GAAP

[David Carlson]

Wm,

Here in the US, our Internal Revenue Service expects ordinary individuals
to use cash accounting and businesses to use accrual accounting in
preparing our tax returns.  That seems to always work in their favor when
there are questions about which year a bonus was earned or paid, for
example.  It is an example of ways our government forces us to hire
expensive accountants and lawyers at tax time, instead of relying on cheap
or even free software like GnuCash.  I imagine other jurisdictions also
have their own quirks.

David C

On Mon, Jul 18, 2016 at 9:12 AM, Wm <tcnw81 at tarrcity.demon.co.uk> wrote:

> On Thu, 14 Jul 2016 16:49:34 +1200, in gmane.comp.gnome.apps.gnucash.user,
> Keith Marvin <kmarvin at snap.net.nz> wrote:
>
> > The GNUCash uses “professional accounting principles”. How does a user
> ensure particular principles are adhered to (eg US GAAP)?
>
> David has given a good answer, another is, which particular principle did
> you have in mind?   There are great big chunks of GAAP that aren't really
> the domain of software at all.
>
> The human decision to apply Cash vs Accrual accounting is an oft cited
> example.  In some jurisdictions you may have to use Accrual accounting
> depending on the type of business or turnover or something else (I don't
> think anywhere says you have to use Cash but could be wrong) the point is
> that no bit of software "knows" when you enter an expense whether you are
> using the date you paid it or the date you received the bill (electronic
> tx's that have gone through an external system excepted, etc).
>
> --
> Wm
>
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