Opening and closing are parameters, not code

Status: accepted

Context

A year-end close looks like a national variant per country. In practice every close moves the result out of the income statement and zeroes every income and expense account; what differs is the account the result travels through.

Decision

Three styles, named after the mechanism. country_defaults.closing_style:

retained_earnings — straight into retained earnings;
result_accounts — into a current-year result account on the balance sheet, awaiting the meeting that allocates it (e.g. 120 / 129);
appropriation_accounts — through accounts that are part of the income statement, then to retained earnings (e.g. 693 → 140, 793 → 141).

The values name the mechanism, never a country.

A profit account and a loss account. Charts that keep them apart would otherwise need one account allowed to go debit, which their filing formats refuse. The pack names current_year_result_profit, current_year_result_loss, retained_earnings, retained_earnings_loss and the opening_journal_code.

None carries a default. A default style is one country's mechanism handed to every other. A pack that says nothing gets no_closing_defaults / no_opening_journal; ekwo pack check catches the same gaps. The style is asserted: appropriation_accounts requires accounts that do not carry forward, the others accounts that do.

The close writes no à-nouveaux. Reports read the ledger cumulatively, so a balance-sheet account already stands on 1 January at its 31 December figure; an opening entry would count it twice, and a test forbids it. The opening journal carries the first opening of a set of books (opening_balance) and year-end entries. Reversing this means changing the reports first.

entries.kind says what an entry is for, and only the year-end functions set it: normal, opening, closing, appropriation. A trigger refuses any other value unless a transaction-local flag set by opening_balance(), close_fiscal_year() or reopen_fiscal_year() is present. A reversal carries the kind of what it undoes. The appropriation entry is posted separately, before the closing entry, so a statutory income statement can show the movement on its appropriation accounts.

The allocation decided by a meeting is never in the close. Dividends, reserves and transfers of the result are later entries taken by people.

An opening balance refuses the income statement unless the caller passes p_allow_result_accounts — for taking books over in the middle of a year. It takes rows {account_code, debit, credit, contact_id, label}, what every previous system exports.

A close is undone by reversing. reopen_fiscal_year reverses what the close wrote and clears the flag, and refuses once a later year is closed or holds entries.

Consequences

Once a year is closed, its income statement read from its own movements is zero, as in any post-closing trial balance; financial statements leave the closing entries out.
Three conventions are the project's reading rather than cited rules (date of the closing entry; passing through appropriation accounts; posting the appropriation separately) and are flagged for an accountant in the module and pack READMEs.

Opening and closing are parameters, not code

Context

Decision

Consequences

See also