Appreciation of Real Estate Asset

Fanlike

Hi all,
I need some advise on how to account for appreciation of Real Estate Asset, in the following situation:

1) I bought a cheap property on a public sale for 40K (and then created an Asset entries in WAVE called "Property Acquisition Cost")

2) I have then made 10K of refurbishment work, which accounts both for expenses and appreciation of the real estate value (so I created another Asset entries in WAVE called "Refurbishment Appreciation")

3) The current market Value however is around 100K , so it exceeds the sum of ""Property Acquisition Cost"" + "Refurbishment Appreciation" of about 50K. What should I do to account for the 50K appreciation of asset value?

I though I could create another Asset entries in WAVE called "Asset Accumulated Appreciation", then create a 50K transaction in this account and categorize it as "Account Receivable", since the amount of the transaction represents the added value I will possibly earn in the future when I 'll sell the property.

Not an expert in accounting, please help, thanks a lot!

Mikeg

@Fanlike,
Assets like real estate are not adjusted for fluctuations in value. You would have the original cost of the asset (acquisition of building/land) and add to it, any improvements at cost to arrive at your adjusted cost.