[GNC] Add top-level account for both Income (Revenue) and Expenses (Other [Non-Operating] Income And Expenses)

[David Cousens]

Stan 

I think Michael is just trying to duplicate the account structure given in the
Wikipedia article he referenced, which is a very general chart of accounts more
appropriate to a very large consolidated enterprise. Essentially an Income or
expense account is a temporary Equity account in any case. Comprehensive
income/expenditure is required to be in the Income statement so I would not
place it under a permanent equity account as that would normally result in it
not being included. 

Personally I would place the headings for Non-Operating income and expenses
under the general Income and Expense top level accounts as as long as they can
provide the information for the income statement it doesn't matter too much
where they are in the chart of accounts. IAS 1 of the IFRS requires a separate
item for profit and loss and comprehensive income and allows either a single
statement including both or separate statements of profit/loss for the period
and comprehensive income expenditure for the period. AFAIK the SEC requirements
in the US GAAP are a bit more restrictive and prescribe the format and minimum
line item requirements as well as the expense classification requirements. They
only strictly apply if the company is SEC registered as I understand it but I am
likely wrong.  Both appear to require non-operating income and expense to be on
the income statement as far as I can tell
(https://www.govinfo.gov/content/pkg/CFR-2001-title17-vol2/pdf/CFR-2001-title17-vol2-sec210-5-03.pdf)
 (I'm not in the US and only vaguely familiar with the regs there). 

David
On Sun, 2022-12-25 at 16:51 -0800, Stan Brown wrote:
> The new top-level account is for _Non-Operating_ income and expenses. As
> such, I would make it an equity account. I agree with you, though, that
> it should definitely be a placeholder.
> 
> What I'm not clear on is why it must be a top-level account. To me it
> sure looks like what we called Extraordinary Income (in the accounting
> sense, where "Income" is the net of income and expenses) -- for
> instance, the gain or loss if they sell a piece of equipment that they
> no longer need. That could have the main Equity account as its parent.
> 
> The OP could do some experimentation. But, like you, I'm concerned about
> how well the reports would cope with a sixth top-level account.
> 
> Stan Brown
> Tehachapi, CA, USA
> https://BrownMath.com
> 
> On 2022-12-25 15:02, David Cousens wrote:
> > Michael 
> > 
> > If you select the Parent account as a "New top level account" in the New
> > account
> > dialogue you can create a new top level account. You would select its type
> > as
> > Income and mark it as a Placeholder. You can then create Income and Expense
> > accounts under it as required. Not sure how this would affect the reports
> > however. Someone else may be able to comment on that.
> > 
> > David Cousens
> > 
> > 
> > 
> > On Sun, 2022-12-25 at 17:54 +0000, gnucash_2022 at michaelaltfield.net wrote:
> > > How do I create a top-level account in GNU Cash that can hold both Income
> > > *and* Expenses in its subaccounts?
> > > 
> > > IFRS (and US GAAP) don't directly publish example Chart of Accounts, but I
> > > find it common to use some standard top-level account number prefixes. For
> > > example:
> > > 
> > >  *
> > > https://en.wikipedia.org/wiki/Chart_of_accounts#Example_Chart_of_Accounts
> > >  * https://www.ifrs-gaap.com/universal-chart-accounts-0
> > > 
> > > 1.0.0 - Assets
> > > 2.0.0 - Liabilities
> > > 3.0.0 - Equity
> > > 4.0.0 - Operating Revenue
> > > 5.0.0 - Operating Expenses
> > > 6.0.0 - Other (Non-Operating) Income And Expenses
> > >  \_ 6.1.0 Other Revenue And Expenses
> > >    \_ 6.1.1 Other Revenue
> > >    \_ 6.1.2 Other Expenses
> > > 
> > > The GNU Cash docs say that an account must be one of five account types
> > > 
> > > > As we saw in the previous chapter, accounting is based on 5 basic
> > > > account
> > > > types: Assets, Liabilities, Equity, Income and Expenses.
> > > > 
> > > > ...
> > > > 
> > > > A GnuCash account must have a unique name (that you assign) and one of
> > > > the
> > > > predefined GnuCash “account types”. There are a total of 12 account
> > > > types in
> > > > GnuCash. These 12 account types are based on the 5 basic accounting
> > > > types;
> > > > the reason there are more GnuCash account types than basic accounting
> > > > types
> > > > is that this allows GnuCash to perform specialized tracking and handling
> > > > of
> > > > certain accounts. There are 6 asset accounts (Cash, Bank, Stock, Mutual
> > > > Fund, Accounts Receivable, and Other Assets), 3 liability accounts
> > > > (Credit
> > > > Card, Accounts Payable, and Liability), 1 equity account (Equity), 1
> > > > income
> > > > account (Income), and 1 expense account (Expenses).
> > > 
> > > (source
> > > https://gnucash-docs-rst.readthedocs.io/en/latest/guide/C/ch_accts.html?highlight=account%20types
> > > )
> > > 
> > > While it's trivial to create the first five accounts in GNU Cash, I can't
> > > find
> > > a way to add a top-level account for `6.0.0 - Other (Non-Operating) Income
> > > And
> > > Expenses` -- which itself needs to hold both Income *and* Expense sub-
> > > accounts.
> > > 
> > > How can I structure my GNU Cash Accounts with a top-level account named
> > > `6.0.0
> > > Other (Non-Operating) Income And Expenses` that can contain *both* an
> > > Income
> > > sub-account (eg `6.1.0 Other Revenue`) and Expenses (eg `6.1.2 Other
> > > Expenses`)?
> > > 
> > > (see also
> > > https://money.stackexchange.com/questions/154324/add-top-level-account-for-both-income-revenue-and-expenses-other-non-operat
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