Net worth card appears incorrect (Q Mac 7.0.1)

Hi - just did the update to Version 7.0.1 (Build 700.48728.100). The Net worth card on the home page includes negative balances that I have in some of my property accounts as a liability.

Should the net worth card not classify assets and liabilities based on account type rather than whether the account balance is a debit or credit?

Thanks

Answers

  • MontanaKarl
    MontanaKarl Member, Windows Beta, Mac Beta Beta

    When would Net Worth not be Assets minus Liabilities? A negative value in an asset account is effectively a liability when things are added (reducing net worth); a negative value in a liability account is effectively an asset when liabilities are subtracted (increasing net worth). So, the account classification should be valid…unless what you're saying is that is not what happens for you?

    If you generate a Net Worth report do you see something that isn't in the right place?

    Quicken Mac and Windows subscription • Quicken user since 1990, MacBook Pro M2 macOS Ventura 13.3.1 • Windows 11

  • Jon
    Jon SuperUser, Mac Beta Beta

    I think accounts are grouped into Assets and Liabilities based on their value; the account type doesn't matter. Anything with a positive balance is an Asset, anything with a negative balance is a Liability. If I have a credit card with a negative balance it's included in Liabilities, but if I make an overpayment that changes it to a positive balance then it's no longer included in Liabilities.

    Quicken Mac subscription. Quicken user since 1990.

  • jacobs
    jacobs SuperUser, Mac Beta Beta

    Should the net worth card not classify assets and liabilities based on account type rather than whether the account balance is a debit or credit? 

    Yes, perhaps, although it doesn't affect the bottom line of your total net worth. (Out of curiosity, what kind of assets do you have which have a negative balance?) An asset account in Quicken typically has a positive account balance; a liability account typically has a negative balance. If you have a negative balance in an asset account, it is reducing your net worth. Technically a negative asset should probably be still be counted as an asset which is reducing your total net assets. But I don't know if it's wrong to count it as a liability, since it is likely money you owe to someone. (Unless you've got contra-asset accounts, such as accumulated depreciation. But Quicken isn't geared to handle that level of business finance.)

    Quicken Mac Subscription • Quicken user since 1993
  • AMoff_99
    AMoff_99 Member ✭✭
    Thanks for feedback.
    My net worth report includes the negative balance in my asset accounts as part of total assets, not with liabilities. I am happy with that grouping.
    The net worth card does not treat these negative asset balances in the same way.
    And as jacobs mentioned, I am using a contra account to offset the value in other asset accounts and net to zero - I am tracking different elements of asset values in a construction project that are then offset by the contra with the full asset value being shown in a different account.
  • jacobs
    jacobs SuperUser, Mac Beta Beta

    @AMoff_99 I just did a quick test to demonstrate that you are absolutely correct. I think this is a bug in the Net Worth card, and I have reported it.

    I created a new data file with three accounts: an asset with a value of $10,000, another asset with a value of –$5,000, and a liability with a value of $2,000. We would expect to see total assets of $10,000 - $5,000 = $5,000, liabilities of $2,000, and a total net worth of $3,000. Indeed, that's what a Net Worth report shows:

    So one would expect the Net Worth Dashboard card to show the same thing. But it doesn't:

    Although the sidebar shows assets totaling $5,000 and liabilities of -$2,000, the Net Worth card shows assets of $10,000 and liabilities of -$7,000. The Dashboard card is taking the negative asset and adding it to liabilities, rather than subtracting it from assets. That's wrong accounting/bookkeeping, it diagrees with the sidebar, and it disagrees with the Net Worth report. It's a bug.

    Quicken Mac Subscription • Quicken user since 1993
  • AMoff_99
    AMoff_99 Member ✭✭
    @jacobs Thanks for your response and reporting it, it should be an easy fix for quicken.
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