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

[DaveC49]

Stephen John, Geert

In accounting terms there are really only 3 basic account types:
  Asset
  Liability
  Equity

These all *must *satisfy the basic accounting equation Assets=Liabilities
+Equity.   

The two sides of this equation are what the German /European system defines
as Activa and Passiva but these groupings are primarily reporting
requirements not account heirarchy. Is there really a need to have an
additional placeholder category as the reporting grouping can be readily
defined from the existing basic account heirarchy structure?

Each type can have function specific sub-types which impose functional
restrictions for that subtype and where the children but these subtypes are
always one of the above basic types. Children of the types and sub-types
must conform to the restriction that they have the same type or subtype as
the parent E.g.

Asset                                                                        
Top level placeholder
   Current                                                                  
placeholder
         Bank
         Accounts-Receivable                                         
business - no children
         Stock
         Trading
   Non-current                                                           
placeholder

Liability                                                                     
Top level placeholder
    Accounts payable                                                   
business functionality-no children
Equity                                                                       
Top  level placeholder
    Income                                                                 
Current period revenue placeholder
    Expenses                                                              
Current period expenditure placholder

My experimentation and what I have understood of the code is this is already
what GnuCash imposes in its account heirarchy with the exception perhaps
that Income and Expenses are treated as their own types and the Equity type
is enforced in any end of period closing operations and/or in the reporting
and the expanded version of the accounting equation is enforced in the code.

Assets=Liabilities + Equity + Income - Expenses

For business purposes it is usually a requirement that each legal entity
should have it's own set of books.   I handle the situation where I need to
separate different individual contributions within an entity in the manner
John suggested (e.g. a household or a partnership) with labelled subaccounts
within each type as defined above. If there really is a need to fully
separate the individuals in terms of separately recording assets,
liabilities and equity, then it is appropriate to run a separate set of
books.

I think it would be useful/nice to clearly document somewhere, perhaps the
wiki, what the existing account structure is at this point and what
attributes accounts currently have and what their intended purpose is from
the developers point of view as well as the other unintended uses that the
user base can come up with. That could then provide a basis for looking at
restructuring those attributes. Something like the design documents that
were produced at times in the past. This would also give the documenters a
chance to reflect that in the documentation.

David Cousens





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David Cousens
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