Special Accounts — Complete User Guide — Two Accounts Web

Comprehensive guide for managing special accounts — balance sheet accounts with foreign currency support, custom control accounts, and flexible cash flow classification

Table of Contents

1. What Are Special Accounts?
2. Enabling the Tab via Customize Menu
3. System Accounts
   • Control Account for Special Accounts
   • Default Special Accounts Account
   • Cash Flow Statement Classification
4. Field-by-Field Guide
   • Special Account Fields
   • Control Account Fields
5. Creating a Special Account
6. Using Special Accounts on Transactions
   • Transaction Types
   • Foreign Currency Handling
7. Opening Balances
8. Accounting Impact
   • GL Posting
   • Sign Convention
   • Cash Flow Classification
9. Reports
   • Special Accounts Listing
   • Balance Sheet
   • Cash Flow Statement
10. Sample Data and Report Output
11. Accounting Regulation Compliance

1. What Are Special Accounts?

Special Accounts are user-defined balance sheet sub-accounts that provide flexible tracking for a wide range of financial items that do not fit into the standard chart of accounts categories. They support foreign currency, can be grouped under custom control accounts, and allow per-account cash flow classification.

Special Accounts can be used for:

• Security deposits — refundable deposits paid or received
• Escrow accounts — funds held for specific purposes
• Petty cash funds — small cash floats managed separately
• Advances to employees or suppliers — prepayments that need individual tracking
• Non-trade receivables or payables — items that are not standard AR/AP
• Special purpose funds — restricted cash or reserves
• Custom balance sheet line items — any item you want to track separately on the Balance Sheet

2. Enabling the Tab via Customize Menu

Special Accounts is a standalone tab that does NOT depend on other tabs. To enable:

1. Open Customize Menu
2. Find "Special Accounts" in the list
3. Toggle to Visible
4. Click Save

Once enabled, you will see:

• Special Accounts — the main listing of all special accounts with balances
• Control Account for Special Accounts (under Settings > Control Accounts) — manage custom control accounts for grouping special accounts on the Balance Sheet

3. System Accounts

3.1 Control Account for Special Accounts

Control accounts group multiple Special Accounts under a single line on the Balance Sheet. For example, "Security Deposits" could be a control account that groups all individual deposit records.

3.2 Default Special Accounts Account

When no custom Control Account is assigned to a Special Account, the system uses the Default Special Accounts Account — a singleton account that is automatically created. Its default name is "Special Accounts". It supports the same Cash Flow Statement classification fields as a custom control account.

Navigate to Settings > Chart of Accounts to:

• Rename the default "Special Accounts" line item
• Assign it to a Balance Sheet group
• Set its Cash Flow Statement category and activity group

3.3 Cash Flow Statement Classification

Both custom Control Accounts and the default Special Accounts account support user-selectable cash flow classification. This is a key feature — it allows Special Accounts to appear under Operating, Investing, or Financing activities in the Cash Flow Statement depending on the nature of the account. For example:

• Security deposits paid — typically classified as Operating (part of working capital)
• Property deposits — classified as Investing (linked to asset acquisition)
• Funds held for debt repayment — classified as Financing

4. Field-by-Field Guide

4.1 Special Account Fields

4.2 Control Account Fields

5. Creating a Special Account

1. Go to Special Accounts > New Special Account
2. Enter the Name (required)
3. Optionally enter a Code
4. Select a Currency if this account should track amounts in a foreign currency
5. Select a Tax Code if applicable
6. Assign to a Division if needed
7. Select a Control Account to group this Special Account under a specific Balance Sheet line
8. Add Custom Fields as needed
9. Save

Creating a Control Account

1. Go to Settings > Control Accounts > Special Accounts > New Control Account
2. Enter the Name
3. Select the Group (Balance Sheet section)
4. Choose the Cash Flow Statement category
5. Optionally select an Activity Group for drill-down grouping
6. Save

6. Using Special Accounts on Transactions

6.1 Transaction Types

Special Account fields appear on transaction lines when the selected GL Account is a Special Accounts control account. The following transaction types support Special Account selection:

• Receipt — record incoming funds to a Special Account
• Payment — record outgoing funds from a Special Account
• Journal Entry — adjust balances or transfer between Special Accounts
• Sales Invoice — charge a customer and link to a Special Account
• Purchase Invoice — record a payable linked to a Special Account
• Credit Note / Debit Note — adjust Special Account balances

On each transaction line, select a Control Account for Special Accounts as the Account, and the Special Account field appears for selecting the specific sub-account.

6.2 Foreign Currency Handling

Special Accounts have full foreign currency support. When a Special Account has a Currency set:

• The Account Currency on GL transactions is set to the Special Account's Currency
• Amounts are tracked in both the account's currency (Account Amount) and the base currency (Base Amount)
• The system revalues foreign currency Special Account balances at period-end as part of the automated FX revaluation process
• Exchange gains or losses are recognized in the Currency Gains/Losses P&L account

Example — Special Account in USD:
    Special Account: "Security Deposit — US Office" (Currency = USD)
    
    Transaction: Payment of $10,000 @ rate 110
        Account Amount: 10,000.00 USD (in Special Account's currency)
        Base Amount:    11,00,000.00 BDT (converted at exchange rate)
    
    At period-end revaluation (closing rate = 115):
        Unrealized FX gain: 10,000 × (115 − 110) = 50,000.00 BDT
        Dr  Special Account              50,000.00 BDT
            Cr  Currency Gains/Losses                 50,000.00 BDT

7. Opening Balances

To set an opening balance for a Special Account:

1. Go to Settings > Opening Balances > Add
2. Select a Control Account for Special Accounts as the Account (or the default Special Accounts account)
3. The Special Account field appears — select the specific Special Account
4. Set the Amount and Debit/Credit direction
5. If the Special Account has a foreign currency, the Currency field is auto-populated from the Special Account record. Enter the Amount in Currency and Exchange Rate.
6. Save

GL Posting Logic

When the opening balance entry is saved:

1. The system resolves the Special Account's Control Account (custom or default)
2. A GL transaction is created with:
   • GL account = the resolved control account
   • Transaction amount = the OB amount in the Special Account's currency
   • Base amount = the converted base currency amount
3. A second GL transaction is created as a contra to Retained Earnings (for Balance Sheet accounts)
4. Both entries have the opening balance flag for clear audit trail

8. Accounting Impact

8.1 GL Posting

When a transaction line uses a Special Account control account, the system creates standard GL entries with the Special Account reference:

For a Receipt crediting a Special Account:
    Dr  Cash at Bank (Bank Account)               Amount
        Cr  Special Account Control Account                  Amount
    Special Account reference: [Selected Special Account]
    Account Currency: Special Account's Currency (if set)

For a Payment debiting a Special Account:
    Dr  Special Account Control Account            Amount
        Cr  Cash at Bank (Bank Account)                       Amount
    Special Account reference: [Selected Special Account]

For a Journal Entry adjusting a Special Account:
    Dr  Special Account Control Account            Amount
        Cr  Retained Earnings / Other Account                 Amount
    Special Account reference: [Selected Special Account]

8.2 Sign Convention

The Special Accounts listing and drill-down view automatically determine the correct sign based on the account's Balance Sheet group:

• Asset group — debit-normal. Positive balance = debit balance. Displayed as entered.
• Liability or Equity group — credit-normal. Positive balance = credit balance. The system reverses the sign (multiplies by −1) so the displayed balance is positive for credit balances.

This sign convention ensures that the Special Accounts listing always shows meaningful positive balances regardless of the account type.

8.3 Cash Flow Classification

The Cash Flow Statement category set on the control account determines how Special Account transactions appear in the Cash Flow Statement:

9. Reports

9.1 Special Accounts Listing

The main Special Accounts page shows all accounts with the following columns:

• Code — optional short code
• Name — account name
• Control Account — the control account or default "Special Accounts" singleton
• Division — assigned division
• Balance — the current balance, clickable to drill into the transaction history

The Balance column automatically determines the sign convention (asset = debit-normal, liability/equity = credit-normal) and displays the balance in the account's currency (if set) or the base currency. Clicking the Balance opens the Special Account Transactions viewer showing all GL transactions for that account.

9.2 Balance Sheet

Special Accounts appear on the Balance Sheet under the group assigned to their control account. Each control account appears as a separate line item with the total of all Special Accounts under it. If no custom control account is used, all Special Accounts appear under the default "Special Accounts" line.

9.3 Cash Flow Statement

Transactions involving Special Accounts appear in the Cash Flow Statement according to the CFS category set on the control account. The activity group can further sub-categorize transactions within each section.

10. Sample Data and Report Output

Setup

Transactions

GL Transactions Created

Opening Balance — Office Building Deposit:
    Dr  Security Deposits (Control Account)              50,000.00
        Cr  Retained Earnings                                        50,000.00
    Special Account: Office Building Deposit (DEP-001)
    Currency: BDT (base)
    Classification: Debit (asset — deposit paid)

Opening Balance — US Client Advance (USD @ 110):
    Dr  Security Deposits (Control Account)    $5,000.00 / 5,50,000.00 BDT
        Cr  Retained Earnings                            $5,000.00 / 5,50,000.00 BDT
    Special Account: US Client Advance (ADV-001)
    Currency: USD
    Account Amount: $5,000.00, Base Amount: 5,50,000.00 BDT

Payment — Additional Deposit (15-Mar):
    Dr  Security Deposits (Control Account)              25,000.00
        Cr  Cash at Bank                                             25,000.00
    Special Account: Office Building Deposit
    Currency: BDT

Journal Entry — Advance Utilized (20-May):
    Cr  Security Deposits (Control Account)   $1,000.00 / 1,12,000.00 BDT
        Dr  Revenue / Client Account                     $1,000.00 / 1,12,000.00 BDT
    Special Account: US Client Advance
    Currency: USD @ 112

Special Accounts Listing

Calculation Verification:

Office Building Deposit (BDT, Asset — debit normal):
    50,000.00 (OB) + 25,000.00 (Payment) = 75,000.00 Dr ✓

US Client Advance (USD, Asset — debit normal):
    $5,000.00 (OB) − $1,000.00 (JE) = $4,000.00 Dr ✓
    Base: 5,50,000.00 − 1,12,000.00 = 4,38,000.00 BDT ✓

DR = CR Verification

OB — Office Building Deposit:
    Dr  Security Deposits             50,000.00
        Cr  Retained Earnings                     50,000.00
    DR = CR: 50,000.00 − 50,000.00 = 0.00 ✓

OB — US Client Advance ($5,000 @ 110):
    Dr  Security Deposits          $5,000 / 5,50,000 BDT
        Cr  Retained Earnings                 $5,000 / 5,50,000 BDT
    DR = CR: $5,000 − $5,000 = 0.00 USD ✓
    DR = CR: 5,50,000 − 5,50,000 = 0.00 BDT ✓

Payment — Additional Deposit:
    Dr  Security Deposits             25,000.00
        Cr  Cash at Bank                          25,000.00
    DR = CR: 25,000.00 − 25,000.00 = 0.00 ✓

JE — Advance Utilized:
    Cr  Security Deposits          $1,000 / 1,12,000 BDT
        Dr  Revenue/Client Account          $1,000 / 1,12,000 BDT
    DR = CR: $1,000 − $1,000 = 0.00 USD ✓
    DR = CR: 1,12,000 − 1,12,000 = 0.00 BDT ✓

11. Accounting Regulation Compliance

11.1 IAS 1 — Presentation of Financial Statements

Requirement (§54): Each material class of similar items must be presented separately. Current and non-current assets, and current and non-current liabilities, must be classified separately.

How this system complies: Special Accounts can be grouped under custom Control Accounts, each assigned to a specific Balance Sheet group (Assets, Liabilities, or Equity). This allows separate presentation of different types of special items on the Balance Sheet. The Group field determines the Balance Sheet section, enabling proper current/non-current classification.

11.2 IAS 21 — The Effects of Changes in Foreign Exchange Rates

Requirement (§23): Foreign currency monetary items are translated at the closing rate at each reporting date. Exchange differences are recognized in profit or loss.

How this system complies: Each Special Account can have its own Currency setting. The system tracks amounts in both the account's currency (Account Amount) and the base currency (Base Amount). The automated FX revaluation process includes Special Accounts, recalculating their base currency value at period-end closing rates and recognizing gains/losses in the Currency Gains/Losses account.

11.3 IAS 7 — Statement of Cash Flows

Requirement (§10-16): Cash flows are classified into operating, investing, and financing activities. The classification depends on the nature of the transaction.

How this system complies: Each Control Account for Special Accounts has a user-selectable Cash Flow Statement category. This allows proper classification of Special Account transactions based on their economic substance — deposits related to operations go to Operating, asset-related deposits go to Investing, and financing-related items go to Financing.

11.4 IFRS 7 — Financial Instruments: Disclosures

Requirement (§7-8): The carrying amounts of each category of financial instrument must be disclosed, including those measured at amortized cost.

How this system complies: The Special Accounts listing provides a clear view of the carrying amount of each account, categorized by control account. Custom fields can capture additional disclosure information such as counterparty names, maturity dates, or collateral details.

11.5 DR = CR Verification

All entries involving Special Accounts follow standard double-entry bookkeeping.
The Special Account reference on the transaction line is a sub-ledger tracking
dimension — it does NOT affect the double-entry balance.

OB — Office Building Deposit:   Dr 50,000 / Cr 50,000 = 0.00 ✓
OB — US Client Advance:         Dr $5,000 / Cr $5,000 = 0.00 ✓
Payment — Additional Deposit:   Dr 25,000 / Cr 25,000 = 0.00 ✓
JE — Advance Utilized:          Cr $1,000 / Dr $1,000 = 0.00 ✓

11.6 Relevant but Not Applicable

• IFRS 15 (Revenue): Special Accounts are balance sheet items, not revenue accounts. Revenue is recognized through Sales Invoices, not through Special Accounts.
• IFRS 16 (Leases): Security deposits for leased assets can be tracked as Special Accounts, but the lease liability itself is accounted for under IFRS 16 separately.
• IAS 2 (Inventories): Special Accounts are not inventory accounts — they track deposits, advances, and other balance sheet items.

End of Special Accounts Guide