Basic GAAP chart of accounts

Release notes

This chart of accounts includes general US GAAP compatible classifications and sub-classifications.

The FASB does not publish a "US GAAP chart of accounts".

Companies may use any chart of accounts provided it is consistent with published recognition guidance (link: asc.fasb.org).

This chart has been designed to be consistent with this guidance.

While users may delete unnecessary / add additional sub-accounts, they are advised to keep its general structure intact.

Prior to use, users are advised to add additional, specific accounts.

For example, a company with petty cash and two bank accounts, would add:

Assets 1
Cash And Investments 1.1
Cash And Cash Equivalents 1.1.1
Petty Cash 1.1.1.1
Cash in bank 1.1.1.2
Cash in bank, account one 1.1.1.2.1
Cash in bank, account two 1.1.1.2.2
--- ---

A company with customers (i.e. customer # 123, customer # 234, customer number # 345), would add:

Assets 1
--- ---
Receivables 1.2
Accounts, Notes And Loans
1.2.1
Accounts receivable 1.2.1.1
Customer 123 1.2.1.1.123
Customer 234 1.2.1.1.234
Customer 345 1.2.1.1.345
--- ---

In addition to permanent accounts, temporary accounts for individual receivables (i.e invoice # 00321, invoice # 00332, invoice # 00358), may also be added:

Assets 1
--- ---
Receivables 1.2
Accounts, Notes And Loans
1.2.1
Accounts receivable 1.2.1.1
Customer 123 1.2.1.1.123
Invoice 00321 1.2.1.1.123-00321
Invoice 00321 1.2.1.1.123-00332
Invoice 00321 1.2.1.1.123-00358
--- ---

This chart does not make a current/non-current distinction.

As the current / non-current status of an item is a disclosure rather than recognition issue, incorporating the current / non-current distinction into the account structure not only adds unnecessary complexity, but can lead to unnecessary item reclassification.

For example, a company can acquire an available-for-sale financial instrument with the intention of holding it for less than 12 months then, during the holding period, change its intention.

Nevertheless, as some companies prefer a chart of accounts that makes this distinction, a current / non-current chart of accounts is available to subscribers.

Important: this chart includes expenses classified by both nature and function.

US GAAP does not permit nature of expense, income statment reporting.

Nevertheless, a nature based account structure yields superior operational results.

For example, when accounts are initially organized by function, the result will resemble:

Expenses Classified By Function 5.1
Cost Of Revenue 5.1.1
Cost Of Goods Sold 5.1.1.1
--- ---
Emloyee benefits (a.k.a. wages and salaries) 5.1.1.1.1
Wages 5.1.1.1.1.1
Salaries 5.1.1.1.1.2
--- ---
Cost Of Services Rendered 5.1.1.2
--- ---
Emloyee benefits 5.1.1.2.1
Wages 5.1.1.2.1.1
Salaries 5.1.1.2.1.2
--- ---
Selling, General, Administrative 5.1.2
Selling and Marketing 5.1.2.1
--- ---
Emloyee benefits 5.1.2.1.1
Salaries 5.1.2.1.1.2
Commissions 5.1.2.1.1.3
--- ---

When accounts are initially organized by nature, the result can resemble:

  Account   Department
--- ---   ---
Expenses Classified By Nature 5.2    
Employee Benefits 5.2.2    
Production department 5.2.2 - 5.1.1.1
Service department 5.2.2 - 5.1.1.2
Sales department 5.2.2 - 5.1.2.1
Administrative department 5.2.2 - 5.1.2.2
--- ---    

Also note, while it would be possible to add a digit for country of domicile, subsidiary, segment, reporting unit etc., in practice it is more practical for each such entity to maintain separate accounts, which are then consolidated:

  Country   Account   Department
---     ---    
Employee Benefits - US 1 - 5.2.2    
Production department - US 1 - 5.2.2 - 5.1.1.1
Service department - US 1 - 5.2.2 - 5.1.1.2
Sales department - US 1 - 5.2.2 - 5.1.2.1
Administrative department - US 1 - 5.2.2 - 5.1.2.2
---     ---    
Employee Benefits - France 2 - 5.2.2    
Production department - France 2 - 5.2.2 - 5.1.1.1
Service department - France 2 - 5.2.2 - 5.1.1.2
Sales department - France 2 - 5.2.2 - 5.1.2.1
Administrative department - France 2 - 5.2.2 - 5.1.2.2
---     ---    

 

Account Title Account # Balance
Assets 1 Dr
Cash And Investments 1.1 Dr
Cash And Cash Equivalents 1.1.1 Dr
Investments And Securities 1.1.2 Dr
Derivative Instruments And Hedges 1.1.3 Dr
Capital Leases, Lessor 1.1.4 Dr
Restricted Assets 1.1.5 Dr
Intercompany Investments 1.1.6 Dr
Receivables 1.2 Dr
Accounts, Notes And Loans 1.2.1 Dr
Notes And Loans Receivable 1.2.2 Dr
Receivables With Imputed Interest 1.2.3 Dr
Contracts Or Programs 1.2.4 Dr
Other Receivables 1.2.5 Dr
Inventory 1.3 Dr
Merchandise, Material And Supplies 1.3.1 Dr
Work In Process 1.3.2 Dr
Finished Goods 1.3.3 Dr
Capitalized Contract Cost 1.3.4 Dr
Other Inventory 1.3.5 Dr
Inventory For Long-Term Contracts Or Programs 1.3.6 Dr
Allowances And Adjustments 1.3.7 (Cr)
Accrued, Deferred And Other Assets 1.4 Dr
Prepaid Expense 1.4.1 Dr
Returnable Deposits 1.4.2 Dr
Accrued Revenue 1.4.3 Dr
Deferred Costs 1.4.4 Dr
Other Accrued And Deferred Assets 1.4.5 Dr
Investments And Other Assets 1.4.6 Dr
Property, Plant And Equipment 1.5 Dr
Land, Buildings And Improvements 1.5.1 Dr
Machinery And Equipment 1.5.2 Dr
Other Property, Plant And Equipment 1.5.3 Dr
Assets Under Construction 1.5.4 Dr
Intangible Assets 1.6 Dr
Intangible Assets Excluding Goodwill 1.6.1 Dr
Goodwill 1.6.2 Dr
Acquisitions In Progress 1.6.3 Dr
Liabilities 2 (Cr)
Accounts Payable And Accrued Liabilities 2.1 (Cr)
Accounts Payable 2.1.1 (Cr)
Accrued Liabilities 2.1.2 (Cr)
Employee-Related Liabilities 2.1.3 (Cr)
Taxes Payable 2.1.4 (Cr)
Interest And Dividends Payable 2.1.5 (Cr)
Debt And Capital Lease Obligations 2.2 (Cr)
Debts 2.2.1 (Cr)
Notes And Loans Payable 2.2.2 (Cr)
Special Assessment Bond 2.2.3 (Cr)
Long-Term Federal Home Loan Bank Advances 2.2.4 (Cr)
Capital Lease Obligations 2.2.5 (Cr)
Deferred Revenue And Credits 2.3 (Cr)
Contracts Or Programs 2.4 (Cr)
Billings In Excess Of Cost 2.4.1 (Cr)
Derivative Instruments And Hedges 2.5 (Cr)
Derivative Liability 2.5.1 (Cr)
Hedging Liabilities 2.5.2 (Cr)
Energy Marketing Contract Liabilities 2.5.3 (Cr)
Liabilities Other Than Debt 2.6 (Cr)
Related Party Liabilities 2.7 (Cr)
Related Party Accounts Payable 2.7.1 (Cr)
Related Party Notes Payable 2.7.2 (Cr)
Due To Employees 2.7.3 (Cr)
Due To Officers Or Stockholders 2.7.4 (Cr)
Due To Affiliate 2.7.5 (Cr)
Due To Other Related Parties 2.7.6 (Cr)
Other Liabilities 2.8 (Cr)
Equity 3 (Cr)
Paid-In Capital 3.1 (Cr)
Common Stock 3.1.1 (Cr)
Preferred Stock 3.1.2 (Cr)
Additional Paid-In Capital 3.1.3 (Cr)
Legal Equity (Statutory Capital) 3.1.4 (Cr)
Retained Earnings 3.2 Dr / (Cr)
Appropriated 3.2.1 (Cr)
Unappropriated 3.2.2 (Cr)
Retained Earnings Deficit 3.2.3 Dr
Suspense Account 3.2.4 Dr / (Cr)
Accumulated Other Comprehensive Income 3.3 Dr / (Cr)
Foreign Currency Translation Gain (Loss) 3.3.1 Dr / (Cr)
Available For Sale Securities Gain (Loss) 3.3.2 Dr / (Cr)
Impairment Debt Securities 3.3.3 Dr
Cash Flow Hedges Gain (Loss) 3.3.4 Dr / (Cr)
Defined Benefit Plan Income (Loss) 3.3.5 Dr / (Cr)
Other Equity 3.4 Dr / (Cr)
Unearned Sop Shares 3.4.1 Dr
Receivable From Officers, Directors For Issuance Of Capital Stock 3.4.2 Dr
Receivable From Shareholders Or Affiliates For Issuance Of Capital Stock 3.4.3 Dr
Stockholders' Equity Note, Subscriptions Receivable 3.4.4 Dr
Warrants, Rights Outstanding 3.4.5 (Cr)
Other Additional Capital 3.4.6 (Cr)
Treasury Stock 3.4.7 Dr
Additional Items 3.4.8 Dr / (Cr)
Equity Attributable To Non-Controlling Interest 3.5 (Cr)
Revenue 4 (Cr)
Goods 4.1 (Cr)
Products And Merchandise 4.1.1 (Cr)
Products 4.1.1.1 (Cr)
Merchandise 4.1.1.2 (Cr)
Allowances, Discounts 4.1.2 Dr
Returns, Allowances 4.1.2.1 Dr
Sales Discounts (Consideration Paid To Customers) 4.1.2.2 Dr
Services 4.2 (Cr)
General Services 4.2.1 (Cr)
Allowances, Discounts 4.2.2 Dr
Sales Allowances 4.2.2.1 Dr
Sales Discounts 4.2.2.2 Dr
Itemized Services 4.2.3 (Cr)
Other Sales Revenues 4.2.3.38 (Cr)
Other Operating Income 4.3 (Cr)
Other Recurring Income 4.3.1 (Cr)
Expenses 5 Dr
Expenses Classified By Function 5.1 Dr
Cost Of Revenue 5.1.1 Dr
Cost Of Goods Sold 5.1.1.1 Dr
Cost Of Services Rendered 5.1.1.2 Dr
Other Costs Of Sales 5.1.1.3 Dr
Selling, General, Administrative 5.1.2 Dr
Selling And Marketing 5.1.2.1 Dr
General, Administrative Expenses 5.1.2.2 Dr
Other Operating Expenses 5.1.2.3 Dr
Doubtful Accounts 5.1.3 Dr
Expenses Classified By Nature 5.2 Dr
Merchandise, Material, Supplies And Utilities 5.2.1 Dr
Employee Benefits 5.2.2 Dr
Services 5.2.3 Dr
Rent, Depreciation, Amortization And Depletion 5.2.4 Dr
Taxes And Fees 5.2.5 Dr
Other Expenses 5.2.6 Dr
Other Revenue, Expenses, Gains And Losses 6 Dr / (Cr)
Gains And Losses 6.1 Dr / (Cr)
Foreign Currency 6.1.1 Dr / (Cr)
Other Non-Operating Income Or Loss 6.1.2 Dr / (Cr)
Restructuring Charge 6.1.3 Dr
Inventory Write-Downs (Not Recognized In Cost Of Sales) 6.1.4 Dr
Impairment Charge 6.1.5 Dr
Extinguishment Of Debt 6.1.6 Dr / (Cr)
Business Combination, Acquisition Related Costs 6.1.7 Dr
Gain (Loss) Related To Litigation Settlement 6.1.8 Dr / (Cr)
Asset Retirement Obligation 6.1.9 Dr / (Cr)
Unusual And/Or Infrequent Items 6.1.10 Dr / (Cr)
Additional Itemized Gains And Losses 6.1.11 Dr / (Cr)
Non-Operating Revenues, Expenses 6.2 Dr / (Cr)
Non-Operating Revenues 6.2.1 (Cr)
Non-Operating Expenses 6.2.2 Dr
Non-Monetary Transactions 6.3 Dr / (Cr)
Income Tax (Benefit) 7 Dr / (Cr)

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