My bad, I saw the thread starting in the user list, I never saw it in devel. So when I replied, I set it to user. I’ll update my filters to file into devel ahead of user and be more careful next time when setting my reply address(es).
Regards, Adrien > On Apr 16, 2019, at 11:37 AM, John Ralls <jra...@ceridwen.us> wrote: > > Adrien, > > You copied the wrong list, this thread was in gnucash-devel. > > Regards, > John Ralls > >> On Apr 16, 2019, at 7:47 AM, Adrien Monteleone >> <adrien.montele...@lusfiber.net> wrote: >> >> If you create an Equity:Retained Earnings account and debit it, while >> crediting Dividends Payable (the formal method) does this not show up on the >> Balance Sheet? >> >> I understand that you would have two ‘Retained Earnings’ lines, one being >> the actual account and the other being the calculated amount by GnuCash. The >> sum of the two should be the true amount. This means you can’t submit the >> report as-is, but you could certainly export to a spreadsheet for the small >> modification first. >> >> Of course, it would be nice if the report factored in an actual >> Equity:Retained Earnings account to its calculation. >> >> There is an alternate practice of using a contra-equity account that is >> later closed to Retained Earnings called “Dividends Declared” or simply >> “Dividends”. I don’t see much advantage to it since you still have a >> liability you can track either way. >> >> Regards, >> Adrien >> >>> On Apr 16, 2019, at 9:04 AM, Justin Mathew via gnucash-user >>> <gnucash-u...@gnucash.org> wrote: >>> >>> Christopher, >>> >>>> The "Retained Earnings" part of the Balance Sheet has nothing to do with >>>> dividends. >>>> >>>> IIUC on the balance sheet date X, the retained earnings simply means the >>>> total income up to date X, minus total expenses up to date X. >>> >>> Don't get me wrong, the 'retained earnings' anywhere in accounting (not >>> just in the balance sheet) should have everything to do with dividends. >>> It's the accounting definition that 'Retained earnings' is the business' >>> net income - cash/stock dividends. >>> >>> The definition of 'total income minus total expenses' works only for sole >>> proprietorships where the business isn't a legal entity in it's own right. >>> A registered business, however small it is will have at least one >>> shareholder. Most small businesses will have more than one from what I have >>> seen. >>> >>>> From your description of 'owning a company with shares' / 'selling shares >>>> of company' / 'issuing dividends' I honestly have no idea how the books >>>> should look like, nor which chart of accounts should apply, nor whether >>>> the GnuCash reports are appropriate to produce useful reports. >>> >>> Oh yes, GnuCash should be able fit in all business, because they all follow >>> the same accounting principles. All we need to do is to calculate 'Retained >>> Earnings' as per the standard accounting formula - it should account for >>> dividends paid. >>> >>> Understanding which transactions are dividends to account for is a problem. >>> >>> Dividends are a decrease in equity and can't be recorded in an 'Expense' >>> type account (although that's the current workaround and technically >>> wrong). Therefore what I suggest is to create a dividend account type under >>> equity (equity currently has only 1 type of account) which can be used to >>> record dividend declarations. The value of this account can then be >>> adjusted from total income. This will give us the real 'Retained Earnings'. >>> >>> Note that: The corresponding journal entry for recording in dividend >>> declaration account is 'dividend payable' (which is a liability account >>> created by user). To record a dividend paid, a second record is created in >>> 'dividend payable' against the journal 'current account' or 'cash account'. >>> >>> - >>> Regards, >>> Justin Mathew > _______________________________________________ gnucash-devel mailing list gnucash-devel@gnucash.org https://lists.gnucash.org/mailman/listinfo/gnucash-devel
