Vat opening - Account, Bal. Account is same

gete

Dear folks,

we are going to update the opening entries for Vat .

IN Navision Indian localization manuals it explain Account no, Bal account no should be same.

what my query is if we teke the same then Vat reports will update , but G/ l entries will show the value zerobecause credit debit pass to same account.

then how to update the G/L entries regarding Vat opening amount .
Is it the correct way to take same account number to update the opening entries.

In all manuals it is same regarding Excise , service...

please clarify my doubt .

AdamRoue

Why are you creating the opening entries (Sales and Purchase) with VAT?

This will create a mess. Your open entries will go back across numerouse closed VAT periods, so you immediately have a reconciliation nightmare between paid and unpaid, and you will need to pay the VAT paid to get back to the current position.

Why are you not simply bringing over the VAT balance from the last reported close and bringing the opening entries in without VAT to reflect the debtor/customer/creditor/vendor positions?

Obviously the balancing and source account should not be the same, otherwise it will balance to zero - this is not really a localisation statement.

The only way to get the VAT reports to work correctly is to bring in EVERY transaction, then pay the paid ones and receive the cash for this received, otherwise your VAT reports would be wrong anyway.

The VAT opening entry would simply be the total as brought in for any other TB opening balance.

Deep

The G/L balances are updated at the time of Trial Balance upload.
The opening entries manual explains how to populate the specific entry tables, like Excise entry, VAT entry and so on.
If the same g/l account is not used, the G/L values will be duplicated.

AdamRoue

But you can skip these two accounts with the TB upload as the totals are made up from the detail posted.

Deep

AdamRoue wrote:

But you can skip these two accounts with the TB upload as the totals are made up from the detail posted.

Correct, in case where a Balancing control account is used for TB upload.
If the entire TB is uploaded in one go, without ommiting any G/L account, then to populate the specific entries, the same account must be balanced in the journal.

ssingla

AdamRoue wrote:

Why are you creating the opening entries (Sales and Purchase) with VAT?

This will create a mess. Your open entries will go back across numerouse closed VAT periods, so you immediately have a reconciliation nightmare between paid and unpaid, and you will need to pay the VAT paid to get back to the current position.

Why are you not simply bringing over the VAT balance from the last reported close and bringing the opening entries in without VAT to reflect the debtor/customer/creditor/vendor positions?

Obviously the balancing and source account should not be the same, otherwise it will balance to zero - this is not really a localisation statement.

The only way to get the VAT reports to work correctly is to bring in EVERY transaction, then pay the paid ones and receive the cash for this received, otherwise your VAT reports would be wrong anyway.

The VAT opening entry would simply be the total as brought in for any other TB opening balance.

That is how NAV IN version works and it is better i keep :-# on it. The requirement are too complex to be handled from opening balance alone.
The purpose of same debit and credit account is that you should upload the opening balance of Vat account with the G/L TB.

AdamRoue

Hi Sandeep

So in summary with the IN localisation you HAVE to bring in the opening transactions AND reflect the VAT elements of these. You set the balancing account to the VAT account to have a balance of 0 after the import, then create the reconciled balance through the TB journal. After this you need to close off all of the reconciled VAT from previous periods to leave you with transactions that actually need to be involved in the next VAT declaration. Sounds horrible :shock:

Zephyr

Individual VAT opening entries are not required to be reported in the next period. The way I look at is :

1. Upload opening balance of VAT as per the last VAT statement submitted to Government with no financial impact. This should be done on the date of go-live (which I prefer to be a) Financial year start b) quarter start c) month start (priority wise))
2. Upload the opening TB (better if reconciled else a supplementary Journal Voucher can be posted later on).

I will narrate one of the cases that why we need it. As per rule in some states in India VAT receivable on Capital Item purchased is divided in multiple years. The vat records should reflect the distribution but the financial statement can have a consolidated balance.

gete

ssingla wrote:

The purpose of same debit and credit account is that you should upload the opening balance of Vat account with the G/L TB.

If i take same account No as G/L account , & Bal . account . then Net change value will show Zero .

then what is the use ?

Please correct me if i am wrong.

Deep

gete wrote:

ssingla wrote:

The purpose of same debit and credit account is that you should upload the opening balance of Vat account with the G/L TB.

If i take same account No as G/L account , & Bal . account . then Net change value will show Zero .

then what is the use ?

Please correct me if i am wrong.

Read carefully. The line says that "....you should upload the opening balance of VAT account with the G/L TB". Mean you are nullifying the effect of debiting the account by crediting the same account, as the same value is already/will be posted to the account with the TB Upload.
The purpose of the procedure is to populate the Tax entry, Excise entry and the similar tables, as it cannot be done along with TB Upload.

gete

Thanks Deep,

if it Nullifiies that amount in G/L entries.

Then again do i need to pass that some amounts through JV

Deep

if it Nullifiies that amount in G/L entries.

Then again do i need to pass that some amounts through JV

Yes. The amounts are posted at TB Upload.
I suggest you discuss the same with some finance people. This is more of a business logic that how the company wants their opening entries in their books of accounts. There is nothing technical about it.