Re: Len Silverston's Universal Data Models sanity

From: Laconic2 <laconic2_at_comcast.net>
Date: Fri, 7 May 2004 12:20:22 -0400
Message-ID: <ucudnVoLse2UKgbdRVn-iQ_at_comcast.com>


"Leandro Guimarăes Faria Corsetti Dutra" <leandro_at_dutra.fastmail.fm> wrote in message news:pan.2004.05.07.13.59.44.68631_at_dutra.fastmail.fm...

>

> OK, we do have that. We call it 'plano de contas', or an
> accounts plan. As I said, I don't know the US ones, but ours is
> significantly different from the German one.

Aside: Thanks for "plan de cuentas", Alfredo.

All of the commonplace bookkeeping systems that I've seen (Quickbooks, MYOB) have a "chart of accounts" built in, and several template charts of accounts for different kinds of businesses. They all conform to the "rules of accounting", but they reflect, within those rules, very different ways of organizing information. I've seen the chart of accounts for a hospital, and for a dotcom. In order to understand that they conform to the same rules, you have to abstract out a lot of the subject matter.

Why would a US company do accounting differently for Brazilian stakeholders and for American stakeholders?
Aside from fraud, there's a basic reason:

Bookeeping systems have to conform to the laws to the country. Some countries have laws regarding bookkeeping practices that directly contradict standard accounting practices. Worse yet, they sometimes contradict each other's laws. So, it's possible that, in order to conform to Brazilian law, they might have to record some transaction as increasing "income", but, in order to conform to the SEC's rules, they would have to record the same transaction as increasing "debt".

This is the limit of my knowledge of accounting, so I'll let subject matter experts take it from here. Received on Fri May 07 2004 - 18:20:22 CEST

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