A business setup as a partnership where it’s is owned by two or more partners, or a trust type setup where the business has multiple beneficiaries has historically had to manually record general journal transactions in order to distribute the profit or loss generated.
The AccountRight 2014.4 release included a new core feature where a partnership or trust can set the percentage split between beneficiaries to share profits/losses generated by the business. AccountRight will then be able to calculate the retained and current year earnings accordingly, which will show in the chart of accounts and index of reports.
How does the setup work?
For each partner/beneficiary, simply create accounts in the Equity section of the Accounts List.
Inside the Setup menu of AccountRight select the Profit/Loss Distribution option, from here you can change the Entity Type and add each partner (Partnership) or beneficiary (Unit Trust) along with relevant linked “retained earnings” & “current earnings” equity accounts. The last step requires you to set the amount in which the profit/loss distribution percentage is split.
How will this affect the API?
The “Profit/Loss Distribution” setup was exposed within the API for the AccountRight 2015.1 release.
Both our GeneralLedger/Account and GeneralLedger/AccountRegister endpoints have been updated to handle any company file that is either setup as a Partnership or Unit Trust. Meaning the API can calculate the split ratios and balances across the different range of accounts when it comes to retained & current earnings.
Please be aware the default 3-8000 Retained Earnings and 3-9000 Current Earnings created for a company file will show balances of $0 if using an Entity Type of Partnership or Unit Trust.
If the Entity Type is set to Company then the standard equity accounts and functionality applies.
Article is closed for comments.