I've been using GnuCash to track only my money and securities. Now, I wanna use it to track also my fixed assets so that I have a more accurate estimation of my net worth.
One fixed asset I have is a motorcycle, a Honda CG 150 Titan. It was bought in 2006 for 4,100 BRL at market price, but today it's worth 6,500 BRL. Although the motorcycle has depreciated, BRL was also inflated meanwhile, which resulted in this increase in price.
I consulted my government's website to see what was the inflation adjustement from 2006 to 2022, and it shows an inflation by a ratio of 2.54401930 in the period. That means the motorcycle would be bought nowadays for around 10,430 BRL (4,100 * 2.54401930). Now the depreciation is visible, because the motorcycle went from what would be 10,430 BRL in 2006 to 6,500 BRL in 2022.
My question is how to account that in GnuCash. The GnuCash Guide for depreciation suggests creating two Asset sub-accounts, one for cost and another for depreciation, which in my specific use case is:
- Assets - Fixed Assets - Honda CG 150 Titan - Cost 4,100 BRL - Depreciation ? BRL
But if I create depreciation transactions from 2006 to 2022 in the account "Depreciation", I will end up with an asset that's worth nothing, which is against the purpose of estimating the value of my fixed assets.
One idea I had was creating a custom security for the motorcycle model as you do with stocks. This way, you would treat the motorcycle like you treat companies in a stock exchange, but I don't know if this is good accounting pratice. How should I account this?