[GNC] Rethinking the placeholder account concept (was: Re: Fwd: The two modules)

Sun Jul 1 11:04:17 EDT 2018

Am Samstag, 30. Juni 2018, 05:37:28 CEST schrieb John Ralls:
> > On Jun 29, 2018, at 3:26 PM, Christian Kluge <frakturfreak at gmail.com>
> > wrote:
> > 
> > Hi,
> > 
> > Am 29.06.2018 um 19:26 schrieb John Ralls:
> >>> On Jun 29, 2018, at 9:52 AM, Geert Janssens <geert.gnucash at kobaltwit.be>
> >>> wrote:>>> 
> >>> Op vrijdag 29 juni 2018 16:59:07 CEST schreef John Ralls:
> >>>> Stock accounts need to have a parent denominated the currency in which
> >>>> the
> >>>> stock trades in order for the asset roll-up to work correctly on the
> >>>> Accounts page. Three-commodity transactions are possible using trading
> >>>> accounts, but I haven’t dealt with that stuff in a while and the
> >>>> details
> >>>> have gone fuzzy on me.
> >>>> 
> >>>> Stock accounts aside, let’s not conflate different purposes. We
> >>>> *should*
> >>>> have an account type to accommodate the European Passive account with
> >>>> Liability and Equity children, so let’s create that. We’ll need to
> >>>> tweak
> >>>> some of the reports a bit to accommodate it, but otherwise it won’t
> >>>> have
> >>>> much impact. It should, of course, be what we now call a placeholder
> >>>> and it
> >>>> should be able to have only Root as a parent and only one each
> >>>> Liability
> >>>> and Equity placeholder children.
> >>> 
> >>> I was in fact deliberately trying to come up with a solution that's more
> >>> flexible than fitting the currently known use cases. The European
> >>> Passive
> >>> account was just one example.
> >>> 
> >>> However we may be spending more time on it than necessary. I checked in
> >>> the
> >>> current version of the commercial accounting package* I also have to
> >>> deal with and it doesn't define a Passive type at all. "Passive" it
> >>> doesn't even appear on its default balance sheet. That is a bit
> >>> uncommon though as the reports I get from my accountant do have a
> >>> passive section. However just like gnucash this package is targeting a
> >>> worldwide audience (though with country specific extensions). That may
> >>> explain why they didn't bother adding the Passive section.
> >>> 
> >>> Let me add that contrary to other accounting packages I have played with
> >>> in
> >>> gnucash the chart of accounts takes a very central place. So whether or
> >>> not we want our own Passive type to group liabilities and equity
> >>> hierarchically on the chart of accounts as well is up for debate.
> >>> 
> >>>> I don’t think that creating a generic placeholder type account that can
> >>>> have children of any type is a good idea,
> >>> 
> >>> Here's another example: a household that wants to  track its finances,
> >>> but
> >>> would want to keep separate account hierarchies per family member.
> >>> Standard
> >>> response: create two files. However they would benefit from common
> >>> reporting which is cumbersome with two separate files. So what if we
> >>> would allow to create two independent account hierarchies in one file.
> >>> With a view type account one could create two top-levels ("Husband" and
> >>> "Wife") and create a independent hierarchy for each. While this could
> >>> also be solved if we would allow multiple root accounts and make that
> >>> root visible I'm using it here to illustrate there are use cases we are
> >>> not covering well.
> >>> 
> >>> I borrowed the idea of a view type account from an old version of the
> >>> commercial package* we have to use. Looking more closely it turns out
> >>> the
> >>> current version has dropped view accounts and instead is organizing
> >>> charts/
> >>> reports using a combination of account type (roughly like we do) and
> >>> hierarchical account numbers. So I must admit perhaps the idea was not
> >>> so
> >>> bright after all :)
> >>> 
> >>> The package also doesn't have a hierarchical account tree. It's flat and
> >>> hierarchy is only added in reports as explained above. So there is no
> >>> such
> >>> thing as a parent account in that package and hence no restriction on
> >>> which
> >>> account type a certain account can be.
> >>> 
> >>> Again in gnucash the chart of accounts is very central and visible so we
> >>> probably shouldn't drop its hierarchical structure just yet.
> >>> 
> >>> The downside of this hierarchical structure is then of course we have to
> >>> think about issues like  whether or not we should allow accounts to
> >>> have any type of child or not. I believe parts of gnucash rely on this
> >>> (I seem to remember a relatively recent issue in the export code that
> >>> it didn't find all liability accounts if they had a non-liability
> >>> parent or such).
> >>> 
> >>>> and I think that we already have too
> >>>> many overlapping account types with subtle behavior differences that
> >>>> are
> >>>> neither documented nor easily discoverable in code.
> >>> 
> >>> I'm all for clearing this up. If we can reduce the number of account
> >>> types
> >>> that would be great.
> >>> For reference this is the list of 17 account types supported by the
> >>> commercial package*:
> >>> Receivable, payable, bank and cash (one type), current assets,
> >>> non-current
> >>> assets, prepayments, fixed assets, current liabilities, non-current-
> >>> liabilities, equity, current year earnings, other income, income,
> >>> depreciation, expenses, cost of revenue, credit card.
> >>> 
> >>> Gnucash currently has 15 of which a few are internal only:
> >>> Bank, cash, credit, asset, liability, stock, mutual, currency, income,
> >>> expense, equity, receivable, payable, root and trading.
> >>> 
> >>> 
> >>> 
> >>> The leftovers from this long discussion for immediate use may be
> >>> summarized
> >>> as:
> >>> - on reports display placeholder accounts once as aggregate account and
> >>> once as its own account if it has splits.
> >>> - work to be more pedantic about the meaning of "placeholder". It should
> >>> become an empty account used for structuring the account hierarchy and
> >>> for
> >>> collecting (sub)totals.
> >>> - introduce a read-only status for accounts one doesn't want to
> >>> accidentally modify, but that should still appear in the chart of
> >>> accounts in various places
> >>> - replace "hidden" combined with current "placeholder" with "inactive".
> >>> - consider introducing a passive account type to be able to structure
> >>> the
> >>> chart of accounts and reports conform European habits.
> >>> - think of ways to have more than one chart of account in one file (only
> >>> mentioned first in this message).
> >> 
> >> There’s been an effort over the last several years between the IASB and
> >> the US’s FASB to reconcile IAS and US GAAP for the obvious reason that
> >> it’s a royal PITA for international businesses to have to present their
> >> books in different ways to different regulators. I discovered when
> >> looking for an IAS example CoA earlier today that it’s apparently come
> >> to fruition as IFRS and that the standard CoA doesn’t have a “Passive”
> >> super-category [1], so perhaps the rest of the world is catching up with
> >> GnuCash. ;-)> 
> > Not the whole world. Section 266 of the German HGB requires the balance
> > sheet to split in active and passive and that’s how it’s displayed in
> > every German accounting software.
> > 
> > https://www.gesetze-im-internet.de/hgb/__266.html
> > <https://www.gesetze-im-internet.de/hgb/__266.html>
> > 
> > Also while you add it think about new account structures and the
> > placeholder concept could you also consider the equivalents of the other
> > types mentioned in the document above.
> 
> No surprise that individual country’s legislation hasn’t caught up. That
> will likely take several more years.

No, it is already there. It is hidden behind the EU directives in the 
liberating §§ 291f:
https://www.gesetze-im-internet.de/hgb/__291.html
So IFRS is primary only applicable for share corps.

> I don’t see any account types there other than the Active/Passive sections
> that GnuCash doesn’t already support. What I can’t figure out is what parts
> of the CoA small companies are allowed to leave out. (And no, my German
> isn’t good enough to thoroughly read the document. I used Google translate
> and so I may have gotten some of it wrong.)
> 
> Regards,
> John Ralls

Regards
Frank