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Appreciation of Assets

brian1990brian1990 Member Posts: 2

There are certain assets like bonds, shares and property that can go up in value. I would like to keep track in WaveApp the evaluation of such assets without being registered as income as in most countries tax is applied on the profit when selling the asset. I read from another post that it may be done by adding an income account and add a journal transaction. But my account is in EUR and the asset is in USD hence can't really use such a solution as I can't select USD as the currency for the journal transaction. Is this an issue where:

  • I am doing something wrong ?
  • Missing feature ?
  • Or besides the scope of WaveApp ?
in Accounting Technical Support

Comments

  • MyronMyron Member Posts: 143 admin

    Hi @brian1990 , welcome to the Wave community! Your question is a bit tricky, but I have consulted with the Wave Plus team on how to best handle this in Wave.

    The value of the asset would be recorded using a journal transaction:


    DR Asset
    CR Unrealized Gain on investment (a liability account)


    The debit will increase the asset, the liability will hold the gain until it’s ready to be realized. When that time comes:


    DR Unrealized Gain (liab)
    CR Gain on Investment (revenue/income)


    The discrepancy caused by the differences in currency can be accounted for through gains/losses in foreign exchange. I'd recommend reading this article on accounting for foreign exchange transactions in Wave for assistance with the foreign exchange side of things:


    https://support.waveapps.com/hc/en-us/articles/208624186-Accounting-for-foreign-currency-transactions


    To be perfectly honest, this question may have some additional nuances that may be best answered by a professional accountant. While the Support Team here at Wave try our best to educate users on how to use Wave, we are not accountants. We always recommend seeking out the advice of an accounting professional for accurate accounting advice. Thanks for taking the time to post this comment in the community! If you have any other questions, thoughts or concerns, we would love to hear from you! Also, if there are any Wave Pros that have more insight into this question, we would love to hear your thoughts!

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