Odoo Addons (MOVED TO GITHUB)

It is really needed that the debit and credit are positive?

Asked by Borja López Soilán (NeoPolus)

Currently on the OpenERP accounting we have some constraints like this one:

_sql_constraints = [
        ...
        ('credit_debit2', 'CHECK (credit+debit>=0)', 'Wrong credit or debit value in model !'),
    ]

That 'credit_debit2' is checking that the accounting entries are always positive. But the question is:

Is it really needed? Why shouldn't we use negative entries?

I mean, on Spain nothing prevents to use negative accounting entries, so a lot of accountants are used to do that on some specific cases like some kinds of refunds (that also means that accounting programs usually allow the users to do it).

So, on paper, to cancel this sale invoice:

                                    Debit Credit
(430) Customers 118
(700) Sales 100
(477) Taxes 18

Some accountants would create accounting entries like this one if the invoice was just invalid (a cancel):

                                    Debit | Credit
(430) Customers -118 |
(700) Sales | -100
(477) Taxes | -18

Instead of this other option that would be used mostly when doing a real refund of the goods:

                                    Debit | Credit
(7080) Refunds 100 |
(477) Taxes 18 |
(430) Customers | 118

Question information

Language:
English Edit question
Status:
Answered
For:
Odoo Addons (MOVED TO GITHUB) Edit question
Assignee:
No assignee Edit question
Last query:
Last reply:
Revision history for this message
Ferdinand (office-chricar) said : 		#1

IMHO negative values should be allowed and should be used for "cancelling" postings.

for accountant the sum(debit) has a certain meaning ("turnover" debit/credit)
the way it is done now the sum says nothing useful at all any more.

Revision history for this message
filsys (office-filsystem) said : 		#2

+1
In Romania, invoice canceling (refund) means accounting entries with
negative value, like in your sample. We had to make some customisation
for account module for that.
Thanks.

Revision history for this message
David Mitchell (www.novapointgroup.com) (david-novapointgroup.com) said : 		#3

Their is a discussion in the Accounting experts group about this. What is being described is Storno accounting - which allows for negative debit and credit entries. Many countries do not allow storno accounting entries and operate under contra accounting - where the entries end up being positive. In the accounting experts discussion I added an example of another ERP system which demonstrates the work that needs to be considered in order to handle Storno accounting - which is removal of specific current restrictions in the system and reworking reports - in particular income statements. Balance sheets are not really affected. I'm certainly not against adding the capability - but as anything affecting the financial/accounting aspects of the system it should be well thought out, spec'd, have solid regression testing outlined and documented. We owe it to ourselves and to the users of the system to trust the "calculations".

Filsys - if you've made a customisation already - do you have the specs for Storno accounting that you could share with the rest of the group?? That would be a good start. . . in the meantime I recommend everyone jump over to the Accounting experts group and read through some of the additional discussions there.

Revision history for this message
David Mitchell (www.novapointgroup.com) (david-novapointgroup.com) said : 		#4

To add another note . . .some of the other Opensource ERP systems support Storno accounting - although I can't attest to "How well they comply with it across a well thought out structure". Certainly many commercial systems allow for this - not typically setup as a default option - but enabled with configuration settings.

Revision history for this message
Borja López Soilán (NeoPolus) (borjals) said : 		#5

As David states, this has been answered on the Accounting Experts mailing list, you can follow the thread here:
https://lists.launchpad.net/openerp-expert-accounting/threads.html#00724

Can you help with this problem?

Provide an answer of your own, or ask Borja López Soilán (NeoPolus) for more information if necessary.

To post a message you must log in.