Have you all noticed that in the ledger, when you are setting the category(account) that a transaction should be attributed to, you can add a new category(account) name and it will create it for you. Very cool feature. However, I noticed that you can only create Income and Expense accounts from the ledger entry form?
Is this intentional? Is it a technological limitation, code limitation or by design?
I find myself in the situation where I am tracking my rentals and I need to create security deposit accounts (these are liabilities) to track the security deposits my tenants make.
I figured I would start the topic here and see what people think.
Should the application allow the creation of Asset and Liabilities accounts from within the new transaction form?
The Category associates a transaction with an income or expense category for accounting and reporting purposes, and enables you to group certain transactions. Type the name of the category into the defined field. If you have entered the category and it does not exist then KMyMoney will ask if you want to create a new one. If the selection is Yes KMyMoney will then open a dialog box that allows for the further definition of the category based on General, Hierarchy and Tax characteristics.
So yes, the feature is not so new (could have been in older versions than 4.8) and the limitation to categories is by design.
I have no strong opinion about opening it to asset and liability accounts. That’s more a matter of how to do the UI on that.
I’ve been debating this in my mind. For a new Category, you only have to specify where in the hierarchy it is, which you can do any time after you finish creating the current transaction. For an asset or liability Account, choosing an Institution and location in the hierarchy of Accounts can also be done later. However, you also need to assign an opening date and opening balance, which I would not want to see delayed, as I think the user would be more likely to forget, and later run into difficulties. I suppose it would be possible to have fields for these two data items as part of the “do you want to create …” dialog.
However, one additional question. By default, when you enter an Account name in the Category dropdown, it is assumed you are specifying a Category. If you select an existing Asset or Liability Account, that is what indicates the transaction is a transfer. If you type a name which does not exist, how would the program know whether you want to create a Category of Asset/Liability Account? One option would be to have the initial “Do you want to create …” pop-up have buttons for “Create Category” or “Create Asset or Liability Account.” Choosing the former would work as it does currently, and selecting the latter would bring up a form asking for opening date and opening balance.
I like the idea of the pop up. In some financial software, all categories and accounts are the same. They are treated as accounts.
In any case, I think the pop up is a good idea. FYI: I do not use the transaction form. I always turn that off. Personal preference but I do not like the Transaction entry Form. I like the inline entry form.
I’m pretty late to the game for this topic, but I only started using KMyMoney a couple of days ago. I did want to jump in and voice my strong support for adding logic like this. In my case it came up when I was trying to figure out how to record depreciation (important for correctly calculating net worth).
Traditionally this is done by creating a transaction that includes an asset (a vehicle in my case) and an expense (depreciation expense). You’re reducing the value of the asset and offsetting that with an expense – double-entry accounting 101.
I’ll grant you that only accounting types (and business and finance folks) completely care about this. So perhaps you disguise it in something called a Journal Entry (or JE for short). Accountants and businessmen live and die by JEs and will really appreciate having them available.
In the meantime, do you have any thoughts on how I can reduce the value of an asset periodically (monthly or annually) without altering the opening balance?
Hmm, I always thought that we can do that out-of-the-box. Given you have those two accounts (asset account and depreciation expense category) then you just open the asset account’s ledger and add a transaction for the expense category with the amount you want to depreciate. And once done, you can use it to create a schedule (monthly or annually) using the context menu. Or am I missing something?
I think in your case, as @ipwizard mentioned, Asset-to-Expense, this should be possible.
In my case, I was trying to go from Asset-to-Liability.
For example, when you finance a new vehicle, you can use the new loan wizard or you can create the accounts yourself. (I usually prefer to do it myself)
From within the Asset account ledger, if you enter a new transaction and enter a new name for an account, you can only select it to be of Income or Expense type. You cannot choose it to be a liability.
If you do want it to be an expense type, as in your use case, that is there already.
Can you explain more what you are seeing that is missing in your use case? Or let us know if the functionality is not there for you.
Does tracking the depreciation help out non-business users in tax season? Or is it mostly useful for Business accounting?
Or, if it does help, how does it help? I am wondering if there are some additions to be done in the Tax reports. When you get a chance to check them out, please feel free to report them.
I know tax rules are different around the world so keep that in mind too. This amazing software is used world wide by increasing number of users.
