MMEX Asset Purchase - A Worked Example
Posted March 24, 2025 by MMEX ‐ 2 min read
Learn how to accurately record and manage an asset purchase in MMEX, ensuring proper financial tracking and reporting.
This guide provides a detailed example of how to record an asset purchase in MMEX, from initial setup to tracking value changes over time.
In the Real World - The Purchase
I bought a property for £100,000 on 21 June 2000 as a cash buyer. The legal fees for the purchase were £1,000.
- 19 June: My bank balance was over £102k.
- 20 June: I transferred £101k to a solicitor.
- 21 June: The property was registered in my name, and my net worth changed:
- 19 June: £102k in the bank.
- 20 June: £1k in the bank.
- 21 June: £101k net worth (including property).
In MMEX - Recording the Purchase
Step 1: Bank Account Setup
I had one bank account with a reconciled balance of over £101k before 2000-06-19, ensuring I could afford the property.
Step 2: Creating the Asset and Account
On 2000-06-19, I created:
- An asset “property-1” with an initial value of £0.
- An asset account “property-1” with an initial balance of £0.
Recommended Approach:
- Create an Asset Account first with name(Property) or name (property-1).
- Create an Asset with the type(Property) or the exact same name (property-1).
Step 3: Transferring Funds
On 2000-06-20, I recorded:
- A £100k transfer from the bank account to the asset account.
- A £1k withdrawal from the bank account, with payee “Solicitor”.
Recommended Approach:
Transfer £101k directly for clearer cash tracking.
Step 4: Recording the Asset Purchase
On 2000-06-21, I created an asset transaction:
- A £100k withdrawal/transfer with payee “Vendor”.
Recommended Approach:
Record a £101k purchase in the asset transaction to reflect the full expense.
Step 5: Revaluing the Asset
After purchase, the property’s real value was £100k. The £1k legal fee was already included in the £101k total, making this a more accurate reflection of investment cost and ROI or G/L calculations.
Step 6: Applying a 5% Yearly Growth Rate
To reflect appreciation, I applied a 5% annual growth rate.
Conclusion
By following these steps, you can accurately record an asset purchase in MMEX, ensuring clear financial tracking. The £101k investment, including legal fees, is properly reflected, and asset appreciation is tracked over time. This approach provides a precise view of net worth and ROI.