• From: RD Congo
  • Registered: 10/13/2017
  • Posts: 6

Topic: GL account setup profit/loss retained earnings

Hello,
I am running in serious trouble for the GL setup,  checked in previous posts but do not solve the problem.

We are under OHADA accounting system (almost like french type COA). P&L and retained earnings account in our system are under "assets type" and cannot set it in the system, neither retained earning (still an asset account) as a balance account? please enlight me I do not understand (maybe my english is so bad...)

What is the rationale in FA for P&L? for retained earnings?

Our Procedure in calculating profit and loss has 9 steps:

1. Margin on goods  = income - expense +/- stock variation
2. Margin on components = income - expense +/- stock variation
3. Added value = (Margin on goods + Margin on components + extra income + grants + other income) - (stocked components and supplies purchase) - other purchases - packaging purchase +/- stock variation extra supplies - shipping - services (ie bank charges etc...) - taxes
4. surplus = added value - personnel charges
5. P&L = Surplus + extra stuff
6. financial income
7. ordinary activity income = P&L- financial income
8. extraordinary income
9.fiscal result  = ordinary activity income + extraordinary income - income tax


Now, how can I integrate it?
Even if i go manual and dont use this i cannot set the other accounts because of these two so exchange rate loss cannot be set etc...

How can be calculated income tax (35% yearly)?

Thanks,
JG

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: GL account setup profit/loss retained earnings

Start from a blank chart master, chart class and chart groups set of tables and manually put in whatever classification you want. You can nest the Group's Accounts as well as desired to get your OHADA CoA.

In your parlance, you mean that your "fiscal result" other than income tax is FA's native P&L account. All the others can be nested in the P&L.

From Wikipedia:

OHADA is a system of corporate law and implementing institutions adopted by seventeen West and Central African nations in 1993 in Port Louis, Mauritius. OHADA is the acronym for the French "Organisation pour l'harmonisation en Afrique du droit des affaires", which translates into English as "Organisation for the Harmonization of Corporate Law in Africa".

ODOO Apps supports OHADA natively and is developed on GitHub, being based on Python.
This French Article may be useful.
Will this CoA meet your needs?
OHADA Accounting Plans

See the wiki for more info.

apmuthu's Website

  • From: RD Congo
  • Registered: 10/13/2017
  • Posts: 6

Re: GL account setup profit/loss retained earnings

Thank you Apmuthu for the prompt response, i already have an OHADA COA, no problem with that, i m in trouble with system and general setup.
if i do not set P&L and retained earning accounts i cannot set other accounts ie bank charges etc...
we have P&L and retained earning accounts in ohada but they are both balance accounts, equity types,
there a warning stating retained earnings should be a balance account (check), P&L an expense account (problem)

My questions are :

how does FA calculate P&L and retained earnings?
I can calculate and make entries manually how could I bypass it if i can't really apply to our coa?
how can i integrate income tax 35% on profit ,yearly?

thank you,

JG

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: GL account setup profit/loss retained earnings

P&L is calculated at the end of the year by taking the balance of all expense and income accounts and stock differentials and then auto inserted. Only the Trial Balance and computed P&L are used during the year in a similar manner. What you want is a hierarchy of P&L accounts in the Accounts Master. You are free to change the nomenclature for the Account Classes, Account Groups and Account heads.

Since most non African FA users are not familiar with the OHADA implementation, I had to look it up and provide some links for others to evaluate and advise quickly.
Look up the FA users list and see if any are from your region willing to assist.

Alternatively, upload an excel sheet of your current OHADA accounts master and their desired classification and provide the link here to assist others to advise.

@joe: Providing a native OHADA Chart would increase the FA footprint into West and Central Africa tremendously.

apmuthu's Website

  • joe
  • Administrator
  • Offline
  • Registered: 03/15/2007
  • Posts: 5,107

Re: GL account setup profit/loss retained earnings

Just to clarify some things.

When the fiscal year is closed, all the balance accounts must balance as well as all the P&L accounts must balance.

A final Balance Sheet after closure must be in balance.

You can do these operations yourself according to COA standards, but if the balance accounts are not balanced, FA must do that for you, and therefore we need a standard  P&L account for balancing the P&L accounts. This account is usually created as the last account in the P&L section.

If everything is in balance before closure, there are NO FA transactions.

This P&L account is only for balancing the P&L accounts if it is not already done.

This approach also make it possible to select projects P&L over several years, as well it is possible to select normal P&L statements from closed years.

I hope this make things better understandable.

To help you with a CoA for your country, please provide us with an excel file containing your accounts.

We have no resources to do this job ourselves.

Joe

  • From: RD Congo
  • Registered: 10/13/2017
  • Posts: 6

Re: GL account setup profit/loss retained earnings

Thank you both for the support, my question is actually technical, on how works p&l account balancing  in FA, in OHADA we do not balance it in an expense account, rather in a class 1 (capital) from P&L class accounts 7(income) and 6 (expenses and COGS) please refer to my first post on how it s calculated.

If i create a P&L account in 6 class, it will balance but when closing the fiscal year i create manual entries for margin, added value, etc...in class 1 (capital) then trial balance will not balance anymore

My issue is: can we disable in system and general setup P&L account or an option to choose later? if i don't choose an account i cannot choose bank charges account, exchange variances account, loss on asset disposal account, etc... which i think are very important. (better option for me as i don't know how it calculates P&L and can do manual entries)

Or disable P&L account validation (that is has to be an expense account).

Thanks a lot,

Even better, I have created sql for OHADA (will attach it when i reach office), but is for DR Congo and if applied to other countries it needs minor changes.

Cheers,

JG