There are two methods available for handling the accounting in the current liability section of a set of accounts for a trust. These options have implications for how you generate special purpose reports from the LodgeiT Reporting module.
Option A- Reflect only the closing balance of the beneficiaries (watch the video)
- Simple to handle in accounting software
- Less line items mean less confusion for novice users
- More tedious in the LodgeiT SPFR Reporting module
- Won't support automated post-back method
Option B - Reflect all sub-accounts for the beneficiaries, including share of profit, capital introduced and drawings (watch the video)
- No need to make any manually value entries in LodgeiT
- Provides granular account detail i.e. profit reflects in a profit account
- Supports automated postback (coming to LodgeiT soon).
- More tedious in the accounting software (unless there is auto-postback functionality from LodgeiT)
- Requires adjusting entries to move prior year balances to an opening balance account for each partner