Best practice for tracking startup seed investment made BY my company?

rwcgh

What is the best way to track a seed investment made by my small business (i.e. cost basis) in another business/startup? In this case it's a convertible note, so I don't need to really track the value over time. I just want to document that let's say we invested $20,000 on August 1 and another $10,000 on October 1. That way if we need to write it off as a loss later, or if it does well and we get a positive return, we will be able to account for it on taxes especially, Do I create a new Asset account for "Investment in Startup X"? And then I offset it with the cash outflow each time we invest? Something else?

Mikeg

@rwcgh,
Yes, you would set up either a short term or long term asset. On the transaction journal the category to assign would be the asset account. You would not make entries to adjust value over time. However, if additional investments are made then you would categorize to the asset.

rwcgh

Thanks, @Mikeg !