Assets display

Discuss New Feature Requests and Enhancements to Money Manager Ex

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Renato
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Assets display

Post by Renato »

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if i open an asset account with an initial value then they are not displayed on the right side.
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The description of the asset editing is unfortunately very poor and the correct use is not explained.
regards Renato use MMEX since 2009, now with Windows 11
whall3y
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Re: Assets display

Post by whall3y »

Yes, the asset (and shares) functionality in MMEX is a bit of mystery to me also and perhaps needs an overhaul. The fact the logic behind these is confusing has meant I've never used them in anger. :?
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Re: Assets display

Post by neximilian »

Long time MMEx user, first time poster here...

Now that the locale thing has been solved with 1.5.3, although MMEx still ignores regional settings from Windows, the solution is for me satisfactory even if it is just a well bodged workaround. But there is another hot topic that needs to be discussed and that is the Asset account functionality, which is driving me crazy to understand.

It is very poorly documented, beginning with the stub wiki entry to the unhelpful help page, to the missing GitHub explanations. So, I raise the issue here, to see if there are more people with the same problem and/or some solutions:
1.) When creating the asset, there is a field with the asset value, however, the value is nowhere shown later. What is that for? Is it good for something or should it be best left blank?
2.) What's about the first transaction that is created? Why is this dialog box different from the others?
3.) Does the selection of deposit/withdrawal have any impact on the income/expense statements or is it only to change the assets value?
4.) What about the "transfer" checkbox? I could not see any change on the statements if I mark or unmark the checkbox.
5.) This is a big one: The appreciation/depreciation calculation is inverted. If I set that an asset appreciates 2% p.a. the current value is reduced instead of increased. What's the reasoning behind this?

I would like to see an actual tutorial how to correctly use the asset functionality. E.g. I have 500.000,00 € on my bank account, and I just purchased a nice house that appreciates 2% per year. How to correctly set up the asset account and the payment to the seller? For the sake of clarification, let's say I made 2 payments: 20% down payment and a month later the rest.

Thanks for some clarification!
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Renato
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Re: Assets display

Post by Renato »

Perhaps it would also be important to say how many of the features were created in MMEX. Some user expresses a wish to solve a "personal" problem. The developer tries to solve this problem, but since "accounting" is not his field of expertise, some details are usually lost.

Yes, and despite all this, MMEX has become a very sophisticated, great product that is helpful to many users.

by the way: I was also such a developer for 40 years. But with the years I had learned not to simply fulfill all wishes. I asked the users to create the manual first, including calculation examples, which I was then able to realize quickly and without problems.

The fact that the current solution for managing the assets is not satisfactory has already been documented here.

Question: does it have someone who can suggest a better solution with expertise.
regards Renato use MMEX since 2009, now with Windows 11
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Re: Assets display

Post by Nikolay »

Renato wrote: Mon Jun 28, 2021 6:43 pm Perhaps it would also be important to say how many of the features were created in MMEX. Some user expresses a wish to solve a "personal" problem. The developer tries to solve this problem, but since "accounting" is not his field of expertise, some details are usually lost.

Yes, and despite all this, MMEX has become a very sophisticated, great product that is helpful to many users.

by the way: I was also such a developer for 40 years. But with the years I had learned not to simply fulfill all wishes. I asked the users to create the manual first, including calculation examples, which I was then able to realize quickly and without problems.

The fact that the current solution for managing the assets is not satisfactory has already been documented here.

Question: does it have someone who can suggest a better solution with expertise.
These words should be carved in stone.
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Re: Assets display

Post by neximilian »

So I have been digging around and talked to some accountants, bankers etc. In my home country, there aren't many people that specialize in personal finance, so there might be some gaps which I tried to close with some common sense.

Here are some examples of caluclations:

Example 1. Purchase of a real estate proprety with cash.
You have 100.000,00 dollars in cash sitting around somewhere. You decide to purchase a home whose value appreciates yearly 2%.
You basically transfer 100.000,00 dollars to the seller (let's say Mr. John Smith, an entity in the Payees table). On your cash account there must be a withdrawal of 100.000,00 visible. But you also gain an asset, worth at the moment 100.000,00 USD. This must be a positive value on the balance sheet, because it is an asset, and therefore there must be an account created with 100.000,00 USD on the deposit side. After one year (or for example on 1st of January of the next year) the book value of the asset is increased by 2%, or 2.000,00 USD. This is where it gets complicated, since MMEX is not an accounting software, with classic debits and credits entries for account ledgers.
However, there may be a change to the way purchase transactions of assets are handled. A "special" transaction where you select the account where your funds are withdrawn (in this chase the Cash account), the payeee (Mr. John Smith, the seller of the property) and the asset account, where the property appreciation of 2% is selected, and initial value is deposited.
Cash flow is as follows:
Cash account>Withdrawal of 100.000,00 USD, Payee Mr. Smith
Asset account>Deposit of 100.000,00 USD
The "current value" of the home in year 1 is 100.000,00 USD, in year 2 102.000,00 USD and so on. This should be tracked by automatically depositing the 2% of the value each year (or at the beginning of every consecutive calendar or fiscal year).

Example 2. Purchase of a car with cash.
As in the example above, you have 50.000,00 USD sitting around and you decide to purchase a motor vehicle.
Everything is the same, but only your car depreciates now by 10% annualy, and the Payee is "Car Dealer ltd."
Again the transactions are:
Cash account>Withdrawal of 50.000,00 USD, Payee "Car Dealer ltd."
Asset account of the Car> Deposit of 50.000,00 USD
Again, we need to track the 10% annual depreciation of the asset, so the column shows after the first year 45.000,00 USD and so on.

Example 3. Sale of the home after 2 years at current value
You decide to sell the home, and you find a buyer. The buyer agrees to purchase the home for 102.000,00 USD. The current value of the home at that moment is 102.000,00 USD. Then the transactions are simply reversed in case of asset liquidation. The transactions are:
Asset account> withdrawal of 102.000,00 USD
Cash account> deposit of 102.000,00 USD
In the long run, you profited 2.000,00 USD, so your net worth is the same, but instead of having the house, you have cash or cash equivavlent.
Similar situation if you are able to sell the home for 110.000,00. Then the entries look like this:
Asset account> deposit of 8.000,00 USD (for the higher selling price)
Asset account> withdrawal of 110.000,00 USD
Cash account> deposit of 110.000, USD, (with the purchaser as the payee).
In case that you liquidate the asset with a lower value, e.g. 90.000,00 USD, you made a loss of 12.000,00 USD.
Asset account> withdrawal of 12.000,00 USD
Asset account> withdrawal of 90.000,00 USD
Cash account> deposit of 90.000,00 USD
Your net worth reduced is correctly reduced by 12.000,00 you will lose the 2.000,00 of appreciation and 10.000,00 from the purchase price of the asset.


From a GUI and database design point of view the following should be implemented:
1.) When creating an asset account, the form should display the credited account (in the examples it is the cash account), the value (100.000,00 for the former, 50.000,00 for the latter), the payee (who actually receives the money, Mr. Smith for the home, and the Car dealer for the car), the asset account should be automatically debited (have a deposit in MMEx terms) with the same amount (of course other required fields should be present, such as date, category etc.).
After this "special transaction" there should be a withdrawal visible in the Cash account, and a deposit in the Asset account of the corresponding asset.
2.) When liquidating an asset, the form should pre select the asset account, withdraw the selling value, entry for the payee, entry for the selling value, and compensate for the difference between the current value and the actual selling price of the asset.

2.) I had a look at the database schema I see that there are no separate tables that track the appreciation and or depreciation of the assets. Since this are not normal transactions I suggest that an additional table is necessary to track the appreciation, depreciation and differences from the current value in case of asset liquidation. A deposit in the asset account for the appreciating asset is not income in the classical sense, but it should surely be visible as the net wealth of the individual has increased. Therefore the sum of all cash, stocks, and assets, subtracted by the liabilities (e.g. mortgages for the home), are truly that persons net worth.
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Re: Assets display

Post by Nikolay »

At the moment, the situation is as follows.
The product developed spontaneously and I welcomed any changes. The accounts for investment and warehouse were invented by Stefano a long time ago. There is a video with an explanation on YouTube. After that, there was a version of the program for Android that uses the same database structure.

Now I see that these changes are very difficult to maintain (from the point of view of the program code) and difficult to use for their intended purpose.

My opinion is that all this should be dismantled. Allow the transfer of money to investment accounts. Think about what to do with the warehouse.

It is necessary to bring everything to the basics of accounting. On the main page, you need to see the general state of prosperity in order to understand the general state of affairs.

But without changing the database structure, you can't move further. It is necessary to install the Android application as it is and move on within the framework of version 1.6.0.
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