How to set up hierarchy for accounts? What is better?

[John Layman]

In several threads during the time I've been monitoring this list, people
have kicked around COAs that would fragment real-world accounts.  I don't
think they realized the ramifications.  In my original message I  gave a
specific example of where elevating IRA in the hierarchy would fragment a
real-world account.  I  think there is good reason to question that IRA (an
investment type) belongs in the hierarchy at all.  If the COA were to be
orthogonal, it seem you would need to position BOND, EQUITY, MUTUAL FUND,
ETF, etc. on the same level.  Most likely, each individual holding of one of
these investment types will wind up as a leaf account in your COA tree
structure.  You'd better think carefully about the ramifications of trying
to group them by type higher up, or you're going to get tripped up.

Of course, one of the standout characteristics of GnuCash is the flexibility
it allows in restructuring your COA.

-----Original Message-----
From: FireFly [mailto:fireflys_98 at yahoo.com] 
Sent: Sunday, March 20, 2011 4:41 PM
To: gnucash-user at gnucash.org; 'alfggmb'; john.layman at laymanandlayman.com
Subject: RE: How to set up hierarchy for accounts? What is better?

--- On Sun, 3/20/11, John Layman <john.layman at laymanandlayman.com> wrote:

> The account structure can still show
> you how much is in all savings
> accounts, how much is in all checking accounts, and so on.  But each 
> individual bank account, investment account, etc. is a record-keeping 
> entity in its own right, so they need also to be an easily 
> identifiable entity in your own records. If you fracture them into 
> pieces/parts, good luck when it comes to reconciling your records to 
> those of the institutions!  The example given of a high-level  IRA 
> umbrella is rather like saying, "I'd like to know how much I spend 
> using debit cards, so I'll define a Debit Card account, Checks account 
> and so forth.  As soon as you have more than one checking account with 
> a debit card, you've got a mish-mash.
> This is not just some
> matter of personal preference, it's a matter of structuring data so 
> that it actually resembles the entity it is tracking.
> 

I'm not sure that anyone has suggested tracking outside of the actual
entities? Maybe I missed it (and I've deleted all the older e-mails) but the
original request seemed to be about whether you put [Bank Name] as an entity
towards the start, or the end of the account structure, not splitting
accounts into multiple pieces?


> "Better implies that one method is superior to another"
> 
> Yes, but no one said otherwise. Superior, on the other hand, has more 
> than one meaning, last time I checked.  Perhaps you should try 
> actually reading messages before you reply to them?

Maybe you should take your own advice there? The question being asked was
"is a, better than b", my take on it is that neither is better than the
other, they are just different ways of organizing that show different pieces
of information easily. I could easily organize all my asset accounts under
bank names, I don't because to me it doesn't matter how much I have in one
individual bank, it's the collective set of checking accounts, or savings
accounts that matter to me, someone else may be far more interested in
knowing how much they have in holdings at a particular institution vs how
much they have in savings accounts overall, it's all personal preference.