On 2/4/2018 1:21 AM, Christopher Lam wrote:
Looks nice. My main concern with these "shadow accounts" is that they will,
by default, be counted in the Net worth reports, income reports, etc, and
must be manually deselected every time.
In my view budget allocations are technically "outside the books" and must
therefore ideally be recorded in ways that don't affect the everyday data
and reports.
The problems people have been discussing are really "work flow" and "how
done" issues.
a) As noted in the second paragraph, technically "outside the books". So
ONE solution is to do just that, a separate set of "books" (gnucash can
handle many). That obviously would mean no effect on reports run against
the regular books. And of course that could be using the built in budget
facility.
b) But it seems most would prefer not having to switch books to record
the effect on budget items resulting from the real transactions. I can
think of MANY ways to put the "budget" accounts so that they would have
no net effect on reports, total of the parent standing accounts (asset,
liability, equity). What I can't see is any easy way to "automate"
because IN GENERAL users, especially non-organizational users, will be
ADJUSTING budget allocations on the fly as needed << don't need a vote
of some board to authorize that >>
c) Some people seem to be confused about "liabilities" thinking that
they NECESSARILY represent an actual debt (the most common use) instead
of possibly representing a CONDITIONAL debt. I will note that some of
the things I have mentioned in this context (especially for non-profit
orgs) may be changing << I have heard that new accounting practice will
allow some restricted funds not to be considered liabilities
until/unless something prevents their use for the intended purpose
instead of as now from the get go as a conditional debt* >>
d) IF I wanted to put the "envelopes" in my main books, I could put them
under assets, liabilities, or equity WITHOUT affecting the totals of any
of those. Thus:
Budget (the parent)
Total allocated funds (debit side?)
Allocations (credit side?)
Each individual envelope
<< all that matters is that Total Allocated Funds and
Allocations be on opposite sides --- which means the total for the
parent "Budget" will be ZERO >>
Michael D Novack
* In my practical experience, donors of conditional gifts or grants
often will agree to a change of use, extension of time to use, etc. But
I have never had to deal with governmental grants, etc. which I suspect
would be less forgiving. But I also have practical experience where ALL
there is is budget accounting << the organization or committee has no
funds in hand --- the budget represents what will be reimbursed if the
committee votes to authorize an expenditure and some committee member
goes out and spends the money --- and then submits the receipts to the
town treasurer for reimbursement. The committee must track "how much do
we have left to spend" or somebody will be out of pocket >>
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