Equity vs liability

[Paul Schwartz]

Gnucash [and traditional US/English bookeeping] have 3 categories/types of 
accounts: assets/liabilities/equity. 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.

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.

HTH

Paul



----- 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 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 ?
> 
> Thanks for your  feedback.
> 
> Geert
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