Re: OT: Not sure how to determine owner's equity on a new business I am starting

[John Locke <..hidden..>]

Well, I'm not an accountant, but equity is basically the total of all 
your assets, minus the total of all your liabilities. And you'll find 
that on your Balance Sheet (in LedgerSMB, Reports -> Balance Sheet).

So if you are setting up the books from the property owner's 
perspective, the loan from your father (and any other loans) should show 
up in a liability account, and the market value of the property should 
be on the books in an asset account, along with the value of any cash 
accounts associated with the business. Materials purchased for the work 
and payments to you would be expenses that would get paid out of the 
asset accounts, and at the end of any desired accounting period, you 
would calculate any appreciation/depreciation of the assets to update 
its value to the current market value.

Cheers,
John Locke
http://www.freelock.com


On 05/03/2014 05:19 AM, Chris Bennett wrote:
> We are going to build a set of apartments with full baths and dormitory
> rooms with a shared bathroom area.
>
> My father will be suppling the funding.
> I will be doing the design and labor part.
> The property owner has a flat concrete roof, which he always determined
> to finish, but never had the funds.
>
> If it was a separate building, no problems, but he lives on the first
> floor. All of this will occur in Guatemala to provide housing for
> students in a new University about to open within walking distance.
>
> I am totally confused on how to come up with his owner's equity.
> Any advice?
>
> Thanks,
> Chris Bennett
>
>
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