Different kinds of liability

Discussion:

Nicholas McAvoy

2018-09-12 20:29:55 UTC

Hi,

This is more of an accounting question than an hledger question, but here
goes:

I commit to giving away a certain percentage of my income (call it p). If I
deposit a check for X dollars, I add a liability for pX dollars to
Liabilities:Giving. (I do something very similar for estimated income tax
liability.)

This conveys pretty well the idea that the money isn't really "mine." But
there's one problem: I might give away *more than* pX. In that case the
excess serves to inflate my net-worth on the balance sheet. That seems
wrong because any extra I give away is really just lost. It's not as if I
overpaid a credit card and can expect a refund, but it looks the same.

It makes me wish for a way for certain liabilities to read as zero even
when they are positive. I don't think I actually want that; it seems like
there should be a more natural way to handle it. But other than exactly
offsetting transactions to Expenses:Extra generosity or something like
that, I'm not sure what that might be.

Does anyone handle something similar to this differently?

Thank you.
Nick McAvoy

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Francesco Ariis

2018-09-12 20:58:08 UTC

Permalink

Hello Nicholas,

Post by Nicholas McAvoy
I commit to giving away a certain percentage of my income (call it p). If I
deposit a check for X dollars, I add a liability for pX dollars to
Liabilities:Giving. (I do something very similar for estimated income tax
liability.)
This conveys pretty well the idea that the money isn't really "mine." But
there's one problem: I might give away *more than* pX. In that case the
excess serves to inflate my net-worth on the balance sheet. That seems
wrong because any extra I give away is really just lost. It's not as if I
overpaid a credit card and can expect a refund, but it looks the same.

I would just balance it regularly if I see it gets positive. Say
`Liabilities:Giving` is 5 € (positive, I gave more than what I planned).
I would then write:

01/03/2018 Balance giving
Expenses:Giving 5 €
Liabilities:Giving

This of course implies a previous entry like this:

01/02/2018 Paycheck
Assets:Cash 100 €
Revenue:MyJob

01/02/2018 Monthly Giving
Expenses:Giving 5 €
Liabilities:Giving

and the act of giving money recorded like this:

15/02/2018 Giving
Assets:Cash -18 €
Liabilities:Giving

Would this work for you?

Nicholas McAvoy

2018-09-12 21:19:31 UTC

Permalink

Francesco,

I'll think a bit, but that may be a better way to handle it. I've actually
handled the paychecks in a more complicated fashion. Instead of your:

01/02/2018 Paycheck
Assets:Cash 100 â¬
Revenue:MyJob

01/02/2018 Monthly Giving
Expenses:Giving 5 â¬
Liabilities:Giving

I've done something like:

01/02/2018 Paycheck
Assets:Checking 100 â¬
Revenue:MyJob

01/02/2018 Check for period ending 12/31
Revenue:MyJob -100 â¬
Revenue:Net 70 â¬
Liabilities:IncomeTax 20 â¬
Liabilities:Giving 10 â¬

(This has the benefit of telling me how much I've "really" made, with the
problem of making it slightly harder to ascertain my total pay.)

Then when I give money:

15/02/2018 Giving
Assets:Cash -18 â¬
Liabilities:Giving

Note that there's no Expense in my method. That made me reluctant to add an
Expense in order to balance the giving. But if all giving "comes from" an
Expense account, then adding more poses no problem.

I suspect your method is more standard. Thanks!

Post by Francesco Ariis
Hello Nicholas,

Post by Nicholas McAvoy
I commit to giving away a certain percentage of my income (call it p).

If I

Post by Nicholas McAvoy
deposit a check for X dollars, I add a liability for pX dollars to
Liabilities:Giving. (I do something very similar for estimated income

tax

Post by Nicholas McAvoy
liability.)
This conveys pretty well the idea that the money isn't really "mine."

But

Post by Nicholas McAvoy
there's one problem: I might give away *more than* pX. In that case the
excess serves to inflate my net-worth on the balance sheet. That seems
wrong because any extra I give away is really just lost. It's not as if

Post by Nicholas McAvoy
overpaid a credit card and can expect a refund, but it looks the same.

I would just balance it regularly if I see it gets positive. Say
`Liabilities:Giving` is 5 â¬ (positive, I gave more than what I planned).
01/03/2018 Balance giving
Expenses:Giving 5 â¬
Liabilities:Giving
01/02/2018 Paycheck
Assets:Cash 100 â¬
Revenue:MyJob
01/02/2018 Monthly Giving
Expenses:Giving 5 â¬
Liabilities:Giving
15/02/2018 Giving
Assets:Cash -18 â¬
Liabilities:Giving
Would this work for you?

Dmitry Astapov

2018-09-12 21:25:51 UTC

Permalink

Your last transaction could be:

15/02/2018 Giving
Assets:Cash -18 â¬
Liabilities:Giving = 0
Liabilities:Giving extra

to make sure that Giving is flat after this transaction and all exces goes
into "Giving extra"

Post by Nicholas McAvoy
Francesco,
I'll think a bit, but that may be a better way to handle it. I've actually
01/02/2018 Paycheck
Assets:Cash 100 â¬
Revenue:MyJob
01/02/2018 Monthly Giving
Expenses:Giving 5 â¬
Liabilities:Giving
01/02/2018 Paycheck
Assets:Checking 100 â¬
Revenue:MyJob
01/02/2018 Check for period ending 12/31
Revenue:MyJob -100 â¬
Revenue:Net 70 â¬
Liabilities:IncomeTax 20 â¬
Liabilities:Giving 10 â¬
(This has the benefit of telling me how much I've "really" made, with the
problem of making it slightly harder to ascertain my total pay.)
15/02/2018 Giving
Assets:Cash -18 â¬
Liabilities:Giving
Note that there's no Expense in my method. That made me reluctant to add
an Expense in order to balance the giving. But if all giving "comes from"
an Expense account, then adding more poses no problem.
I suspect your method is more standard. Thanks!

Post by Francesco Ariis
Hello Nicholas,

Post by Nicholas McAvoy
I commit to giving away a certain percentage of my income (call it p).

If I

Post by Nicholas McAvoy
deposit a check for X dollars, I add a liability for pX dollars to
Liabilities:Giving. (I do something very similar for estimated income

tax

Post by Nicholas McAvoy
liability.)
This conveys pretty well the idea that the money isn't really "mine."

But

Post by Nicholas McAvoy
overpaid a credit card and can expect a refund, but it looks the same.

You received this message because you are subscribed to the Google Groups "hledger" group.
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D. Astapov
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Nicholas McAvoy

2018-09-13 04:32:57 UTC

Permalink

Post by Francesco Ariis
15/02/2018 Giving
Assets:Cash -18 â¬
Liabilities:Giving = 0
Liabilities:Giving extra
to make sure that Giving is flat after this transaction and all exces goes
into "Giving extra"

That's a nice idea! Making "Giving extra" a liability still has the problem
of raising my net worth on the balance sheet, but I could conveniently use
this balance assertion regardless of whatever category I find for the
excess.