Reconciliation window: closing balance distorted and reconciliation date

Jannick Asmus jannick.news at gmail.com
Mon May 5 12:58:20 EDT 2008


On 05.05.2008 18:04, Derek Atkins wrote:
> Jannick Asmus <jannick.news at gmail.com> writes:
> 
>>> What puzzles me is why you reconcile a transaction before it has even 
>>> occurred.
>> This is because of transactions becoming due today with due date in the 
>> future. I described it in a previous email within this thread.
>>
>> For my purposes the process of reconciliation is rather a closing of 
>> transactions because they are logically consistent with all other 
>> transactions and information from outside and can, thus, be 'frozen'.
> 
> That's not reconciliation. That's "clearing".

Call it clearing or reconciliation. This is just a question of definition.

What is needed for a proper accounting is that transactions are "frozen"
such that they cannot be (easily) changed any more. I use the
reconciliation feature for this. Since it is not restricted to accounts
which should only be reconciled according to your definition, it can be 
used for other purposes, too. And I hope it will remain like that.

This feature to freeze transactions is one of the biggest issues here in
Germany why GnuCash might not get as popular as it could be, since
German tax authorities do not accept it most likely due to the lack of
"freezing" transactions. Everybody interested in this might visit a 
long, but informative thread on this in the German mailing list over the 
last months.

> From the register
> click in the 'R' column and it will change from 'n' to 'c'.  (Or
> at least those are the terms in English).

Yes, I know. I guess 'n' stands for no, 'c' for confirmed and - I
suppose - 'y' for yes or reconciled.

> You should NEVER "reconcile" a transaction in the future, because
> you should ONLY reconcile against a printed statement from your
> bank.

Thanks for the hint, but the question I have brought up is rather about 
"freezing transactions" in GnuCash. This applies to all transactions 
involving P&L and balance accounts and I hope that the feature will not 
be restricted to assets such as bank accounts and, e.g., receivables.

BTW: What about a bank account statement printed between the transaction 
and the value date? Waiting till after the value date? ;)

>> If a second party is involved in the transaction providing a balance 
>> amount to date, the process of reconciliation includes comparing the 
>> balances on each side (information from outside). If there is no balance 
>> of the second party involved available, there is no other way to check 
>> the double-entry accounting by the extended understanding of the 
>> technique of reconciliation. For in-house transactions (e.g. transfers 
>> between liabilities - cf. the correspondence with Maf.) reconciliation 
>> means freezing the account after a check of consistency.
> 
> Your liabilities don't provide you periodic statements of activity?

What do you mean - liabilities with contractual rights? Or those
contingent upon certain specified events? Or are you talking about 
(deferred) tax liabilities? ...

>> I have real big number of transactions each week and I am really keen on 
>>   closing the accounting cases in GC, since keeping transactions open 
>> can lead to unintentional changes and is time consuming twice.
>>
>> I hope this could make my point of view a bit clearer. :-)
> 
> It does, but you're still wrong.  ;-)

Thanks one more time. ;) ... according to your definition one could 
agree that you will be right. But the question is not about sticking to 
a more or less formal definition of reconciliation, but to have a 
software tool fulfilling requirements of users or/and local authorities. 
I am afraid to say that I do doubt that GnuCash gains significantly more 
popularity here in Germany, if it does not face up to issues like that. 
Of course I cannot say anything about other countries with respect to 
this issue.

>> Best wishes,
>> J.
> 
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
> 
> -derek

J.


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