Proper way to use 'Update Balance' on asset accounts?

KnnNike

For several asset accounts I track - e.g., house, car - every now and then I want to update the current value of the account, due to depreciation or appreciation. Right now I'm using the seemingly handy 'Update Balance' feature for this...all good.

Except whenever I update the balance, Quicken enters a transaction with a "Balance Adjustment" payee and no category. This has the effect of creating thousands of dollars in 'uncategorized transactions' inside my ledger, which I generally want to avoid.

My 'fix' is currently to manually assign a 'self-transfer' category to each transaction. So for instance, if the asset account I'm updating is 'House', the category I enter is [House], and I OK the warning about transferring back into the same account.

Is that how this is supposed to work? Is it a bug that Quicken leaves these balance adjustment transactions uncategorized by default?

india just

I recommend manually adding asset value change transactions. I usually use capital gains but you can use whatever category you feel is appropriate. Then I balance to the current value.  I did this for years with house value as Unrealized Capital Gains.  then when I sold house, excess value above purchase repairs and improvements was categorized as Realized Capital Gains.  I did house and vehicle value adjustments once a year, mid summer.

Chris_QPW

Hmm, in the current version of Quicken Subscription I'm seeing something different.

Update Balance puts in the category Misc, so it doesn't leave it without a category, but in my opinion it is the wrong category.


If you have Quicken Windows Premier or above there is the Zillow feature that will also update the current value for a house.  It uses the self referencing [House] "balance adjustment not Misc, but puts in a tag (which I really don't like) and no payee.  like this:


So Quicken isn't even consistent about this.

I have always used the self referencing category/balance adjustment.  In truth I don't really stake a lot on this number because it is too "soft", the real number comes when you sell the asset.  In fact for a long time I had my house set as "separate" so that I could see the value without it since I had no intention of selling it or taking out loans against it.  In other words it has no liquid cash value to me at the moment.

And then there is the other line of thought like @india just points out as in this is "unrealized" and should be recorded that way.

Another thought is just to capture the actual things that would affect your cost basis in the house, so that you know that for the sale (tax wise).

So I don't think there is a clear cut "right way" it all depends on what the person.

KnnNike

@Chris_QPW I have the most up-to-date version of Quicken Premier, and it doesn't generate this 'Misc' category for me...weird.

And I cannot use the Zillow feature. I have a condo, and there's a well-documented bug that the Zillow/Zestimate/value update doesn't work if your street address contains more than one property (think 123 Main Street #40). That's a whole other headache I'm waiting for a fix on.

KnnNike

india just said:

I recommend manually adding asset value change transactions. I usually use capital gains but you can use whatever category you feel is appropriate. Then I balance to the current value.  I did this for years with house value as Unrealized Capital Gains.  then when I sold house, excess value above purchase repairs and improvements was categorized as Realized Capital Gains.  I did house and vehicle value adjustments once a year, mid summer.

So if I'm understanding you correctly, you use the same technique I'm using except the category used is "_UnrlzdGain", correct?

DGHartman

I have been using Quicken since 1991 and my database goes all the way back the whole 30 years. I have always updated Quicken to the latest versions over the years and have found many errors in the software. Overall, I like the way it works and it tends to get better over time.

One of my frustrations is the way Quicken does the "Update Balance" on different accounts. If the account is a banking account, then the "Update Balance" feature allows you to enter a category for the transaction. This is good and makes sense. If the account is a Property & Debt Account, the "Add Category" pull down does not appear. In the latter instance, Quicken will either enter no category at all or enters "Misc" depending on the individual account. Both of these are not useful.

I would much prefer that Quicken add a pull down for the Property & Debt accounts to select a default memorized transaction that will always be used to "Update Balance" for that particular account using the update dollar amount. Note that you just can't recall an existing memorized transaction to make this entry since the new balance dollar amount will be recorded simply as an addition or subtraction from the existing account total. By doing it this way you would need to manually calculate the "Update Balance" entry amount yourself, defeating the whole purpose of the "Update Balance" feature.

Quicken, are you listening?? Please fix!!