Once an account has transactions recorded against it, you may find that it's become more complicated than before to change the account code, account type or to make the account inactive. So, before you start creating and posting journals or modifying balances, we recommend reviewing your client's chart of accounts to ensure that the chart of accounts is set up correctly and is ready to produce financial reports in Statutory Reporter.
Preparing different types of data
New AccountRight or Essentials files are generally set up as company entities with the Retained Earnings and Current Year Earnings accounts set up automatically. If the client is a company, you can skip to check your opening balances.
However, if you're configuring data for a Trust or Partnership that distributes earnings, there are a few things to check to make sure the Chart of Accounts can be reported correctly in Statutory Reporter. Use this guide to understand how to prepare your clients file if it is a trust or partnership.
The following examples are taken from AccountRight, but you can use the information for setting up a Partnership or Trust in MYOB Essentials.
Setting up the Chart of Accounts
Open the AccountRight or Essentials company file and set up equity accounts for each partner. For example:
|If you're using...||then...|
|AccountRight 2015.4 or later|
Select Profit/Loss Distribution in the Setup menu and allocate the percentage of profits that are to be distributed to each partner.
AccountRight 2015.3 or earlier
Distribute profit/loss by adding a journal and recording a manual journal entry.
Reporting Partner Funds
To report on Partner Funds in the Balance Sheet, Notes and Appropriation statement, map each account type to the following account groups.
All Partner Accounts
Balance Sheet > Equity > Partners' Funds
Balance Sheet > Equity > Retained Earnings > Retained Earnings
Current Year Earnings
Balance Sheet > Equity > Current Year Earnings > Current Year Earnings
In the following examples, we've set up our beneficiary accounts as equity accounts. But if you've set up your beneficiary accounts as a liability to the trust, you can still use the examples to report correctly in Statutory Reporter.
Setting up the Chart of Accounts
Open the AccountRight or Essentials company file and set up accounts in the Equity tab of the Account List for each beneficiary. For example:
If the trust has made a profit over the financial year, use a journal to distribute the profit to each receiving beneficiary's share of profit account.
If you're using AccountRight version 2015.4 or later, to post a journal to the Share of Profit accounts, make sure that Entity Type in AccountRight's Profit/Loss Distribution window is set to Company.
In Client Accounting, you only need to do one journal to distribute the profit and raise a liability for Unpaid Present Entitlements (UPE) at year end.
Where the trust has made a loss during the year, you won't need to process any journal at the end of the year to record the accumulated loss. Where the trust makes a profit in a future year, you will only need to perform a distribution journal for the net profit after accuulated losses have been deducted.
Reporting Beneficiary Funds
Before you produce any reports, you'll need to map your accounts to the appropriate account group. To report profit and profit distributed correctly, we recommend the following setup:
|All Beneficiary Accounts||Balance Sheet > Assets and Liabilities > Assets > Current Assets > Unpaid Present Entitlements (DR)|
Balance Sheet > Assets and Liabilities > Liabilities > Current Liabilities > Unpaid Present Entitlements (CR)
|Distribution to Beneficiaries||Balance Sheet > Equity > Retained Earnings > Current Year Earnings|
Profit and Loss Statement > Appropriation > Other
|Retained Earnings||Balance Sheet > Equity > Retained Earnings > Retained Earnings|
|Current Year Earnings||Balance Sheet > Equity > Current Year Earnings > Current Year Earnings|
Assuming that all profits made by the Trust are distributed to beneficiaries, the bottom-line figure on the Income Statement will be $0 and the Current year earnings in the Balance Sheet will also have a zero balance. All amounts owing to beneficiaries including the Share of Profit for the year appears in Unpaid Present Entitlements on the Balance Sheet.