Capital Accounts

July 05, 2026 18 views admin

Capital contributions Drawings Profit or loss allocations Control Account for Capital Accounts Capital Sub-Accounts

Capital Accounts — Complete User Guide — Two Accounts Web

Comprehensive guide for managing owner capital, partner contributions, drawings etc, and equity movements

What Are Capital Accounts?
Enabling the Capital Accounts Tab via Customize Menu
System Hierarchy
Field-by-Field Guide for Creating a Capital Account
Settings Configuration
Creating a Capital Account — Step by Step
Setting an Opening Balance for a Capital Account
Using Capital Accounts in Daily Transactions
How Capital Accounts Appear in Different Modules
Reports
How Balances Are Calculated
Sample Data and Report Output
Common Issues and Solutions
Accounting Regulation Compliance

1. What Are Capital Accounts?

Capital Accounts track the equity position of owners, partners, or investors in a business. They record:

Capital contributions — funds injected by owners
Drawings — funds withdrawn by owners
Profit or loss allocations — share of business results
Partner capital movements — changes in individual partner equity

Capital Accounts are part of Equity on the Balance Sheet. They have a Credit normal balance, meaning a positive balance represents owner capital that has been contributed and not yet withdrawn. A negative (debit) balance would indicate that drawings have exceeded contributions.

Key Concept: On the Balance Sheet, Capital Accounts appear under the Equity section alongside Retained Earnings and other equity components. They are always Credit-normal accounts.

The Capital Accounts feature is not visible by default. You must enable it through the Customize Menu before you can use it.

How to Enable Capital Accounts

Go to Customize Menu
Find the Capital Accounts toggle in the list of available tabs
Toggle it to the visible (on) position
Click Save
The Capital Accounts tab will now appear in the main navigation bar

What Becomes Available After Enabling

Once the Capital Accounts tab is enabled, the following sections appear throughout the system:

Capital Accounts tab — main listing of all capital accounts with their balances
Settings → Capital Subaccounts — create movement categories
Settings → Control Accounts → Capital Accounts — create custom balance sheet line items
Reports → Capital Accounts Summary — detailed movement report
Capital Account field — appears in Receipts, Payments, Journal Entries, Invoices, and other transactions

What Happens When It Is Disabled

Important: If the Capital Accounts tab is disabled:

The Capital Accounts line item will not appear in the Chart of Accounts
The Capital Account field will be hidden in all transaction forms
The Capital Accounts Summary report will not be available in Reports
The Capital Subaccounts and Control Account settings will be hidden

Customize Menu Additional Options

Within the Capital Accounts tab itself, you can also customize which columns appear. Click the Edit Columns button (small button at the bottom of the tab) to choose which columns to display or hide. Available columns include: Code, Name, Control Account, Division, and Balance.

3. System Hierarchy

The Capital Accounts system follows a four-level hierarchy from the broadest classification to the most specific:

Level 1 — Balance Sheet Group (Equity)
    │
    └── Level 2 — Balance Sheet line item (built-in or custom control account)
            │
            ├── Level 3 — Individual Capital Account (per owner or investor)
            │             │
            │             └── Level 4 — Capital Sub-Account (per movement type)
            │
            └── Each Capital Account can have transactions tagged
                to different Sub-Accounts for reporting

Explanation of Each Level

Level	Name	Description	Can I create multiple?
2	Balance Sheet Capital Accounts line	The line item that appears on the Balance Sheet under Equity. There is a built-in default called "Capital Accounts", and you can create custom ones via Control Accounts settings.	Yes — create custom control accounts for separate BS lines
3	Capital Account	An individual account for each owner, partner, or investor. Each account tracks one person's equity position.	Yes — one per owner or investor
4	Capital Sub-Account	A classification that groups transactions by type (e.g. Contributions, Drawings, Share of Profit). Used by the Capital Accounts Summary report to show movement breakdowns.	Yes — create as many as needed

4. Field-by-Field Guide for Creating a Capital Account

When you create a new Capital Account, the form presents the following fields:

#	Field	Required?	Description	Usage Notes
1	Name	Yes	The display name of the capital account (e.g. "John Smith Capital")	This name appears in all dropdown lists, reports, and the Balance Sheet drill-down. Choose a name that clearly identifies the owner or investor.
2	Code	No	An optional short code (e.g. "JSC-001")	If provided, the account is displayed as "Code - Name" in selection lists. Useful for sorting or linking to external references.
3	Division	No	Associates this capital account with a division or segment	If you use divisional accounting, assign the account to a division. Transactions will then be filtered by division in reports.
4	Control Account	No	The balance sheet line item this account rolls up to	Select a custom control account (created in Settings) to have this capital account appear on a separate line on the Balance Sheet. If left blank, it rolls up to the default "Capital Accounts" line.
5	Inactive	No	Marks the account as inactive	Inactive accounts are hidden from selection lists in transactions. Existing transactions that reference this account remain unchanged. The account still appears in reports with its balance.
6	Custom Fields	No	User-defined additional fields	If your business has set up custom fields for Capital Accounts, they will appear here.

5. Settings Configuration

5.1 Control Account for Capital Accounts

Location: Settings → Control Accounts → Capital Accounts

Control accounts determine how Capital Accounts appear on the Balance Sheet. Each control account becomes a separate line under the Equity section. If you want "Partner A Capital" and "Partner B Capital" as separate lines on the Balance Sheet, you would create two control accounts and assign each capital account to the appropriate one.

Fields when creating a Control Account:

Field	Required?	Description
Name	Yes	The name that appears on the Balance Sheet (e.g. "Partner Capital", "Investor Equity")
Code	No	Optional code for reference in the Chart of Accounts
Group	No	The Balance Sheet group this account belongs to. Should typically be set to Equity.
Position	No	Sort order within the Balance Sheet group. Lower numbers appear first.
Inactive	No	Hides this control account from selection lists

Cash Flow Statement: All Capital Account control accounts are automatically classified as Financing Activities on the Cash Flow Statement. This means owner contributions appear as financing inflows and drawings appear as financing outflows.

5.2 The Default Capital Accounts Line on the Balance Sheet

Location: Settings → Chart of Accounts → find "Capital Accounts" under Equity

Every business has a built-in default Capital Accounts line on the Balance Sheet. This is used automatically when:

No custom control accounts have been created
A Capital Account has no Control Account assigned

Fields:

Field	Description
Name	The display name. Defaults to "Capital Accounts" if left blank.
Code	Optional code for the Chart of Accounts.
Group	The Balance Sheet group assignment (Equity).
Position	Sort order within the Equity section.

Auto-Hide: The default "Capital Accounts" line is automatically hidden from the Chart of Accounts when no Capital Accounts have been created. It reappears automatically when at least one Capital Account exists.

5.3 Capital Sub-Accounts

Location: Settings → Capital Subaccounts

Capital Sub-Accounts let you classify movements within a Capital Account into categories. This enables the Capital Accounts Summary Report to show a breakdown by movement type.

Examples of common sub-accounts:

Contributions — capital injected by the owner
Drawings — capital withdrawn by the owner
Share of Profit — profit allocated to the owner
Share of Loss — loss allocated to the owner
Expense Claims — expenses paid personally by the owner (used automatically by the Expense Claims module)

Field:

Field	Required?	Description
Name	Yes	The display name of the sub-account (e.g. "Drawings", "Funds Contributed")

Built-in Sub-Account: The system includes a built-in sub-account called "Expense claims" that is automatically used by the Expense Claims module when an owner pays a business expense personally. You do not need to create this manually.

6. Creating a Capital Account — Step by Step

Go to the Capital Accounts tab
Click the New Capital Account button
Enter the Name (e.g. "John Smith Capital")
Enter an optional Code (e.g. "JS-001")
Optionally assign a Division for segmented reporting
Optionally select a Control Account. If left blank, the account will appear under the default "Capital Accounts" line on the Balance Sheet.
Check Inactive only if you want to hide this account from selection lists
Click Save

The new Capital Account will appear in the listing with a starting balance of 0.00. You can then set an opening balance or use it in transactions.

7. Setting an Opening Balance for a Capital Account

Location: Settings → Opening Balances → New Opening Balance Entry

Capital Accounts are Balance Sheet accounts, so opening balances use the double-entry method: one entry for the Capital Account and a balancing entry for Retained Earnings.

Fields for Capital Account Opening Balances

Field	What to Enter	Explanation
Account	Select the Capital Accounts control account (the default "Capital Accounts" or a custom one)	This determines which Balance Sheet line the opening balance appears on.
Capital Account	Select the specific capital account (e.g. "John Smith Capital")	This field only appears when the selected Account is a Capital Accounts type. It links the opening balance to the specific owner.
Financial Year Start	The date from which this opening balance applies	This date is used as the posting date in the General Ledger.
Debit or Credit	Credit for owner capital (positive balance). Debit for drawings (negative balance).	Capital accounts are Credit-normal. A Credit entry increases the capital balance. A Debit entry decreases it.
Amount	The amount in your base currency	Enter the opening balance in your business's base currency.
Currency / Amount in Currency / Exchange Rate	Optional foreign currency fields	Use these if the capital account was originally denominated in a foreign currency. The base amount is calculated as: Amount in Currency × Exchange Rate. The sign (Debit or Credit) is preserved in the calculation.
Description	Optional note	Visible in the opening balance view and transaction journal.
Entry Date	User-facing date	This date is for your reference only. It does not affect the General Ledger posting.
Division	Optional division	For segmented reporting.
Reference	Optional reference number	For audit trail purposes (e.g. "OB-2026-001").

What Happens When You Save an Opening Balance

The system creates two General Ledger entries to maintain double-entry accounting:

Entry 1 (Capital Account):
  Dr/Cr: As you specified
  Amount: The amount you entered (converted from foreign currency if applicable)
  Capital Account: The specific capital account you selected

Entry 2 (Retained Earnings — balancing entry):
  Dr/Cr: Opposite of Entry 1
  Amount: Same amount, opposite sign
  Capital Account: Not linked (this is the offset entry)

Example: Opening balance of 100,000 BDT Credit for "John Smith Capital":

Entry 1: Capital Accounts (John Smith Capital)    100,000.00 Cr
Entry 2: Retained Earnings                         100,000.00 Dr
                                                    ───────── ─────────
                                                    Dr = Cr ✓

Example with foreign currency: Opening balance of 1,000 USD Credit at exchange rate 110:

Entry 1: Capital Accounts (John Smith Capital)    1,000 USD Cr  (110,000 BDT Cr)
Entry 2: Retained Earnings                                        110,000 BDT Dr
                                                                    ───────── ─────────
                                                                    Dr = Cr ✓

Viewing the Transaction Journal

After saving an opening balance, you can view the journal entries by opening the opening balance record. The journal shows:

Foreign Currency                 Base Currency
Account                  Debit   Credit           Debit   Credit
─────────────────────────────────────────────────────────────
Capital Accounts                $1,000   × 110          110,000
  — John Smith Capital
Retained Earnings        $1,000           × 110  110,000
                         ─────── ───────          ─────── ───────
Total                    $1,000  $1,000           110,000 110,000

8. Using Capital Accounts in Daily Transactions

Once a Capital Account is created, it can be used in various transaction modules. When you select a Capital Account in a transaction, the Capital Account field links the financial movement to the specific owner's equity.

Typical Scenarios

Owner contributes cash to the business (Receipt):

Receipt:
  Amount:        100,000.00 BDT
  From:          John Smith
  Account:       Capital Accounts (or a custom control account)
  Capital Account: John Smith Capital
  Sub-Account:   Contributions

Accounting Effect:
  Dr Cash at Bank                      100,000.00
    Cr Capital Accounts — John Smith   100,000.00

Owner withdraws cash (Payment):

Payment:
  Amount:        50,000.00 BDT
  To:            John Smith
  Account:       Capital Accounts
  Capital Account: John Smith Capital
  Sub-Account:   Drawings

Accounting Effect:
  Dr Capital Accounts — John Smith     50,000.00
    Cr Cash at Bank                     50,000.00

Allocating profit to partners (Journal Entry):

Journal Entry:
  Line 1: Dr Retained Earnings          200,000.00
            Cr Capital Accounts — Partner A    120,000.00
            Cr Capital Accounts — Partner B     80,000.00
  Sub-Account on both lines: Share of Profit

Accounting Effect:
  Dr Retained Earnings                  200,000.00
    Cr Capital Accounts — Partner A     120,000.00
    Cr Capital Accounts — Partner B      80,000.00

Owner pays an expense personally (Expense Claim):

Expense Claim:
  Paid by:       John Smith Capital
  Amount:        10,000.00 BDT
  Expense:       Travel Expenses

Accounting Effect:
  Dr Travel Expenses                     10,000.00
    Cr Capital Accounts — John Smith     10,000.00
  Sub-Account: Expense Claims (assigned automatically)

9. How Capital Accounts Appear in Different Modules

Module	Where Capital Account Appears	Sub-Account Available?
Receipt	On the receipt line when the account is a Capital Accounts type	Yes
Payment	On the payment line when the account is a Capital Accounts type	Yes
Journal Entry	On each journal line when the account is a Capital Accounts type	Yes
Sales Invoice	On each invoice line when the account is a Capital Accounts type	Yes
Purchase Invoice	On each invoice line when the account is a Capital Accounts type	Yes
Credit Note	On the credit note line when the account is a Capital Accounts type	Yes
Debit Note	On the debit note line when the account is a Capital Accounts type	Yes
Expense Claim	In the "Paid By" field	Yes (uses built-in "Expense claims" sub-account)
Receipt Rule	On the rule definition	Yes
Payment Rule	On the rule definition	Yes

10. Reports

10.1 Capital Accounts Listing

Location: Capital Accounts tab

This is the main listing of all Capital Accounts. It shows the following columns (you can customize which columns appear via the Edit Columns button):

Column	Description
Code	The optional code you entered when creating the account.
Name	The name of the capital account (e.g. "John Smith Capital").
Control Account	Which Balance Sheet line this account rolls up to. Shows the custom control account name, or "Capital Accounts" (the default).
Division	The division assigned to this account, if any.
Balance	The net balance of the capital account in base currency. This is the sum of all transactions (opening balances, receipts, payments, journal entries, etc.) that reference this account. Click the balance to drill into the individual transactions.

How the balance is calculated: The balance is the total of all transaction amounts (in base currency) for every transaction that uses this Capital Account, including opening balance entries. A positive balance means Credit exceeds Debit (net capital contributed). A negative balance means Debit exceeds Credit (net drawings).

10.2 Capital Accounts Summary Report

Location: Reports → Capital Accounts → Capital Accounts Summary

This report shows the movement of each Capital Account over a specified period, broken down by sub-account categories.

Report Parameters

Parameter	Description
Title	A title for the report. Defaults to "Capital Accounts Summary".
Description	Optional description or notes.
From Date	The start of the reporting period.
To Date	The end of the reporting period.
Rounding	If enabled, displays whole numbers without decimals.
Reverse Signs	If enabled, all amounts are multiplied by −1. This can be used for presentation preferences where negative capital should show as positive and vice versa.
Exclude Zero Balances	If enabled, capital accounts with a zero closing balance are hidden.
Footer	Optional footer text for the report.

Report Columns

Column	What It Shows
Opening Balance	The balance at the start of the period. This includes all opening balance entries plus all transactions before the From Date.
[Sub-Account columns]	One column for each sub-account that has activity during the period. Shows the net movement for each sub-account category (e.g. Contributions, Drawings, Share of Profit). Each cell is clickable to drill into individual transactions.
Closing Balance	The balance at the end of the period. Calculated as: Opening Balance + Sum of all movements.

How the Report Calculates Each Column

Opening Balance = All transactions before From Date
                  + All opening balance entries (regardless of date)

Movements = All transactions between From Date and To Date
            (excluding opening balance entries),
            grouped by Sub-Account

Closing Balance = Opening Balance + Sum of all movements

10.3 Balance Sheet

Location: Reports → Balance Sheet

On the Balance Sheet, Capital Accounts appear under the Equity section. The amount shown is the total of all Capital Accounts that belong to that line item.

If all Capital Accounts use the default "Capital Accounts" line, there will be one line showing the total of all capital accounts
If you have created custom control accounts, each one appears as a separate line, showing the total for the Capital Accounts assigned to that control account

How the Balance Sheet line is calculated: The Balance Sheet sums all transaction amounts (in base currency) for every transaction where the Balance Sheet account matches the Capital Accounts control account, up to the report date.

10.4 Trial Balance

In the Trial Balance, each Capital Account control account appears as a single line under Equity. The balance shown is the net total of all transactions for that control account.

Individual Capital Accounts (e.g. "John Smith Capital") are sub-ledgers of their control account. They do not appear as separate lines in the Trial Balance. To see individual capital account balances, use the Capital Accounts listing or the Capital Accounts Summary report.

10.5 Cash Flow Statement

Capital Account transactions are always classified as Financing Activities on the Cash Flow Statement:

Owner contributions (Credit entries to Capital Account) → Cash Inflow from Financing Activities
Owner drawings (Debit entries to Capital Account) → Cash Outflow from Financing Activities

This ensures that equity transactions are correctly separated from operating and investing activities on the Cash Flow Statement.

11. How Balances Are Calculated

11.1 Choosing Between Default and Custom Control Accounts

When a transaction uses a Capital Account, the system determines which Balance Sheet line to post to using this logic:

If the Capital Account has a Control Account assigned, the transaction posts to that custom control account on the Balance Sheet
If the Capital Account has no Control Account, the transaction posts to the default "Capital Accounts" Balance Sheet line
If no Capital Account is selected when one is required, the transaction falls to Suspense (this should not happen in normal use)

11.2 Capital Account Listing Balance

The balance shown in the Capital Accounts listing is calculated as:

Balance = Sum of all Base Amounts for every transaction where:
    - The transaction uses a Capital Account control account
    - The transaction references this specific Capital Account

This includes opening balances, receipts, payments, journal entries, invoices, expense claims, and any other transaction type. The balance is always in the base currency.

11.3 Opening Balance and Its Contra Entry

When you enter an opening balance for a Capital Account, the system creates two entries to keep the books balanced:

Entry 1 (Capital Account):
    Amount = Your entered amount (positive for Debit, negative for Credit)
    Base Amount = Amount × Exchange Rate (sign preserved)
    Capital Account = The specific capital account

Entry 2 (Retained Earnings — always the opposite sign):
    Amount = Entry 1 Base Amount × −1
    Capital Account = Not linked

This ensures that total Debits = total Credits. For example, a Credit opening balance of 100,000 BDT for a capital account creates:

Capital Account    100,000.00 Cr  (−100,000 BaseAmount)
Retained Earnings  100,000.00 Dr  (+100,000 BaseAmount)
Sum: −100,000 + 100,000 = 0 ✓

11.4 Capital Account Field Visibility in Opening Balances

The Capital Account field in the Opening Balance form only appears when you select a Capital Accounts control account as the "Account". If you select a different account type (e.g. Cash, Accounts Receivable), the Capital Account field is hidden.

11.5 Filtering Capital Accounts by Control Account

When selecting a Capital Account in a transaction form, the dropdown shows only the accounts that belong to the selected control account. This prevents you from accidentally selecting a Capital Account that belongs to a different Balance Sheet line.

12. Sample Data and Report Output

Setup

Item	Details
Control Account	"Partner Capital" (custom control account)
Capital Account 1	"Partner A" (under "Partner Capital" control account)
Capital Account 2	"Partner B" (under "Partner Capital" control account)
Sub-Accounts	"Contributions", "Drawings", "Share of Profit"

Transactions During the Year

Date	Type	Capital Account	Sub-Account	Amount	Effect on Balance
01-Jan-2026	Opening Balance	Partner A	—	500,000 Credit	+500,000
01-Jan-2026	Opening Balance	Partner B	—	300,000 Credit	+300,000
15-Mar-2026	Receipt	Partner A	Contributions	100,000 Credit	+100,000
20-Jun-2026	Payment	Partner A	Drawings	50,000 Debit	−50,000
20-Jun-2026	Payment	Partner B	Drawings	30,000 Debit	−30,000
30-Jun-2026	Journal Entry	Partner A	Share of Profit	150,000 Credit	+150,000
30-Jun-2026	Journal Entry	Partner B	Share of Profit	100,000 Credit	+100,000

Capital Accounts Listing (as at 30-Jun-2026)

Name	Control Account	Balance
Partner A	Partner Capital	700,000.00
Partner B	Partner Capital	370,000.00
Total		1,070,000.00

Calculation:

Partner A:  500,000 (OB) + 100,000 (Contribution) − 50,000 (Drawing) + 150,000 (Profit) = 700,000
Partner B:  300,000 (OB) − 30,000 (Drawing) + 100,000 (Profit)                           = 370,000

Capital Accounts Summary Report (Q2 2026 — 01-Apr to 30-Jun)

Account	Opening Balance	Contributions	Drawings	Share of Profit	Closing Balance
Partner A	600,000.00	—	(50,000.00)	150,000.00	700,000.00
Partner B	300,000.00	—	(30,000.00)	100,000.00	370,000.00
Total	900,000.00	—	(80,000.00)	250,000.00	1,070,000.00

Opening Balance Calculation for Q2:

Partner A: Opening Balance includes:
  - Opening Balance entry (500,000)     ← IsOpeningBalanceEntry flag
  - March Contribution (100,000)        ← Date before From Date
  Total: 600,000.00 ✓

Partner B: Opening Balance includes:
  - Opening Balance entry (300,000)     ← IsOpeningBalanceEntry flag
  Total: 300,000.00 ✓

Balance Sheet (Equity Section) — 30-Jun-2026

Equity	30-Jun-2026
Partner Capital (Control Account)	1,070,000.00
Retained Earnings	(varies based on other entries)
Total Equity	(sum of all equity lines)

Balance Sheet Calculation:

Partner Capital BS line = 700,000 (Partner A) + 370,000 (Partner B) = 1,070,000.00

If Partner A and Partner B had separate custom control accounts, the Balance Sheet would show:

Equity	30-Jun-2026
Partner A Capital (Custom Control Account)	700,000.00
Partner B Capital (Custom Control Account)	370,000.00
Retained Earnings	(varies)
Total Equity	(sum)

13. Common Issues and Solutions

13.1 The Capital Account field does not appear in a transaction

Cause: The Capital Accounts tab is disabled in Customize Menu, or the account selected on the transaction line is not a Capital Accounts type.

Solution: Check that the Capital Accounts tab is enabled in Customize Menu. On the transaction line, ensure you have selected a Capital Accounts control account (the default "Capital Accounts" or a custom one) as the account.

13.2 The Capital Accounts tab or menu does not appear

Cause: The Capital Accounts feature is disabled in Customize Menu.

Solution: Go to Customize Menu and enable the Capital Accounts toggle.

13.3 No options appear in the Capital Account dropdown

Cause: No Capital Accounts have been created yet, or all existing accounts are marked as Inactive.

Solution: Create at least one Capital Account via the Capital Accounts tab. Make sure it is not marked as Inactive.

13.4 The "Capital Accounts" line does not appear on the Balance Sheet

Cause: No Capital Accounts exist in the system, or the Capital Accounts tab is disabled.

Solution: Create at least one Capital Account. The Balance Sheet line will appear automatically.

13.5 The Capital Accounts Summary report shows no data

Cause: No transactions exist for the selected period, or no Capital Accounts have been created.

Solution: Verify that you have created Capital Accounts and that transactions (including opening balances) have been posted.

13.6 Balance differs between Capital Accounts listing and Summary report

If the total in the Capital Accounts listing does not match the Closing Balance total in the Summary report, possible causes include:

The listing shows all-time balances, while the Summary report is limited to the selected period
The listing uses base currency amounts, while the Summary report uses the account's currency for each transaction
The Summary report may have Reverse Signs enabled

13.7 A transaction has fallen into the Suspense account

If a Capital Account transaction shows under the Suspense account instead of Capital Accounts, it means the Capital Account was not selected in the transaction when it should have been.

Solution: Edit the transaction and ensure the Capital Account field is filled in. The system requires a Capital Account whenever the account type is a Capital Accounts control account.

14. Accounting Regulation Compliance

14.1 IAS 1 — Presentation of Financial Statements

Requirement (§54r): Financial statements must show contributions by and distributions to owners separately.

How this system complies: The Capital Accounts Summary report provides a complete statement of movements by owner, including opening balance, contributions, drawings, profit allocations, and closing balance — all broken down by sub-account category. This meets the disclosure requirements for changes in equity.

14.2 IAS 32 — Financial Instruments: Presentation

Requirement (§15-18): Equity instruments are those that do not create a contractual obligation to deliver cash.

How this system complies: Capital Accounts are classified as Equity (not Liabilities) on the Balance Sheet. They appear under the Equity section alongside Retained Earnings, correctly reflecting their nature as ownership interests rather than obligations.

14.3 IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors

Requirement (§14): When accounting policies are changed retrospectively, the opening balance of each affected equity component must be adjusted.

How this system complies: Opening balance entries for Capital Accounts create a proper double-entry with Retained Earnings as the offset. Each opening balance is flagged so it can be clearly distinguished from current-period transactions in reports. This preserves a clean audit trail for retrospective adjustments.

14.4 IFRS for SMEs — Section 22: Equity

Requirement: Movements in each class of equity must be disclosed.

How this system complies: The Capital Accounts Summary report provides a full movement schedule classified by sub-account. Each movement cell is clickable to drill into the underlying individual transactions, providing complete auditability.

14.5 DR = CR Verification

Every opening balance entry for a Capital Account is verified to maintain double-entry balance:

Example 1: Credit 100,000 BDT (Capital contribution)
  Capital Account:  100,000.00 Cr   (BaseAmount = −100,000)
  Retained Earnings: 100,000.00 Dr  (BaseAmount = +100,000)
  Sum: −100,000 + 100,000 = 0 ✓

Example 2: Credit 10 USD @ 110 (Foreign currency contribution)
  Capital Account:  10.00 USD Cr    (BaseAmount = −1,100.00 BDT)
  Retained Earnings: 1,100.00 BDT Dr (BaseAmount = +1,100.00 BDT)
  Sum: −1,100 + 1,100 = 0 ✓

14.6 Relevant but Not Applicable

NBR VAT Act 2012: Capital Account transactions are equity movements, not supplies of goods or services. They are not subject to VAT, and the system correctly does not apply tax codes to Capital Account lines.
IFRS 15 (Revenue): Owner contributions and drawings are not revenue transactions. They are equity transactions classified as Financing Activities.

End of Capital Accounts Guide