openerp-india team mailing list archive

[jlinkels <784339@xxxxxxxxxxxxxxxxxx>]

Stefan,

I have subscribed you to the other bug report so you can continue to
follow that discussion. To avoid confusion I won't post about the P/L
problem here.

In the mean time there was some discussion on the OpenERP forum, which
shows that in 6.1 the account reports and settings have been changed.
Still not without errors though.

Hans

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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 Addons (modules):
  Fix Released

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.

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