Eloquent IFRS

This Package enables any Laravel application to generate International Financial Reporting Standards compatible Financial Statements by providing a fully featured and configurable Double Entry accounting subsystem.

The package supports multiple Entities (Companies), Account Categorization, Transaction assignment, Start of Year Opening Balances and accounting for VAT Transactions. Transactions are also protected against tampering via direct database changes ensuring the integrity of the Ledger. Outstanding amounts for clients and suppliers can also be displayed according to how long they have been outstanding using configurable time periods (Current, 31 - 60 days, 61 - 90 days etc). Finally, the package supports the automated posting of forex difference transactions both within the reporting period as well as translating foreign denominated account balances at a set closing rate.

The motivation for this package can be found in detail on my blog post here

Eloquent IFRS

Installation

Use composer to Install the package into your laravel or lumen application. Eloquent IFRS requires PHP version 7.3 and Eloquent version 7 and above.

For production

composer require "ekmungai/eloquent-ifrs"
composer install --no-dev

If using Lumen, make sure to register the package with your application by adding the IFRSServiceProvider to the app.php in the bootstrap folder.

<?php

use IFRS\IFRSServiceProvider;

require_once __DIR__.'/../vendor/autoload.php';
...

/*
|--------------------------------------------------------------------------
| Register Service Providers
|--------------------------------------------------------------------------
|
| Here we will register all of the application's service providers which
| are used to bind services into the container. Service providers are
| totally optional, so you are not required to uncomment this line.
|
*/

// $app->register(App\Providers\AppServiceProvider::class);
// $app->register(App\Providers\AuthServiceProvider::class);
// $app->register(App\Providers\EventServiceProvider::class);
$app->register(IFRSServiceProvider::class);
  ...
}
...
?>

Then run migrations to create the database tables.

php artisan migrate

For development

Clone this repo, and then run Composer in local repo root to pull in dependencies.

git clone git@github.com/ekmungai/eloquent-ifrs eloquent-ifrs
cd eloquent-ifrs
composer update

To run the tests:

cd eloquent-ifrs
vendor/bin/phpunit

Configuration

The package installs with the default settings as regards the names of Accounts/Transactions Types, Report Titles and Section names as well as Accounts Codes. To adjust these settings use the Laravel artisan publish command to install the ifrs configuration to your application's config folder where you can edit it.

php artisan vendor:publish

Usage

Full documentation for this package can be found here.

DB Collision

Publish configuration file with vendor:publish if your User model is different from App\User and update the namespace of your User model.

Open your User model and implement the below interfaces and also include the trait as well.

<?php

use IFRS\Traits\IFRSUser;
use IFRS\Traits\Recycling;

use IFRS\Interfaces\Recyclable;
...

class User ... implements Recyclable {
  ...
  use IFRSUser;
  use Recycling;
  ...
}
...
?>

Examples

This simple example covers the four scenarios to demonstrate the use of the package. First, a description of a Cash Sale to a customer, then a Credit Sale (Invoice) to a client, then a Cash Purchase for an operations expense and finally a Credit Purchase (Bill) from a Supplier for a non operations purpose (Asset Purchase).

First we'll setup the Company (Reporting Entity) and required Accounts to record the Transactions. (Assuming that a registered User already exists):

use IFRS\Models\Entity;
use IFRS\Models\Currency;

$entity = Entity::create([
    "name" => "Example Company",
]);

//Entities require a reporting currency
$currency = Currency::create([
    "name" => "Euro",
    "currency_code" => "EUR"
]);

// Set the currency as the Entity's Reporting Currency 
$entity->currency_id = $currency->id;
$entity->save();

We also need the VAT Rates that apply to the Entity:

use IFRS\Models\Vat;

$outputVat = Vat::create([
    'name' => "Standard Output Vat",
    'code' => "O",
    'rate' => 20,
]);

$inputVat = Vat::create([
    'name' => "Standard Input Vat",
    'code' => "I",
    'rate' => 10,
]);

$zeroVat = Vat::create([
    'name' => "Zero Vat",
    'code' => "Z",
    'rate' => 0,
]);

Now we'll set up some Accounts:

use IFRS\Models\Account;

$bankAccount = Account::create([
    'name' => "Bank Account",
    'account_type' => Account::BANK,
]);

$revenueAccount = Account::create([
    'name' => "Sales Account",
    'account_type' => Account::OPERATING_REVENUE,
]);

$clientAccount = Account::create([
    'name' => "Example Client Account",
    'account_type' => Account::RECEIVABLE,
]);

$supplierAccount = Account::create([
    'name' => "Example Supplier Account",
    'account_type' => Account::PAYABLE,
]);

$opexAccount = Account::create([
    'name' => "Operations Expense Account",
    'account_type' => Account::OPERATING_EXPENSE,
]);

$assetAccount = Account::create([
    'name' => "Office Equipment Account",
    'account_type' => Account::NON_CURRENT_ASSET,
]);

$salesVatAccount = Account::create([
    'name' => "Sales VAT Account",
    'account_type' => Account::CONTROL_ACCOUNT,
]);

$purchasesVatAccount = Account::create([
    'name' => "Input VAT Account",
    'account_type' => Account::CONTROL_ACCOUNT,
]);

Now that all Accounts are prepared, we can create the first Transaction, a Cash Sale:

use IFRS\Transactions\CashSale;

$cashSale = CashSale::create([
    'account_id' => $bankAccount->id,
    'date' => Carbon::now(),
    'narration' => "Example Cash Sale",
]); // Intermediate save does not record the transaction in the Ledger

So far the Transaction has only one side of the double entry, so we create a Line Item for the other side:

use IFRS\models\LineItem;

$cashSaleLineItem = LineItem::create([
    'vat_id' => $outputVat->id,
    'account_id' => $revenueAccount->id,
    'vat_account_id' => $salesVatAccount->id,
    'narration' => "Example Cash Sale Line Item",
    'quantity' => 1,
    'amount' => 100,
]);

$cashSale->addLineItem($cashSaleLineItem);
$cashSale->post(); // This posts the Transaction to the Ledger

The rest of the transactions:

use IFRS\Transactions\ClientInvoice;

$clientInvoice = ClientInvoice::create([
    'account_id' => $clientAccount->id,
    'date' => Carbon::now(),
    'narration' => "Example Credit Sale",
]);

$clientInvoiceLineItem = LineItem::create([
    'vat_id' => $outputVat->id,
    'account_id' => $revenueAccount->id,
    'vat_account_id' => $salesVatAccount->id,
    'narration' => "Example Credit Sale Line Item",
    'quantity' => 2,
    'amount' => 50,
]);

$clientInvoice->addLineItem($clientInvoiceLineItem);

//Transaction save may be skipped as post() saves the Transaction automatically
$clientInvoice->post();

use IFRS\Transactions\CashPurchase;

$cashPurchase = CashPurchase::create([
    'account_id' => $clientAccount->id,
    'date' => Carbon::now(),
    'narration' => "Example Cash Purchase",
]);

$cashPurchaseLineItem = LineItem::create([
    'vat_id' => $inputVat->id,
    'account_id' => $opexAccount->id,
    'vat_account_id' => $purchaseVatAccount->id,
    'narration' => "Example Cash Purchase Line Item",
    'quantity' => 4,
    'amount' => 25,
]);

$cashPurchase->addLineItem($cashPurchaseLineItem)->post();

use IFRS\Transactions\SupplierBill;

$supplierBill = SupplierBill::create([
    'account_id' => $supplierAccount->id,
    'date' => Carbon::now(),
    'narration' => "Example Credit Purchase",
]);

$supplierBillLineItem = LineItem::create([
    'vat_id' => $inputVat->id,
    'account_id' => $assetAccount->id,
    'vat_account_id' => $purchaseVatAccount->id,
    'narration' => "Example Credit Purchase Line Item",
    'quantity' => 4,
    'amount' => 25,
]);

$supplierBill->addLineItem($supplierBillLineItem)->post();

use IFRS\Transactions\ClientReceipt;

$clientReceipt = ClientReceipt::create([
    'account_id' => $clientAccount->id,
    'date' => Carbon::now(),
    'narration' => "Example Client Payment",
]);

$clientReceiptLineItem = LineItem::create([
    'vat_id' => $zeroVat->id,
    'account_id' => $bankAccount->id,
    'vat_account_id' => $purchaseVatAccount->id,
    'narration' => "Part payment for Client Invoice",
    'quantity' => 1,
    'amount' => 50,
]);

$clientReceipt->addLineItem($clientReceiptLineItem)->post();

We can assign the receipt to partially clear the Invoice above:

use IFRS\Models\Assignment;

echo $clientInvoice->clearedAmount(); //0: Currently the Invoice has not been cleared at all
echo $clientReceipt->balance(); //50: The Receipt has not been assigned to clear any transaction

$assignment = Assignment::create([
    'transaction_id' => $clientReceipt->id,
    'cleared_id' => $clientInvoice->id,
    'cleared_type'=> $clientInvoice->getClearedType(),
    'amount' => 50,
]);

echo $clientInvoice->clearedAmount(); //50
echo $clientReceipt->balance(); //0: The Receipt has been assigned fully to the Invoice

We have now some Transactions in the Ledger, so lets generate some reports. First though, Reports require a reporting period:

use IFRS\Models\ReportingPeriod;

$period = ReportingPeriod::create([
    'period_count' => 1,
    'year' => 2021,
]);

The Income Statement (Profit and Loss):

use IFRS\Reports\IncomeStatement;

$incomeStatement = new IncomeStatement(
    "2021-01-01",   // Report start date
    "2021-12-31",   // Report end date
)->getSections();// Fetch balances from the ledger and store them internally

/**
* this function is only for demonstration and
* debugging use and should never be called in production
*/
dd($incomeStatement->toString());

Example Company
Income Statement
For the Period: Jan 01 2021 to Dec 31 2021

Operating Revenues
    Operating Revenue        200 (100 cash sales + 100 credit sales)

Operating Expenses
    Operating Expense        100 (cash purchase)
                        ---------------
Operations Gross Profit      100

Non Operating Revenues
    Non Operating Revenue    0
                        ---------------
Total Revenue                100

Non Operating Expenses
    Direct Expense           0
    Overhead Expense         0
    Other Expense            0
                        ---------------
Total Expenses               0
                        ---------------
Net Profit                   100
                        ===============

The Balance Sheet:

use IFRS\Reports\BalanceSheet;

$balanceSheet = new BalanceSheet(
    "2021-12-31"  // Report end date
)->getSections();

/**
* again to emphasize, this function is only for demonstration and
* debugging use and should never be called in production
*/
dd($balanceSheet->toString());

Example Company
Balance Sheet
As at: Dec 31 2021

Assets
    Non Current Asset        120 (asset purchase)
    Receivables              70  (100 credit sale + 20 VAT - 50 client receipt)
    Bank                     50  (120 cash sale - 120 cash purchase + 50 client receipt)
                        ---------------
Total Assets                 240

Liabilities
    Control Account          20  (VAT: 20 cash sale + 20 credit sale - 10 cash purchase - 10 credit purchase)
    Payable                  120 (100 credit purchase + 20 VAT)
                        ---------------
Total Liabilities            140

                        ---------------
Net Assets                   100
                        ===============

Equity
    Income Statement         100
                        ---------------
Total Equity                 100
                        ===============

While the Income Statement and Balance Sheet are the ultimate goal for end year (IFRS) reporting, the package also provides intermediate period reports including Account Statement, which shows a chronological listing of all Transactions posted to an account ending with the current balance for the account; and Account Schedule, which is similar to an Account Statement with the difference that rather than list all Transactions that constitute the ending balance the report only shows the outstanding (Uncleared) Transactions.

In the above example:

use IFRS\Reports\AccountStatement;
use IFRS\Reports\AccountSchedule;

$transactions = new AccountStatement($clientAccount)->getTransactions();

dd($transactions);

array:2[
  ["transaction" => ClientInvoice, "debit" => 120, "credit" => 0, "balance" => 120],
  ["transaction" => ClientReceipt, "debit" => 0, "credit" => 50, "balance" => 70]
]

$transactions = new AccountSchedule($clientAccount, $currency)->getTransactions();

dd($transactions);

array:1[
  ["transaction" => ClientInvoice, "amount" => 120, "cleared" => 50, "balance" => 70],
]

Changelog

Please see CHANGELOG for more information about recent changes.

Getting Involved

I am acutely aware that as a professionally trained Accountant I may have used some conventions, definitions and styles that while seemingly obvious to me, might not be so clear to another developer. I would therefore welcome and greatly appreciate any feedback on the ease of use of the package so I can make it more useful to as many people as possible.

Contributing

Fork it
Create your feature branch (git checkout -b feature/fooBar)
Write tests for the feature
Commit your changes (git commit -am 'Add some fooBar')
Push to the branch (git push origin feature/fooBar)
Create a new Pull Request

Roadmap

Add Cashflow Statement
Laravel 8 Compatibility
Add Multicurrency support

License

This software is distributed for free under the MIT License

References

This package is heavily influenced by chippyash/simple-accounts-3 and scottlaurent/accounting.
Special thanks to paschaldev for his brilliant work in preventing collisions with already existing db tables.

elvendor / eloquent-ifrs