Translation error: Passive := Equity + Liability missing in english accounting; was: Equity vs liability
Frank H. Ellenberger
f.ellenberger at online.de
Thu Aug 12 13:31:21 EDT 2010
Am Donnerstag, 12. August 2010 um 16:46:47 schrieb Paul Schwartz:
> Gnucash [and traditional US/English bookeeping] have 3 categories/types of
> accounts: assets/liabilities/equity.
traditional != US/English bookeeping
You will find the first description of modern (!=Hammurabi's) bookeeping in
Luca Pacioli: Summa de Arithmetica, Geometria, Proportioni et Proportionalità;
Venetia [IT] 1494; Repro e.g. ISBN 88-317-6008-4
If you open http://en.wikipedia.org/wiki/Balance_sheet and switch to any other
european language, you will see the pair Attivo - Passivo on the first level
and then on the next level Passive split in equity and liability.
> It seems that Belgium accounting has
> only 2. That's a fundamental mismatch. The accounting equation for Gnucash
> is A = L + E. It seems as if the Belgium accounting equation is A = L where
> L is the L + E of Gnucash/US accounting.
Not the belgium (and all other continental) accounting has a mismatch, but the
english has a shortage - it is missing the term Passive.
> Perhaps for Belgium COA you should make an account called Equity that is a
> subaccount of Liabilities and not have any account that is of the Gnucash
> type Equity.
> ----- Original Message ----
> > From: Geert Janssens <janssens-geert at telenet.be>
> > To: gnucash-user at gnucash.org
> > Sent: Thu, August 12, 2010 8:00:32 AM
> > Subject: Equity vs liability
> > Hi,
> > I'm in the process of creating a new chart of accounts tailored to
> > Belgian law. I am basing my work on the normalized chart of accounts that
> > can be downloaded from the government's website. I'm having some trouble
> > with setting
> > account types the way I want though.
> > Here's the thing:
> > In Belgium (and perhaps in other countries as well) a balance is usually
> > represented like this:
> > Assets | Liabilities
> > -------+------------
> > ... | Equity
> > . | Other liabilities
> > . | ...
> > (In Dutch this would be:
> > Activa | Passiva
> > -------+----------
> > ... | Eigen vermogen
> > . | Vreemd vermogen (leningen ed)
> > . | ...
So there is a translation error in many european languages of GnuCash, if they
use Passiva (Creditkant) as translation of Liability (= Vreemd vermogen). I
saw the same in Dansk a short time ago. I german we fixed it a time ago, then
it reappeared somehow, but should be fixed now.
> > So to represent this in GnuCash, I wanted to create this hiearchy:
> > + Assets (account type Assets)
> > + Liabilities (account type Liabilities)
> > + Equity (account type Equity)
> > + Other liabilities (account type Liabilities)
> > I can't however. GnuCash won't allow me to put my equity accounts under
> > liabilities.
> > So what's wrong here ?
> > * Am I trying to misrepresent something here ? Do I use the wrong term
> > to translate "Passiva" into an account type ?
> > * Or is GnuCash just not properly adapted for the Belgian situation ?
This can be discussed in
https://bugzilla.gnome.org/show_bug.cgi?id=421766 - support "Passive" account
type (able to contain both Liability and Equity accounts)
> > Thanks for your feedback.
> > Geert
Because the translation error is less a user question, copying to
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