French Chart Of Accounts
Arnaude Kubiak
Accounting standards in France and in Spain differentiate general accounts and subsidiary accounts, as well as directory accounts associated e.g. with customers and vendors. The difference between Polish and French (Spanish) chart of accounts is the lack of dash separating particular levels. Each account level is determined with adequate number of characters.
For instance, account number 752: Revenues from financial transactions. The account was created on the highest level possible. The following levels are created by adding another number to given account number without dashes. The child accounts (i.e. accounts on lower level) against the account 753 are the following accounts:
A new level can be created by adding one or several characters (numbers) to the number of the parent account. The method of creating a multi-level structure of the chart of accounts will be presented on the example of creating a clearing account of directory type for customers and vendors.
In the French/Spanish version of the system, accounts can be created through posting schemes in the same way they are created in standard version. This means, that when creating a subsidiary (child) account, its number entered from the level of posting scheme items, should contain dashes. The purpose of the dashes here is to specify the level on which the account is being created. The dashes will not be included in the number of the created account.
If account number 303 or 3031 already exists, the system will properly recognize the number and will create a subsidiary account: 3031MATERIALS If e.g. the account number 3031 already exists in the system, it is possible to type the following:
Places where it is possible to create an account are as follows: journal entry, accounting note, cash-bank transactions, directory: Customer/Vendor, Employee, Institution, Item, Warehouse, Bank, VAT Rate, Fixed Assets in Accounting tab.
When selecting an account, for instance, on the form of cash-bank account, it is necessary to enter the number of the existing account without dashes or other additional characters. For instance, it is possible to enter an account number in the following form: 10011. This account is secondary against the account 1001 which, in turn, is secondary against the one on the highest level, that is the account number 100.
We have new French entities on AX, we have used our existing Chart of Accounts US GAAP. We now need to look at requirements for the French GAAP. Does anyone have suggestions on have to this on AX or have a similar setup already in place? Is it posting layers, use an alias?
I saw many companies setting up their French COA as a separate financial dimension that is linked (fixed) to the US GAAP COA respectively ledger accounts. Please note that this requires a 1:1 relationship between the US GAAP and French ledger accounts.
An alternative is using a separate French COA for your companies in France and do the mapping later on e.g. in Management Reporter. (See e.g. dynamicsax-fico.com/.../management-reporter-reports-based-on-different-chart-of-accounts)
Sage Business Cloud Accounting, (formerly known as Sage One)'s version available in Canada, now has most of the features of Sage 50's Pro edition. This means a lot more flexibility for the small business builder and entrepreneur.
Note: You no longer need to be subscribed to a Sage 50cloud subscription to be able to map your chart of accounts. If your plan is to move from Sage 50 CA to just using Sage Accounting, simply set up the NEW migration tool to move data.See our latest post dated 02/27/2019 here.
You can always re-map missed accounts after. All accounts need to be mapped. Consult with a certified partner from Sage's Accountant's network as an option for personalized accounting help (go to to find a partner today!).
In France, the accounting of Undertakings for Collective Investment, or UCIs, is organised by a chart of accounts proposed by the Autorit des Normes Comptables (ANC) and approved by the Commission des Normes Prives. The chart of accounts for UCIs has not been properly revised since 2003, though some changes have been adopted to accommodate new products.
But in F.01, if you do not give company code, it will give error that Chart
of Account and Company Code are not compatable. Alternate COA is not
directly linked to Company Code, it is link to Operational Chart of Account.
Is there any way to resolve this problem?
Regards
Indeed in F.01 you can choose the alternative accounts and even alternative
languages if necessary. Also if you print out (release 4.6c) you can have
your print out in ALV format , which would allow you to create a format
with alternative accts next to the Operational accts( can be very handy)
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You will keep your global chart of account based on your groups demands, but
the on the company code side of the chart of account you just type in the
alternative account based on CAFR. In transaction OBY6 you allocate CAFR as
the country chart of account at the company code level.
We have to continue to use the present chart of accounts since its global
chart of accounts and some transactions have already taken place in this
france company code which has already been assigned to thsi chart of
accounts.
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
The Fama and French Three Factor model highlighted that investors must be able to ride out the extra volatility and periodic underperformance that could occur in the short term. Investors with a long-term time horizon of 15 years or more will be rewarded for losses suffered in the short term. Given that the model could explain as much as 95% of the return in a diversified stock portfolio, investors can tailor their portfolios to receive an average expected return according to the relative risks they assume.
The main factors driving expected returns are sensitivity to the market, sensitivity to size, and sensitivity to value stocks, as measured by the book-to-market ratio. Any additional average expected return may be attributed to unpriced or unsystematic risk.
The Fama and French model has three factors: the size of firms, book-to-market values, and excess return on the market. In other words, the three factors used are SMB (small minus big), HML (high minus low), and the portfolio's return less the risk-free rate of return. SMB accounts for publicly traded companies with small market caps that generate higher returns, while HML accounts for value stocks with high book-to-market ratios that generate higher returns in comparison to the market.
In 2014, Fama and French adapted their model to include five factors. Along with the original three factors, the new model adds the concept that companies reporting higher future earnings have higher returns in the stock market, a factor referred to as profitability. The fifth factor, referred to as "investment", relates the concept of internal investment and returns, suggesting that companies directing profit towards major growth projects are likely to experience losses in the stock market.
Strategic CFO (link: strategiccfo.com) publishes one of the better better examples. While it is better than some examples, it still is not particularly good. Its account numbering is not easily expandable. Inventory has missing material. Accumulated depreciation/amortization is presented as separate account class, which makes the COA cumbersome (each unit of account appears in two places). Organization costs are not an asset (at least not under IFRS or US GAAP). Rent is rarely accrued. Subclassifying Cost of Goods Sold by product is useful from a managerial perspective, but in practice it will lead to hundreds of duplicate sub-accounts or the need to reclassify expenses items like direct material or direct wages leading to messy accounting. Also, not including depreciation expense in COGS (it is all listed in operating expenses) ignores basic, full absorption costing principles. The list of items classified as operating expenses seems fairly arbitrary.
For example, when we design a custom COA for a company, if the company is small and simple (one division, not listed on any exchange), it can take days to make sure the COA fulfills both the company's tax reporting obligations and management's informational needs.
Sure, it is true that "tax and audit CPAs have the custom reporting software to easily convert your management-oriented chart of accounts into their format. Just be sure to make it easy for them by incorporating any special accounts they need into your remodeled chart accounts."
The problem is the "Just be sure to make it easy for them by incorporating any special accounts they need into your remodeled chart accounts." is the hard part and, unless done very well, often leads to a tax CPA's services being more costly than they would otherwise have been.
Once that standard has been selected, the COA is designed around that standard's recognition guidance. The more closely it adheres to that guidance, the less likely mistakes in applying that guidance will be made.
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