Requirement - Special Account + General Ledger Transaction

I want to use special account to keep track of the aging of the debts towards the banks. So I created a test business and I created to special account

Bank Financing A

Bank Financing B
image

Each of the has two different “sub-status”:

  • Long Term (To be reimboursed >= 1Y)
  • Expiring (To be Reimboursed < 1Y)

Here are the starting balances at 30/6:

Both the bank financing are all “long term” at 30/6

at 31/7 1 milion of both the financing becomes “expiring”. So I do this journal entries:

Obviously I will see no changes in my BS:

I pay back at 1/8 0,5 milion + 0,5 milion:

My new BS will be:

And if I look at the special accounts I see correctly:

The “problem” is with the “General Ledger Transactions” Report which in Italy, as I already told, is a very important document that should be submitted to the tax authority and is not very readable:
image

As you can see while in the Starting Balance there is a clear reference to “financing long term” in both the Liabilities, the movement I made with the journal entry doesn’t show any reference to the fact that I’m moving 1m from “long term” to “expiring”.

So, my request is to implement the report in order to show the special account name in all the descriptions involved.

To show short term and long term you need to have separate accounts even separated Liability sections.

Now it up to you if you want to show individual loans or grouped (as per sample) for the periods.
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It depends. Since we are under the supervision of a controlled authority we have a chart of accounts which is not divided in short therm and long term liabilities. So I think a solution can be special accounts. But I think their reporting into general transaction ledger should be fixed a little bit.

It should be fixed in general since it doesn’t tell from where to where the amount goes.

That’s fine, just have the Special Accounts for the short and long term without the Liabilities separation.
Doesn’t matter if the individual accounts are shown as grouped, the point is, you can’t do an internal account transfer (long term amount to short term amount) and expect it to be displayed some how.
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It is shown in general ledger summary but not in an exhaustive way. That’s why I was suggesting @lubos a little bit of implementation of the report

Up until now I have just been addressing the “display” issue but if you want to go deeper then there are other matters.

Earlier on you stated “Both the bank financing are all “long term” at 30/6”, if we assume 2018, then that statement in accounting terms means that there are no repayments due before 30/6 2019. Long term means beyond a year.

But then you state “at 31/7 1 million of both the financing becomes “expiring””. You can’t have all the financing “long term” at 30/6 and then have an “expiring” portion only 1 month later. The expiring portion was already short term as at 30/6.

So if you aren’t going to clearly separate the short term and the long term via separate accounts - why even create the Journal, it just polluting the waters. Just have the finance owing less the repayment. The internal long to short transfer serves no purpose.

Dear @Brucanna,

as said it was just a test “business”. I didn’t give so much importance to the date. But since you want to play the role of being stubborn without looking at my real request of confrontation, you didn’t thought that since at 30/6 it was a starting balance both the 1 milion amounts could be 1Y+1m old at 30/6 (so “long term”) and so at 31/7 they become “expiring”.

I find very rude and impolite your assertion of “pulluting the waters” since, during the last months, I asked @lubos, many changes in this report that made it presentable to a certified auditor in Europe without risking fines.

That said I think that a transfer between two “special accounts” under the same account, since they are only an internal reclassification, by law, must not appear under the general ledger transaction, so there are two ways to obtain this:

  1. put a filter in the general ledger transaction for this kind of “internal” journal entries
  2. create a separate way of moving internally these amounts without using journal entries.

With esteem

Davide

Yes, but the forum reader would have expected that the test business would be based upon actual, not false circumstances.

Then you can’t complain about the inaccuracy of the responses as the topic readers can only comment upon the statements as being provided and assume that those statements are in context with the question being put to the forum.

Then you have misunderstood the expression - “polluting the waters” means making things more messy than they need to be - the internal transfer Journal (long to short) just makes the single account messy without any real benefit.

And this is the real issue, that the “voluntary” internal Journal reclassification of long to short (a valid general ledger transaction) somehow can’t exist “by law” even though that it has actually occurred. The only way to avoid this “by law” conflict is not to create the “polluting the waters” Journal in the first place, however if you are going to maintain a single account - which in itself conflicts with accounting standards - you have to accept that the General Ledger Transactions report can’t selectively eliminate self cancelling transactions.

In closing, Users are entitled to put forwarded any topic, but just because a response doesn’t satisfy the User’s expectations, this doesn’t permit the User to personally attack / label the responder. By all means challenge and debate but remain within the context of the statements.

Dear @brucanna,

don’t try to save yourself. You finally found out that the dates were correct.

I don’t care about the content of the answer, a thing can be feasable or not.

I just pointed out, politely, that your answer was rude and impolite, as it was.

Regards

One wasn’t as one hadn’t done nothing that required them to do so.

[[quote=“Davide, post:9, topic:17149”]
that your answer was rude and impolite,
[/quote]

Pardon - to be rude and impolite one has to made adverse, hostile or negative personal comments towards another. You are the only one who has resorted to that type of commentary.

Anyhow, be that as it may.