Andrew Sackville-West wrote: >I don't want to rain on your parade, but in my opinion this is the >wrong thing to do. > >What would be better is to have a separate balance sheet report that >provides the delta over a time period. I don't begin to know how to do >that, but IMO, it is the proper thing to do. > >Allowing assets into an income statement flies in the face of any >accounting I've seen. Note that IANAA. > >A > > I'm finally going to jump in here too. It has been very frustrating to be expected to answer basic accounting/bookkeeping questions being trated as "what facility within GnuCash" because the reality is that like ANY accounting package, GnuCash can't help you with "what should I be doing?" sort of questions.
OK -- Andrew is completely correct here. However different Canadian tax laws the basic accounting wouldn't be different. What accounts and how reported, yes. I believe the confusion is between the individual reports produced by GnuCash and "the report" (complete financial statement) needed for reporting purposes. The USUAL process is that the individual reports are generated, think of them as "data" and turned over to the accountant who uses them to produce the finished product. That will at least be an "Income Statement" and a "Balance Sheet" but might include other specialized reports depending on what the complete financial report must contain (cash flow might be important, distinguishing between unrestricted and restricted funds might be important, for a 501c3 distinguishing the source of funds, "qualified" or "unqualified" might be important). For example ---- one of the organizations for which I keep the books is a 501c3 and the "standard" (GAAP = generally accepted accounting principles) format for presenting reports to the board of directors (and also used for tax purposes) would be ........ 1) Income statements (not called that in the finished product as "non-profit" accounting uses different langauge) for the current period side by side with that of the previous period. 2) Balance sheets for the ends of the two periods (same as the start and end of the current) also side by side. 3) Anything requiring explanation annotated (like footnotes, but using the "endnote" format) 4) Any special accounting procedures specified in a general note (say what fixed assets subject to depreciation and by what rule) I asked the accounting type person to whom I was turning over the "data" (two Income Statements and two Balance Sheets as produced by GnuCash) if I should try to create a custom report to put all that together (I've written a few hundred thousand lines of financial system code in my day, so COULD do it). He said definitely not, that this was the accountant's task, that every accountant would have his or her own favorite editor, and as produced by the proposed custom report, would STILL need to be edited at least to insert the annotation so savings of effort minimal. In other words, to produce a finished product would be more than a "custom report". Would need an EDITOR that took the custom report as input and allowed the accoutant to then edit it. That's a LOT of work for very little gain. Suitable editors already exist for accountants to use and all that would be saved is the copy/paste of data. If there was only ONE "finished product" format required perhaps worth while but that's not the case here. What a formal report for a 510c3 looks like not necessarily the same as for some other form of organization. Back to the original question which was really "how do I properly keep the books to reflect "depreciation" and what information must I be able to report for my jurisdiction. That's NOT a GnuCash question. That's a "basic business accounting" question in this case with emphasis on Canadian tax law. It simply isn't fair to expect the "user guide" of GnuCash to cover such a wide range of user needs from "hand to mouth cash flow personal budgeting" to "acounting for a 510c3". A work covering such a range would be a massive tome with each end user interested in just a tiny portion AND total beginners at accounting might get inot worse trouble if wandering into the wrong sections. Frédéric, my best advice to you is go to a library where they have a number of accounting texts, look in the index in the back of each for "depreciation", then see how good the section of this book is covering that topic, and select the best book to learn from. To me (also) the very thought that you picture the "depreciation accounting" (as opposed to the total depreciation expense transactions) would show up in the Inccome Statement tells me that you are starting at the very beginning of this subject. This is "double entry bookkeeping". ONE side of the transactions recording depreciation ends up as an expense; the OTHER side of those transactions is what affects the balance remaining of each fixed asset being depreciated (and will affect the Balance Sheet). Michael D Novack, FLMI PS -- Please note that I am NOT an accountant, not in any way qualified to give accounting advice. _______________________________________________ gnucash-devel mailing list gnucash-devel@gnucash.org https://lists.gnucash.org/mailman/listinfo/gnucash-devel