Record asset appreciation

Recording the true value of your assets in your accounting system is important. Over time, an asset may increase in value, which is known as appreciation. For example, you may have bought a property for $40,000 that is now worth $60,000. To ensure the Balance Sheet Report shows the current value of the asset, you need to record the appreciation using journals.

To create a ledger account for appreciation

Before you can record the appreciation, you need to create an account in the Equity section of your chart of accounts. You can either post appreciation back to the original fixed asset account, or create a new account to record it separately. In this example, you will create a separate account to record building appreciation.

1. Click Settings, Business settings.
2. Under Financial Settings, click Chart of Accounts.
3. Click New Ledger Account.
4. Complete the following information for the appreciation ledger account:

   Included in Chart	Leave this selected.
   Ledger Name *	Enter a name for the account (for example, "Appreciation").
   Display Name *	Enter the display name (for example, "Appreciation").
   Account Number *	Enter the account number.
   Category *	Select Equity.
   Visibility	Leave the defaults selected.

5. Click Save. If you don't need to create a fixed asset ledger account for the appreciation, you can proceed to the next section and record appreciation.
6. Click New Ledger Account.
7. Complete the following information for the fixed asset ledger account:

   Included in Chart	Leave this selected.
   Account Name *	Enter a name for the account (for example, "Building Appreciation").
   Display Name *	Enter the display name (for example, "Building Appreciation").
   Account Number *	Enter an account number.
   Category *	Select Fixed Assets.
   Visibility	Leave the defaults selected.

8. Click Save.

To record appreciation

1. Go to Adjustments, Journals.
2. Click New Journal.
3. Enter the date and reference information you want to use for the journal.
4. If required, enter a description for the journal.
5. Enter the relevant information for the appreciation journal. For example:

   Account Name *	Details	Debit	Credit
   Appreciation (3001)	Appreciation	0.00	20,000.00
   Building Appreciation (0010)	Appreciation	20,000.00	0.00

6. Click Save.

You have successfully recorded the appreciation for your property.