[GNC] How would one record "Provision for liabilities" ?

[Adrien Monteleone]

You can certainly create 'Other Liabilities' or 'Provisional 
Liabilities' under the main 'Liabilities' account, as you see fit.

I'd create that as a placeholder-parent, and then create a separate 
account for the specific liability 'owner'. (or whatever 
description/name makes sense)

This practice will allow you to easily move that account somewhere else 
in the tree if you need to. (as long as it is still a 'credit' account, 
that is—liability, equity, revenue—opposite accounts of asset and 
expense would be significantly more difficult to transition to)

So if you weren't sure if the account should be Equity, Liability, or 
Revenue, it really doesn't matter at first, as long as you describe it 
well, and keep its transactions isolated. (don't mix other stuff in it, 
which is why it should be a child account with a descriptive parent, and 
never a 'catch-all/miscellaneous' approach)

Regards,
Adrien

On 12/10/21 6:34 PM, Dr. David Kirkby wrote:
> With all the usual disclaimers (not an accountant, not their jurisdiction,
> ask your accountant), can anyone suggest where it would be sensible to
> record "Provision for liabilities" in GnuCash? It is defined on the balance
> sheet as
> 
> *Provisions *
> 
> *Provisions (ie liabilities of uncertain timing or amount) are recognised
> when there is an obligation at the reporting date as a result of a past
> event, it is probable that economic benefit will be transferred to settle
> the obligation and the amount of the obligation can be estimated reliably. *
> 
> Does it seem reasonable, from the point of using the software, to just
> stick it in as a liability? I was thinking of creating a "Provision"
> liability under the Liability account
> 
> If anyone can confirm my suspicion seems reasonable, or can suggest a
> better place to record this, I will do so.