A conservatorship accounting reports non-cash assets at carry value: the value from the Inventory and Appraisal when the conservatorship began. That figure stays fixed while the asset is held. Market value appears beside it on the closing schedule for information, and it does not enter the math. A house appraised at $600,000 at appointment is carried at $600,000 four years later, whatever the market did.
Where does carry value come from?
The Inventory and Appraisal, form DE-160/GC-040. That figure follows the asset through every later accounting. An asset bought for the estate after appointment carries its purchase price.
Why not market value?
Charges equal credits. Everything under the conservator’s control either went out, was sold, or is still held. If held assets moved with the market, the two sides would drift apart every period for reasons that have nothing to do with anything the conservator did.
Fixing the value isolates decisions. A house that appreciates $200,000 while the conservator does nothing produces no entry. A house sold for $200,000 over carry value produces a gain on Schedule B, because something was done.
When does it change?
Sale. The asset comes off at carry value, and the difference between proceeds and carry value goes on the gains or losses schedule.
A later appraisal. A supplemental or corrected Inventory and Appraisal resets the figure.
Market movement changes nothing.
The closing schedule
Property on hand at the end shows carry value as the working figure, with estimated market value beside it. The second column is real information for the court and for interested parties. It just does not participate in the balance.
Where it goes wrong
Updating carry value to current value partway through because the old figure looks stale. The opening and closing schedules no longer tie and the accounting does not balance.
Computing a gain against a market estimate instead of carry value. A property carried at $400,000, informally valued at $520,000 last year, sold for $450,000, is a $50,000 gain. Not a $70,000 loss.
How is it tracked?
Per asset, carry value in one column and market value in another, from the inventory forward. Business accounting software tracks book value in a way that looks similar but also depreciates and revalues, which this accounting does not want.
Keeping the two figures side by side from the start is the whole job. Sorting out which figure was which, years later, is not.
Streamline Bookkeeping prepares conservatorship accountings and keeps the records between filings. More on the conservatorship accounting page.
*Bookkeeping services only. Not legal or tax advice.*
