openerp-expert-accounting team mailing list archive

[Robin <robinstc@xxxxxxxxxx>]

Nhomar

It isn't a book that you need - its information from people that have 
practical experience of preparing accounts that meet relevant accounting 
standards!

You CANNOT assume that the date of a transaction or the date that is on 
a document is the date that is relevant to the transaction itself.

A couple of examples might suffice to illustrate this point.

*Payment for services consumed the previous year**
*
A good example is the billing of fees that are paid in arrears - such as 
those charged by an IP attorney for maintaining a watching brief on the 
client's behalf. The invoice for this is often received and dated well 
after the period to which it relates.

Certain commercial charges are adjusted for events that cannot be 
assessed until after the period they relate to (inflation adjustments, 
for example).

*Retentions*

When large scale projects/contracts are completed, the client often 
holds portions of the amounts until well after the contract is 
completed. This to ensure that the project is actually completed and 
that any problems are actually re-mediated.

Eventually these amounts are invoiced - they almost always related to 
prior periods ( how prior depends upon the terms of the contract).  The 
relevant date to be applied to capital project related transactions is 
usually the date that the capital item was first used in the production 
of revenue. Two years is quite common.

*General*

Many academics lack real world experience. In the English speaking 
world, there is a huge difference between people with experience as 
auditors and those with experience as accountants. So even fully 
qualified CPAs and ACAs who have a professional audit background often 
lack actual accounting experience, although their knowledge of theory is 
second to none. I do nor disagree with the tenor of what they say, I 
just know that as soon as you construct a hard and fast rule about 
transaction date ranges, a transaction occurs that is valid and yet 
breaks the rule.

So, remember, look out for transactions which relate to prior or future 
periods and avoid setting up rules that make handling such transactions 
difficult.

To simplify this kind of transaction, I usually advise processing such 
amounts through 'clearance' or suspension accounts, in the same way that 
prepayments are handled.

I generally operate on a weekly accounting cycle, (its no good looking 
at a set of management accounts six weeks after an event has occurred, 
its too late to do anything about it) and many transactions are 
initiated by other organisations  that account on a monthly or quarterly 
basis. For weekly accounts to be relevant, it is important that 
transactions which relate to a period that is longer than the current 
accounting period are correctly allocated to the actual periods to which 
they relate, ie were consumed in revenue related activities.

HTH



Robin St.Clair
On 02/04/2014 08:40, Nhomar Hernández wrote:
> 2014-04-02 1:39 GMT-06:00 Nhomar Hernández <nhomar@xxxxxxxxx 
> <mailto:nhomar@xxxxxxxxx>>:
>
>     I need a bug that support this statment.
>
>
> sorry *bug not "Book"
>
> We use this as reference:
>
> http://principlesofaccounting.com/
>
> And there you can see that dates are as OpenERP is managing them today.
>
>
> --
> --------------------
> Saludos Cordiales
>
> Nhomar G. Hernandez M.
> +58-414-4110269
> Skype: nhomar00
> Web-Blog: http://geronimo.com.ve <http://geronimo.com.ve/>
> Servicios IT: http://vauxoo.com <http://vauxoo.com/>
> Linux-Counter: 467724
> Correos:
> nhomar@xxxxxxxxxxxxxx <mailto:nhomar@xxxxxxxxxxxxxx>
> nhomar@xxxxxxxxxx <mailto:nhomar@xxxxxxxxxx>
> twitter @nhomar