one account to another.

Total Assets shows as $100. Which I guess makes sense if you actually had $200 of Unallocated Assets.

New Liabilities shows as: $100. Is that the correct representation. Maybe. If Liabilities are normally displayed as $(100). Then the fact that we are budgeting to move $100 to a Liability Account would mean it should display as a positive value.

In that case Total Liabilities of $100 also makes sense.

Equity shows no increase in Equity which makes sense since we only transferred money from one account to another.

Total Liabilities and Equity shows as: $100. I have no idea what this means.

I don't know if this exercise helps clarify anything for anyone else. I am confused.

Also as I said in an earlier post, I don't understand the purpose of using a budget in the manner the original poster proposes.

If they are simply paying off their Credit Card, there is no reason to budget the transfer from one account to the other (that I can think of).

If they had a balance on their credit card before the beginning the budgeting period and were budgeting $100 to pay down part or all of that Liability then IMO they only need to budget $100 to their Credit Card Account

HTH,

Larry

Post by Geert Janssens

Post by Larry
Sent from my Samsung Galaxy Tab® S
-------- Original message --------
Date: 2017-03-03 02:30 (GMT-08:00)
Subject: Re: How should I enter values on a budget in gnucash ?

How do you come to this conclusion ?
My budget balances if I do it this way, which is what I expect it should do.

A fair conclusion unless it's the code that calculates the totals that's using
the wrong sign assumptions. That's what I'm wondering about.
Geert

Edward Doolittle

2017-03-07 06:03:42 UTC

Permalink

On 6 March 2017 at 12:43, lejohnston <***@dccnet.com> wrote:

Thank-you for your detailed reply. I still have a few questions and I think

you misunderstood some of my comments I will try to clarify below.

OK. I'm forwarding this message to the list, because I think others may be
able to contribute as well. I am really just a beginner, so I always like
to check whether I'm on the right track.

First I think we both agree there is an inconsistancy between the 'budget'
and the 'budget balance sheet report'. You seem to think it is in the
'budget' not the 'budget balance sheet report'. I lean to it being in the
'budget balance sheet report'.

I agree there seems to be an inconsistency, but I haven't reconstructed it
myself. I'm pretty convinced by your example, though. On the other hand, an
inconsistency is just that, and it doesn't mean that one or the other of
the budget or the budget balance sheet are incorrect. Arguments can be made
either way.

What I"m trying to say is that instead of arbitrarily saying one or the
other is right or wrong, we should come up with some principles which make
it easy to remember how it should work. Since the budget is more
fundamental than the budget balance sheet, we should think about how to get
the signs in the budget right. After that's done, we can correct the budget
balance sheet.

I gave a detailed set of principles about two messages back, but they were
too complicated, and still incomplete (I didn't take into account "Reverse
Balanced accounts"), and backwards. Some time soon I plan to sit down and
write up carefully how I think it should work, using principles that I hope
most can agree on, and which are easy to remember and "sensible".

Let's go back to Geert's initial question: I want to budget a repayment of
a credit card (from my bank account).
Bank: 100.00-
Credit card: 100.00-

If we have "Reverse Balanced accounts" set to "Credit accounts", then that
is right. The balance in the asset is decreasing by $100, and the balance
in the credit card account is also decreasing.

Now go to Edit -> Preferences -> Accounts -> Reverse Balanced accounts and
set it to "None". Then the correct way to represent that transaction is
Bank: -100, Credit card: +100. (That is nice because the sum of the changes
is 0, which is exactly what it should be in double entry accounting, which
is why some people might prefer it that way. However, most people are not
used to seeing negative balances, which is why the default is "Credit
accounts" rather than "None".)

This shows that there should be an interaction between the "Reversed
Balanced accounts" setting and the signs in the budget. I believe the
interaction is not properly set up in the budget module now, so that's one
fix that has to be made.

I see this as a transfer of $100 from checking to credit card. Leaving
aside whether or not it makes sense to enter this transfer in the budget, I
see doing this by budgeting $(100) in checking which would decrease my
checking account balance and $(100) in my credit card account (which would
decrease my liability). There should be no overall impact on my net worth
(I am not clear on the relationship between net worth and Equity, as Equity
seems only to be determined at the end of an Accounting Period). Since this
action balanced my budget it leads me to believe that the Budget is working
correctly.

Net worth and equity are approximately the same thing. Equity can be
determined at any moment; just run a balance sheet report at that moment,
and you will find a line for total equity at that moment.

There is perhaps some confusion between Equity and an Equity Account. Let's
just not worry about what happens with Equity Accounts in what follows,
since they're seldom used, only for special occasions.

Do you think that the Budget entries should have been handled differently

and if so why?

I think we've nailed it down. The fundamental principle could be expressed
this way: if Reverse Balanced accounts is "None", then a debit to an
account in the budget should be positive. If Reverse Balanced accounts is
"Credit accounts", then a debit to Assets or Expenses is positive, and a
debit to Liabilities, Equity, or Income is negative. (And for completeness,
the third setting of Reverse Balanced accounts would be taken into account
as well.)

Now we need to know what a debit would be. I have found it helpful to think
about it this way: Increasing an asset is always a debit, and debits are
always paired with credits in a simple transaction, so earning income
(which would increase assets) is a credit to Income; borrowing money (which
would increase assets) is a credit to Liabilities; refunding an expense
(which would increase assets) is a credit to Expenses.

Now the usual use case: If Reverse Balanced accounts is set to Credit
accounts (the default), then increasing an asset in the budget should be
positive; paying an expense should be positive; borrowing money should be
positive; and earning income should be positive. The unallocated (excess?)
amount in a budget would then be calculated as Change in Income - Change in
Expenses + Change in Liabilities - Change in Assets.

I won't detail how it should work if Reverse Balanced accounts is set to
None, but whoever patches the software will have to work it out.

I don't have Gnu Cash handy at the moment to check whether that's the way
the budget currently works. I'll check tomorrow.

Post by lejohnston
I have changed my opinion about how the figures should be entered.

Essentially they are budgeting to transfer $100 from checking to credit
card. Therefore both numbers should be entered as negatives. This would
still balance in the budget but shows money leaving the checking account
(an Asset) and moving to the credit card (a Liability).

What the change in balance sheets shows is the following: you have

withdrawn $100 from checking, and withdrawn $100 from credit card. That
leaves you with an overdraft of $100 in checking, and a balance of $100 on
your credit card, and $200 "unallocated" cash in the virtual budget account.
Here I disagree. I merely budgeted to move $100 from checking to credit
card and so there should have been no 'unallocated' cash as a result.

You're right ... from the point of view of the budget. But the budget
balance sheet clearly shows an unallocated amount of $200. That means
(according to the scheme developed above) that the budget balance sheet is
wrong.

I did another test today. I budgeted to move $100 from one checking
account to another. That is: checking account1 $(100) and checking account2
$100. Because these are two Asset accounts one would be negative and the
other positive. The result is a balanced budget and a 'budget balance sheet
report' that is all zero's. No 'unallocated' cash no change in Assets,
Liabilities or Equity. This is the result is logical but contrary to what
happened when I bugeted to transfer funds from checking to credit card.

Transfer from one asset to another will never be enlightening in this
scenario. It will always work as you expect. The issue is how liabilities
work, in particular the interaction between liabilities and any other type
of account.

Post by lejohnston
I did this in a new 'test' file and got the result I expected in the

Budget itself. That is I ended up with a balanced budget.

It shouldn't be balanced, you now have $200 unallocated. If the budget

and the budget balance sheet disagree on this point, then they are
inconsistent in their interpretation of signs, which is bad, and which is
what Geert is worried about.
As I stated above I don't believe there should be $200 unallocated because
I merely budgeted to transfer money between two accounts.

Yes, that was your intention, and you actualized it correctly in the
budget. The budget balance sheet is wrong because there is a bug in the
budget balance report software.

What confuses me is that in this case I do not owe $100 on my credit card,
I have actually budgeted to move $100 to my credit card account, so in fact
my liabilities have been reduced.

I understand that is your intention, and that is what you accomplished in
the budget. My comments were based not on the budget, but on the budget
balance sheet images that you sent. The budget balance sheet is incorrect,
which is not your fault.

It is important to note that the 'Budget Balance Sheet Report' does not
include the balances of your accounts, It only reports the amounts you have
budgeted in each of those accounts. For this reason I have not found it a
useful report. My interest in it at this point is merely what it tells us
about underlaying issues in the budgeting and budgeting reports in GNUCash.

I've never used the budget balance sheet myself, and I suspect that
literally no one in the world ever has, otherwise this bug would have been
caught earlier. I also wonder what use it is. I guess we should try to get
it right, and then maybe people will start using it, and a use for it will
become obvious?

Unless I'm hallucinating about all this ... it's getting late. I'd like to
run through this one more time in detail, with Gnu Cash running in front of
me, to check it all thoroughly.

TIA for any insight you can provide,
Larry

--
Edward Doolittle
Associate Professor of Mathematics
First Nations University of Canada
1 First Nations Way, Regina SK S4S 7K2

« Toutes les fois que je donne une place vacante, je fais cent mécontents
et un ingrat. »
-- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI
_______________________________________________
gnucash-user mailing list
gnucash-***@gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by usi

lejohnston

2017-03-09 21:02:25 UTC

Permalink

Edward,

I have been tied up with other things so just got back to this.

I made the changes you suggested with Reversed Balances set to 'none'. As you can see from the attached docs this left the Budget unbalanced but the 'Budget Balance Sheet Report' no longer has 'Unallocted Assets' and has Assets $(100) and Liabilities $(100) that offset each other (if I am reading it correctly).

BTW making those changes in Preferences appears to apply to all my GNUCash documents. Although it does not seem to affect my Budget in my main file it has made big changes to my Budget Reports. Therefore I have reset it to the default.

Also sorry for the screen capture of the Budget, the window for the Budget screen has inexplicable elongated and I cannot get it resized. When I reduce the space between the Accounts and the Monthly Budget entries it adds the space between December and Totals. Very frustrating but I hope to sort it out soon. No time now.

Larry

Thank-you for your detailed reply. I still have a few questions and I think you misunderstood some of my comments I will try to clarify below.

OK. I'm forwarding this message to the list, because I think others may be able to contribute as well. I am really just a beginner, so I always like to check whether I'm on the right track.

First I think we both agree there is an inconsistancy between the 'budget' and the 'budget balance sheet report'. You seem to think it is in the 'budget' not the 'budget balance sheet report'. I lean to it being in the 'budget balance sheet report'.

I agree there seems to be an inconsistency, but I haven't reconstructed it myself. I'm pretty convinced by your example, though. On the other hand, an inconsistency is just that, and it doesn't mean that one or the other of the budget or the budget balance sheet are incorrect. Arguments can be made either way.
What I"m trying to say is that instead of arbitrarily saying one or the other is right or wrong, we should come up with some principles which make it easy to remember how it should work. Since the budget is more fundamental than the budget balance sheet, we should think about how to get the signs in the budget right. After that's done, we can correct the budget balance sheet.
I gave a detailed set of principles about two messages back, but they were too complicated, and still incomplete (I didn't take into account "Reverse Balanced accounts"), and backwards. Some time soon I plan to sit down and write up carefully how I think it should work, using principles that I hope most can agree on, and which are easy to remember and "sensible".

Let's go back to Geert's initial question: I want to budget a repayment of a credit card (from my bank account).
Bank: 100.00-
Credit card: 100.00-

If we have "Reverse Balanced accounts" set to "Credit accounts", then that is right. The balance in the asset is decreasing by $100, and the balance in the credit card account is also decreasing.
Now go to Edit -> Preferences -> Accounts -> Reverse Balanced accounts and set it to "None". Then the correct way to represent that transaction is Bank: -100, Credit card: +100. (That is nice because the sum of the changes is 0, which is exactly what it should be in double entry accounting, which is why some people might prefer it that way. However, most people are not used to seeing negative balances, which is why the default is "Credit accounts" rather than "None".)
This shows that there should be an interaction between the "Reversed Balanced accounts" setting and the signs in the budget. I believe the interaction is not properly set up in the budget module now, so that's one fix that has to be made.

I see this as a transfer of $100 from checking to credit card. Leaving aside whether or not it makes sense to enter this transfer in the budget, I see doing this by budgeting $(100) in checking which would decrease my checking account balance and $(100) in my credit card account (which would decrease my liability). There should be no overall impact on my net worth (I am not clear on the relationship between net worth and Equity, as Equity seems only to be determined at the end of an Accounting Period). Since this action balanced my budget it leads me to believe that the Budget is working correctly.

Net worth and equity are approximately the same thing. Equity can be determined at any moment; just run a balance sheet report at that moment, and you will find a line for total equity at that moment.
There is perhaps some confusion between Equity and an Equity Account. Let's just not worry about what happens with Equity Accounts in what follows, since they're seldom used, only for special occasions.

Do you think that the Budget entries should have been handled differently and if so why?

I think we've nailed it down. The fundamental principle could be expressed this way: if Reverse Balanced accounts is "None", then a debit to an account in the budget should be positive. If Reverse Balanced accounts is "Credit accounts", then a debit to Assets or Expenses is positive, and a debit to Liabilities, Equity, or Income is negative. (And for completeness, the third setting of Reverse Balanced accounts would be taken into account as well.)
Now we need to know what a debit would be. I have found it helpful to think about it this way: Increasing an asset is always a debit, and debits are always paired with credits in a simple transaction, so earning income (which would increase assets) is a credit to Income; borrowing money (which would increase assets) is a credit to Liabilities; refunding an expense (which would increase assets) is a credit to Expenses.
Now the usual use case: If Reverse Balanced accounts is set to Credit accounts (the default), then increasing an asset in the budget should be positive; paying an expense should be positive; borrowing money should be positive; and earning income should be positive. The unallocated (excess?) amount in a budget would then be calculated as Change in Income - Change in Expenses + Change in Liabilities - Change in Assets.
I won't detail how it should work if Reverse Balanced accounts is set to None, but whoever patches the software will have to work it out.
I don't have Gnu Cash handy at the moment to check whether that's the way the budget currently works. I'll check tomorrow.

Post by lejohnston
I have changed my opinion about how the figures should be entered. Essentially they are budgeting to transfer $100 from checking to credit card. Therefore both numbers should be entered as negatives. This would still balance in the budget but shows money leaving the checking account (an Asset) and moving to the credit card (a Liability).

What the change in balance sheets shows is the following: you have withdrawn $100 from checking, and withdrawn $100 from credit card. That leaves you with an overdraft of $100 in checking, and a balance of $100 on your credit card, and $200 "unallocated" cash in the virtual budget account.

Here I disagree. I merely budgeted to move $100 from checking to credit card and so there should have been no 'unallocated' cash as a result.

You're right ... from the point of view of the budget. But the budget balance sheet clearly shows an unallocated amount of $200. That means (according to the scheme developed above) that the budget balance sheet is wrong.

I did another test today. I budgeted to move $100 from one checking account to another. That is: checking account1 $(100) and checking account2 $100. Because these are two Asset accounts one would be negative and the other positive. The result is a balanced budget and a 'budget balance sheet report' that is all zero's. No 'unallocated' cash no change in Assets, Liabilities or Equity. This is the result is logical but contrary to what happened when I bugeted to transfer funds from checking to credit card.

Transfer from one asset to another will never be enlightening in this scenario. It will always work as you expect. The issue is how liabilities work, in particular the interaction between liabilities and any other type of account.

Post by lejohnston
I did this in a new 'test' file and got the result I expected in the Budget itself. That is I ended up with a balanced budget.

It shouldn't be balanced, you now have $200 unallocated. If the budget and the budget balance sheet disagree on this point, then they are inconsistent in their interpretation of signs, which is bad, and which is what Geert is worried about.

As I stated above I don't believe there should be $200 unallocated because I merely budgeted to transfer money between two accounts.

Yes, that was your intention, and you actualized it correctly in the budget. The budget balance sheet is wrong because there is a bug in the budget balance report software.

What confuses me is that in this case I do not owe $100 on my credit card, I have actually budgeted to move $100 to my credit card account, so in fact my liabilities have been reduced.

I understand that is your intention, and that is what you accomplished in the budget. My comments were based not on the budget, but on the budget balance sheet images that you sent. The budget balance sheet is incorrect, which is not your fault.

It is important to note that the 'Budget Balance Sheet Report' does not include the balances of your accounts, It only reports the amounts you have budgeted in each of those accounts. For this reason I have not found it a useful report. My interest in it at this point is merely what it tells us about underlaying issues in the budgeting and budgeting reports in GNUCash.

I've never used the budget balance sheet myself, and I suspect that literally no one in the world ever has, otherwise this bug would have been caught earlier. I also wonder what use it is. I guess we should try to get it right, and then maybe people will start using it, and a use for it will become obvious?
Unless I'm hallucinating about all this ... it's getting late. I'd like to run through this one more time in detail, with Gnu Cash running in front of me, to check it all thoroughly.

TIA for any insight you can provide,
Larry

lejohnston

2017-04-01 07:32:06 UTC

Permalink

Geert,

I have another work around for correcting the width of the budget screen. I made a copy of my budget. Deleted the original budget, renamed the copy to the original name. So far it is working. For some reason when you make the copy it resets the original screen size.

Larry

Post by lejohnston
Edward,
I have been tied up with other things so just got back to this.
I made the changes you suggested with Reversed Balances set to 'none'. As
you can see from the attached docs this left the Budget unbalanced but the
'Budget Balance Sheet Report' no longer has 'Unallocted Assets' and has
Assets $(100) and Liabilities $(100) that offset each other (if I am
reading it correctly).
BTW making those changes in Preferences appears to apply to all my GNUCash
documents. Although it does not seem to affect my Budget in my main file it
has made big changes to my Budget Reports. Therefore I have reset it to the
default.
Also sorry for the screen capture of the Budget, the window for the Budget
screen has inexplicable elongated and I cannot get it resized. When I
reduce the space between the Accounts and the Monthly Budget entries it
adds the space between December and Totals. Very frustrating but I hope to
sort it out soon. No time now.

That is https://bugzilla.gnome.org/show_bug.cgi?id=734197
The only workaround currently is to manually correct the width in the
corresponding settings file (in <gnucash_dot_dir>/books/<account_file>.gcm).
Regards,
Geert

Continue reading on narkive:

Search results for 'How should I enter values on a budget in gnucash ?' (Questions and Answers)

replies

Financial management software?

started 2007-01-06 22:54:19 UTC

personal finance