Combined Personal plus Businesses in same file
Mike or Penny Novack
stepbystepfarm at mtdata.com
Wed Apr 9 12:29:38 EDT 2008
I'll try to address this point by point.
> Assume you have a small set (four or five) of (legally/taxably
> separate) entities that each use an identical chart of accounts. Give
> each entity a short name and call that name a "tag."
> In this situation, there is nothing inherently difficult about letting
> the separate entities share one chart of accounts (they are all
> identical anyway) and separating the entities at a higher level by
> tagging each transaction. Any report can simply filter the
> transactions by tag and the result is exactly the same as if the
> entity associated with that tag were the only entity existing in that
You are describing something that would depend upon "share same
chart of accounts". In general that would NOT be true of any two
business entities and would certainly be untrue between any sort of
business entity and personal books. Even where exactly the same sort of
business entity (and this might apply to your situation, say rental
property A and rental property B) where there would be a very close
correspondence, there would be differences.
Example: You have to replace the furnace in unit A. That creates a
fixed asset account with a date of acquisition (so you can handle the
depreciation of that asset -- purchase of the asset isn't an expense,
it's depreciation is). You may or may not ever have to replace the
furnace in unit B, but even if you did, unlikely to be the same date!
> The difference is one of convenience. All the transactions from all
> the entities (in this small set) are available (i.e., new txns can be
> entered, existing can be reviewed or modified) simultaneously. There
> is no need to close a file (i.e., remove a set of transactions from
> computer memory) and open another file to continue working with
> various entities in this small set.
Locking is at the file level, not the directory level. You could have
open two instances of GnuCash accessing different files (different
books) at the same time with both of these on your screen.
> I think multiple hierarchies (as was explained to me by Derek) sounds
> close to this. However, since I haven't tried it before and since it
> is not recommended generally, I want to understand it in more detail.
> I would appreciate it if anyone will discuss with me some of the pros
> and cons of using multiple hierarchies in one file, in the context I
> have outlined above. Thanks.
I think the best way to analyze most of the "accounting" sort of
questions is to imagine you were keeping the books the old fashioned
way, pen and ink on paper.
I think also you might want to question what this "other" system does
or doesn't do. For example, does it check that balance is maintained not
only for the books as a whole (when entering a transaction) but that the
books for each "tag" also remain in balance -- which they must if these
are technically separate entities.
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