Gnu Cash v.2.6.5 Difficulties with Cash Flow report not picking up correct expenditure amounts already inputted correctly in the accounts

[Alice Lee]

According to your information, you created a credit for the directors and canceled out the expenses.  That would be an entry with a credit on both sides of the entry and no debit.  The entry should have been a credit to the directors for the loan amount and a debit to your bank account.  Maybe you did not write what you meant.

-----Original Message-----
From: gnucash-user [mailto:gnucash-user-bounces+alee212007=satx.rr.com at gnucash.org] On Behalf Of Miles Baker
Sent: Tuesday, May 19, 2015 11:42 AM
To: Maf. King
Cc: Gnucash
Subject: Re: Gnu Cash v.2.6.5 Difficulties with Cash Flow report not picking up correct expenditure amounts already inputted correctly in the accounts

Hi Maf

Thanks for your tips i agree that if you look at the actual intentions of the transactions rather than trying to figure how to best record them that makes life easier.

I think that Case 2 is more appropriate.

To help others if there is a lag between when a cost is paid for and incurred in various currencies in all of my reports (P&L, Balance Sheet and Cash flow) for the currency tab "price source" I have switched all of them from "nearest in time" to "weighted average" and this creates consistent numbers throughout and gets rid of any large unrealized gains and losses in the balance sheet (which were in my case all due to the timings of the currency rates).

Cheers

MB


*Miles Baker*
Email: mcfbaker at gmail.com
Email2: miles.baker.11 at mail.wbs.ac.uk
Int'l Tel: +44 (0) 208 1335219
Angola Mob: +244 91 5166992
Skype Name: Extra Miles

On 19 May 2015 at 11:10, Maf. King <maf at chilwell.net> wrote:

> On Tue 19 May 15 10:09:21 Miles Baker wrote:
> > Hi Maf
> >
> > Thanks for your swift response.
> >
> > I think the problem with the Flow related to the first 6 months of 
> > the business when there was no money coming in and there was no cash 
> > in the business.  For this period I have expended money from the 
> > current account against various account names but depending on who 
> > paid of each item I created a credit for the relevant directors 
> > loans to cancel out the expenses.  At the end of this 6 month period 
> > the current account shows a zero balance all paid for by the 
> > directors loans.  The date that the director loan cancels out the 
> > total expenditure for each director
> (several
> > account names) may differ from the date the expenditure was incurred 
> > it could affect the exchange rates slightly.  Is there any way to 
> > reduce
> this
> > complexity?
>
>
> Hi Miles,
>
> I don't use multiple currencies in GC, but it seems to me that 
> generally, the txns in GC should reflect real life as much as 
> possible.  Break it down into stages...
>
> eg.
>
> Did Director Fred loan money into the current account (which was then 
> used to buy widgets) or did he pay for the widgets directly?  It may 
> be a subtle difference, but probably important when forex comes in to 
> it.
>
> (case 1: transfer Liab:DirectorLoan:Fred -> Bank:Current,   (loan of money)
> then Bank:current->Expense:widgets        (buy stuff)
> then Income:Sales -> Bank:Current           (sell product)
> then Bank:Current -> Laib:DirectorLoans:Fred       (refund loan)
>
> Case 2
> Liab:DL:Fred -> Expense:Widgets
> Sales -> Bank
> Bank -> Liab:DL:fred)
>
>
> Did all the other directors who loaned money do the same?
>
> Then consider the currencies & rates.
> Did Fred loan $150 or £100 (from his point of view) - i.e. when did 
> the conversion happen?  If I loan £100, I want £100 back.  I "don't 
> care" what happens to that £100 while it is loaned.
>
> But If I convert my £100 to $150 and loan the $150 to someone, I can 
> only expect the same $150 back &  I must accept my personal risk of 
> rate change meaning I won't get the same £ back again.  Of course, I 
> might get more £ back than I had to start with.  Depends how the rate 
> changes!
>
> Not sure if that is going to help of confuse further...
>
> Maf.
>
>
> >
> > With the unrealized loss I think this is also a currency issue but 
> > it
> would
> > be nice to be able to see the 'black box' calculations behind it.
> >
> > With the assets I will expense them as they depreciate in due course.
> >
> > Best regards
> >
> > MB
> >
> > On 19 May 2015 at 09:15, Maf. King <maf at chilwell.net> wrote:
> > > On Tue 19 May 15 08:58:29 Miles wrote:
> > > > Hi Wm
> > > >
> > > > Thank you very much for your reply I am a first time user and 
> > > > not a qualified accountant although I have studied it as a 
> > > > subject on my
> > >
> > > masters
> > >
> > > > and I am using it for a start up.
> > > >
> > > > It is strange as when I load the cash flow report the expense 
> > > > numbers are incorrect but when you click on the blue link which 
> > > > directs you to
> the
> > > > workings they are all correct but they are not transferred into 
> > > > the
> > >
> > > report.
> > >
> > > >    The correct expenses are recorded ok in the P&L.  I have got 
> > > > three
> > > >
> > > > currency accounts all directing back to USD at the correct rates 
> > > > and
> the
> > > > calculations are all correct.
> > >
> > > Hi Miles.
> > >
> > > I'm not an accountant either.
> > >
> > > The Cash Flow report measures fundamentally different things to 
> > > the
> P&L.
> > > IIRC, the cash flow puts a "fence" up around a subset of accounts, 
> > > and looks at the flow of money "crossing the fence" to other 
> > > accounts.
> > >
> > > > I also have a strange thing called unrealised loss creeping into 
> > > > the
> > >
> > > Balance
> > >
> > > > Sheet which I can not reconcile.
> > >
> > > Unrealised [gain|loss] may be to do with your exchange rates etc.  
> > > I'm
> not
> > > familliar with that bit of GC, but I seem to recall that if you 
> > > bought some USD at a rate of foo, then report with a rate bar, 
> > > you'll have
> unrealised
> > > loss
> > > of foo-bar.  That's probably either simplistic (or possibly 
> > > totally off target), but it might point you in the right direction.
> > >
> > > > With my assets some equipment has been purchased through 
> > > > Directors
> Loans
> > > > which have already been paid for so they have been inputted in 
> > > > Assets and transferred from Directors Loans but I can not get 
> > > > them to be
> deducted
> > > > as
> > > > an expenditure so the expenditure is light in the P&L.
> > >
> > > Sounds to me like you have incorrect expectations here.  Has the
> business
> > > actually expended the money, or have assets and liabilities both
> increased
> > > by
> > > the same sum and hence cancel each other in the balance sheet?
> > >
> > > From a Tax point of view, in the UK at least, a purchase of 
> > > long-life equipment for use in a business isn't an expense anyway.  
> > > Your expense comes at year end when you allocate depreciation to 
> > > your capital assets pool.
> > >
> > > HTH,
> > > Maf.
> > >
> > > > If you have some tips they would be highly appreciated.
> > > >
> > > > Best regards
> > > >
> > > > MB
>
> --
> Maf. King
> PGP Key fingerprint = 8D68 A91F 733B 2C1F 43B7  2B7C E591 E8E1 0DE7 
> C542
>
>
>
>
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