GAAP

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GAAP

Keith Marvin
The GNUCash uses “professional accounting principles”. How does a user ensure particular principles are adhered to (eg US GAAP)?

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Re: GAAP

David Cousens
Hi Keith,

I think Gnucash generally provides the facilities to allow a user to conform with particular standards like the US GAAP and the international standards set by the IASB for example, but it does not force a user to conform necessarily.  In part that is probably because it is used in many jurisdictions around the world. Many countries have adopted the IASB standards, usually modified to suit their own legislative framework but legislation differences make strict conformance problematical. I believe that is not the case in the US specifically but there is a general agreement between the US GAAP and the GAAP in the IASB standards and the convergence process in operation since 2010 is decreasing the differences.
.
That said a lot of the core internals ( implementation of the accounting equation, assets, liability, equity, default accounts setups, double entry transaction recording, business procedures,  etc) do or can be setup to conform to GAAP principles.

Many of the GAAP principles relate more to the way in which accounting software is used, e.g. general concepts like entity, accounting period, cost principles, matching principle, profit recognition principle (cash or accrual basis for example), prudence, going concern principle, rather than the software implementation per se. All of Gnucash's reports are customizable (although there is a learning curve involved to do that) to conform with the requirements in particular jurisdictions.

David
David Cousens
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Re: GAAP

Wm...
In reply to this post by Keith Marvin
On Thu, 14 Jul 2016 16:49:34 +1200, in gmane.comp.gnome.apps.gnucash.user,
Keith Marvin <[hidden email]> wrote:

> The GNUCash uses “professional accounting principles”. How does a user ensure particular principles are adhered to (eg US GAAP)?

David has given a good answer, another is, which particular principle did
you have in mind?   There are great big chunks of GAAP that aren't really
the domain of software at all.

The human decision to apply Cash vs Accrual accounting is an oft cited
example.  In some jurisdictions you may have to use Accrual accounting
depending on the type of business or turnover or something else (I don't
think anywhere says you have to use Cash but could be wrong) the point is
that no bit of software "knows" when you enter an expense whether you are
using the date you paid it or the date you received the bill (electronic
tx's that have gone through an external system excepted, etc).

--
Wm

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Re: GAAP

Gregory Forster-2
In reply to this post by Keith Marvin
GNUcash can follow GAAP.  However, one must know GAAP to ensure GAAP
principles are adhered.  What I like about GNUcash, is that it does not
use a fancy GUI, it relies on ledgers - ALL accounts. To make the most
of GNUcash, it's best to have an  accounting education and background.

Greg



On 7/13/2016 11:49 PM, Keith Marvin wrote:

> The GNUCash uses “professional accounting principles”. How does a user ensure particular principles are adhered to (eg US GAAP)?
>
> Sent from Mail for Windows 10
>
> _______________________________________________
> gnucash-user mailing list
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> https://lists.gnucash.org/mailman/listinfo/gnucash-user
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> Please remember to CC this list on all your replies.
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Re: GAAP

David Carlson-4
In reply to this post by Wm...
Wm,

Here in the US, our Internal Revenue Service expects ordinary individuals
to use cash accounting and businesses to use accrual accounting in
preparing our tax returns.  That seems to always work in their favor when
there are questions about which year a bonus was earned or paid, for
example.  It is an example of ways our government forces us to hire
expensive accountants and lawyers at tax time, instead of relying on cheap
or even free software like GnuCash.  I imagine other jurisdictions also
have their own quirks.

David C

On Mon, Jul 18, 2016 at 9:12 AM, Wm <[hidden email]> wrote:

> On Thu, 14 Jul 2016 16:49:34 +1200, in gmane.comp.gnome.apps.gnucash.user,
> Keith Marvin <[hidden email]> wrote:
>
> > The GNUCash uses “professional accounting principles”. How does a user
> ensure particular principles are adhered to (eg US GAAP)?
>
> David has given a good answer, another is, which particular principle did
> you have in mind?   There are great big chunks of GAAP that aren't really
> the domain of software at all.
>
> The human decision to apply Cash vs Accrual accounting is an oft cited
> example.  In some jurisdictions you may have to use Accrual accounting
> depending on the type of business or turnover or something else (I don't
> think anywhere says you have to use Cash but could be wrong) the point is
> that no bit of software "knows" when you enter an expense whether you are
> using the date you paid it or the date you received the bill (electronic
> tx's that have gone through an external system excepted, etc).
>
> --
> Wm
>
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
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