openerp-expert-accounting team mailing list archive

[Graeme Gellatly <784339@xxxxxxxxxxxxxxxxxx>]

Vinay,

You don't get it, I couldn't care less what types you have.  They don't
matter.  You have serious bugs in the report and some more minor ones I
don't report yet, like you cannot filter a balance sheet between 2 periods
or dates, it is a point in time report.  And anyway I just check latest
6.0.2 sources again and in the balance sheet parser your types are still
hard coded as 94<http://bazaar.launchpad.net/%7Eopenerp/openobject-addons/6.0/view/head:/account/report/account_balance_sheet.py#L94>

        types = [

  95<http://bazaar.launchpad.net/%7Eopenerp/openobject-
addons/6.0/view/head:/account/report/account_balance_sheet.py#L95>

            'liability',

  96<http://bazaar.launchpad.net/%7Eopenerp/openobject-
addons/6.0/view/head:/account/report/account_balance_sheet.py#L96>

            'asset'

  97<http://bazaar.launchpad.net/%7Eopenerp/openobject-
addons/6.0/view/head:/account/report/account_balance_sheet.py#L97>

        ]


so where is this new equity type?  Equity is no longer on the balance sheet?

You have function called sum_cr which actually sums debits and vice versa.
You have a balance sheet where the totals do not add up to the amounts above
it (depending on profit or loss)

If your bank account is $1000 overdrawn, it will show as being $1000 in
credit.
If you generate a loss or a profit, you add or subtract it from different
sides of the ledger

Vinay - this is fundamental errors, not wishlist or opinion.

On Fri, May 20, 2011 at 1:04 AM, Vinay Rana (openerp) <
784339@xxxxxxxxxxxxxxxxxx> wrote:

> Hello Graeme Gellatly,
>
> I know the balance sheet formula :
> Assets = Liabilities + Shareholders' Equity
>
> Current report is supporting equity type.The only thing remain is set the
> proper configuration in user defined account type form.
> The existing equity type is not shareholders equity.If you want this as
> shareholders equity then you just need to change the selection 'Balance
> Sheet(Liability side).'
> I have set this as a opinion for other thing.
>
> We already assigned one of the following wishlist bug for sign related
> issue:
> https://bugs.launchpad.net/openobject-addons/+bug/740132
>
> Hope this will help you
> Thanks.
>
> --
> You received this bug notification because you are a direct subscriber
> of the bug.
> https://bugs.launchpad.net/bugs/784339
>
> Title:
>  [stable 6.0.2] Account Balance Sheet parser logic error leads to
>  incorrect totals amounts and developer confusion
>
> Status in OpenERP Modules (addons):
>   Opinion
>
> Bug description:
>  If you look at the section where it calculates sum_dr and sum_cr it is
>  incorrect.  Well it is technically correct, but in the sense of having
>  a balance sheet that balances it is incorrect.
>
>  Take the accounting equation property = property rights expanded to
>  assets = liabilities + equity
>
>  In the case of a net profit we incorrectly add the result to sum_dr,
>  our equity has increased afterall, so sum_cr should increase, (this
>  behaviour is correct, except the function is named wrong) however in
>  the case of a net loss we subtract the amount from sum_cr (which
>  should be sum_dr) which is incorrect as our equity has reduced.
>
>  However here is the first bug - sum_dr and sum_cr are around the wrong
>  way - sum_cr is increased for asset accounts, and sum_dr is increased
>  for liabilities - it should be the other way around
>
>  Put another way, for a balance sheet, we don't really want the totals
>  to be the sum of dr's and cr's, we want it to be the total of the
>  stuff on the left (Assets) and the total of the stuff on the right
>  (Property Rights).
>
>  So in the case of a Net Profit we must increase equity (credit) and in
>  the case of a net loss we must reduce equity (credit).  At no point
>  should we be changing debits.  The value of our Assets has not changed
>  (in so far that a net loss already reduces our assets), it is our
>  equity that has reduced.
>
>  Now to make this one step more confusing, and for some unknown reason
>  it has been decided to leave liabilities as a negative balance, and
>  then on the report use absolute value which is also incorrect.  Many
>  assets and liabilities should have a balance opposite of the standard,
>  Accumulated depreciation for example in Assets,  VAT Paid in
>  Liabilities, Bank Accounts temporarily in overdraft.
>
>  In my own parser, which I have written, to resolve this we declare a
>  dictionary called signs and at the point we compute the
>  account.balance we multiple it by the sign.
>
>          sign = {
>              'fixed_asset': 1,
>              'asset': 1,
>              'liability': -1,
>              'fixed_liability': -1,
>              'equity': -1,
>              }
>
>  We use more types than standard but you get the idea.  Assets are
>  their balance, liability is their balance *-1.
>
>  Then all we do in the for account in accounts loop is make the
>  balance: account.balance * sign[typ]
>
>  So in summary
>  sum_dr and sum_cr are round the wrong way.
>  Adding a net loss to Assets is incorrect - it should be subtracted from
> Equity.
>  values (already reported bug) should not be absolute, but rather their
> inverse for liability and equity accounts.
>
> To unsubscribe from this bug, go to:
> https://bugs.launchpad.net/openobject-addons/+bug/784339/+subscribe
>

-- 
You received this bug notification because you are a member of OpenERP
Accounting Experts, which is a direct subscriber.
https://bugs.launchpad.net/bugs/784339

Title:
  [stable 6.0.2] Account Balance Sheet parser logic error leads to
  incorrect totals amounts and developer confusion

Status in OpenERP Modules (addons):
  Opinion

Bug description:
  If you look at the section where it calculates sum_dr and sum_cr it is
  incorrect.  Well it is technically correct, but in the sense of having
  a balance sheet that balances it is incorrect.

  Take the accounting equation property = property rights expanded to
  assets = liabilities + equity

  In the case of a net profit we incorrectly add the result to sum_dr,
  our equity has increased afterall, so sum_cr should increase, (this
  behaviour is correct, except the function is named wrong) however in
  the case of a net loss we subtract the amount from sum_cr (which
  should be sum_dr) which is incorrect as our equity has reduced.

  However here is the first bug - sum_dr and sum_cr are around the wrong
  way - sum_cr is increased for asset accounts, and sum_dr is increased
  for liabilities - it should be the other way around

  Put another way, for a balance sheet, we don't really want the totals
  to be the sum of dr's and cr's, we want it to be the total of the
  stuff on the left (Assets) and the total of the stuff on the right
  (Property Rights).

  So in the case of a Net Profit we must increase equity (credit) and in
  the case of a net loss we must reduce equity (credit).  At no point
  should we be changing debits.  The value of our Assets has not changed
  (in so far that a net loss already reduces our assets), it is our
  equity that has reduced.

  Now to make this one step more confusing, and for some unknown reason
  it has been decided to leave liabilities as a negative balance, and
  then on the report use absolute value which is also incorrect.  Many
  assets and liabilities should have a balance opposite of the standard,
  Accumulated depreciation for example in Assets,  VAT Paid in
  Liabilities, Bank Accounts temporarily in overdraft.

  In my own parser, which I have written, to resolve this we declare a
  dictionary called signs and at the point we compute the
  account.balance we multiple it by the sign.

          sign = {
              'fixed_asset': 1,
              'asset': 1,
              'liability': -1,
              'fixed_liability': -1,
              'equity': -1,
              }

  We use more types than standard but you get the idea.  Assets are
  their balance, liability is their balance *-1.

  Then all we do in the for account in accounts loop is make the
  balance: account.balance * sign[typ]

  So in summary
  sum_dr and sum_cr are round the wrong way.
  Adding a net loss to Assets is incorrect - it should be subtracted from Equity.
  values (already reported bug) should not be absolute, but rather their inverse for liability and equity accounts.