You mean here https://bugs.gnucash.org/ ?
- Regards, Justin Mathew mjus...@protonmail.com Sent with ProtonMail Secure Email. ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ On Tuesday, April 16, 2019 7:52 PM, Christopher Lam <christopher....@gmail.com> wrote: > Oops. My mistake: The "Retained Earnings" part *in GnuCash's* Balance-sheet > has not been written with that in mind by the original report writers. > > Amendments to reports are possible but please submit an enhancement in > bugzilla. > > Ideally with an suitable chart of accounts, with some sample real-life > transactions. > > On Tue, 16 Apr 2019 at 14:04, Justin Mathew <mjus...@protonmail.com> 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 > > mjus...@protonmail.com > > > > Sent with ProtonMail Secure Email. > > > > ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ > > On Tuesday, April 16, 2019 6:25 PM, Christopher Lam > > <christopher....@gmail.com> wrote: > > > > > 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. > > > > > > If the books were 'closed' on date X, the income&expenses would be zeroed > > > out to Equity:Closing Transactions. This is what Retained Earnings mean > > > to reflect. They suit most sole traders / small businesses very well. > > > > > > 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. > > > > > > On Tue, 16 Apr 2019 at 12:39, Justin Mathew via gnucash-user > > > <gnucash-u...@gnucash.org> wrote: > > > > > > > Maf, > > > > > > > > > you should keep replies on-list, others can contribute and maybe in > > > > > the future > > > > > the thread can save a question being asked in the first place.... > > > > > "reply All" > > > > > in your email client is a good way. > > > > > > > > Opps, I had read about it, but missed it in the heat of replying. > > > > Will keep that mind henceforth. > > > > > > > > > Closing the books was important in paper days, not so much with > > > > > digital > > > > > accounts where the software can do everything quickly & repeatably., > > > > > IMHO > > > > > closing books isn't really needed any more, as long as you keep > > > > > secure backups > > > > > & reports etc for traceablity over the years. > > > > > > > > Yes, I read this suggestion in gnu tutorial and concepts manual few > > > > hours ago infact. I am new to accounting to be honest. Just learning it > > > > with a fictitious company and transactions. > > > > > > > > > I have a part of the expenses tree that is something like > > > > > "non-taxable". so > > > > > expenses:non-taxable:dividends or :corporationTax etc. Easy to > > > > > exclude the > > > > > whole branch from reports rather than ad-hoc accounts. > > > > > > > > And I didn't know that feature existed. > > > > > > > > > whereas your earlier reference says that dividends are paid from a > > > > > temproary > > > > > equity account that reduces retained earnings. (sounds like an > > > > > "expense" > > > > > (english sense, not formal GAAP definition) to me, in that both sorts > > > > > of > > > > > payment reduce retained earnings - just that dividends are after the > > > > > profit & > > > > > tax calcs are done) > > > > > > > > That's a good way to think. And I guess, this is the only workaround at > > > > the moment. It does 'sounds' like expense but I am not too sure to say > > > > that it 'is' expense. > > > > > > > > I don't know if I can call this a bug; but this isn't the technically > > > > correct behavior. GnuCash is intended to be used in accounting spheres > > > > regulated by different govts and laws. And because of this, GnuCash > > > > should treat dividend payoffs in the standardized and technically > > > > correct way ie, a dividend declaration account that is a part of > > > > 'equity' which reduces the 'retained earnings' in reports. > > > > > > > > Anyway, let the more experienced development team make a call on this. > > > > I shall raise this with the dev team as well. I am alao copying this to > > > > gnucash-devel@gnucash.org. I am not a part of the dev mailing lists, > > > > but I guess this will reach them. > > > > > > > > - > > > > Regards, > > > > Justin Mathew > > > > mjus...@protonmail.com > > > > > > > > Sent with ProtonMail Secure Email. > > > > > > > > ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ > > > > On Tuesday, April 16, 2019 5:34 PM, Maf. King <m...@chilwell.net> wrote: > > > > > > > > > Hi Justin, > > > > > > > > > > you should keep replies on-list, others can contribute and maybe in > > > > > the future > > > > > the thread can save a question being asked in the first place.... > > > > > "reply All" > > > > > in your email client is a good way. > > > > > > > > > > I think it is a bit of a technical distinction, GAAP left over from > > > > > the days > > > > > of paper books. Formally, expenses are a (set of ) temporary equity > > > > > account(s) that should be closed (or zeroed) to a retained earnings > > > > > equity > > > > > account each year - to give a profit figure. > > > > > > > > > > whereas your earlier reference says that dividends are paid from a > > > > > temproary > > > > > equity account that reduces retained earnings. (sounds like an > > > > > "expense" > > > > > (english sense, not formal GAAP definition) to me, in that both sorts > > > > > of > > > > > payment reduce retained earnings - just that dividends are after the > > > > > profit & > > > > > tax calcs are done) > > > > > > > > > > Closing the books was important in paper days, not so much with > > > > > digital > > > > > accounts where the software can do everything quickly & repeatably., > > > > > IMHO > > > > > closing books isn't really needed any more, as long as you keep > > > > > secure backups > > > > > & reports etc for traceablity over the years. > > > > > > > > > > I have a part of the expenses tree that is something like > > > > > "non-taxable". so > > > > > expenses:non-taxable:dividends or :corporationTax etc. Easy to > > > > > exclude the > > > > > whole branch from reports rather than ad-hoc accounts. > > > > > > > > > > If you think that it is a bug / sub-optimal behaviour, by all means > > > > > submit a > > > > > bug report or RFE for the devs to comment on. They know far more than > > > > > me > > > > > about the GC architecture decisions etc. > > > > > > > > > > Maf. > > > > > > > > > > On Tuesday, 16 April 2019 12:21:52 BST Justin Mathew wrote: > > > > > > > > > > > Yes, that seems to be the only way now. Gnucash doesn't complain if > > > > > > we do > > > > > > that way. And you're indeed lucky that you're accountant doesn't > > > > > > complain. > > > > > > :) > > > > > > To think from a larger perspective now, I think GnuCash should to > > > > > > handle > > > > > > dividends the right way; primarily because dividend isn't > > > > > > technically an > > > > > > expense of the business and marking it as an expense will only > > > > > > create > > > > > > issues later (eg, inaccurate certain expense reports, wrong > > > > > > analytics, > > > > > > etc.). > > > > > > If this behavior isn't because of the way we (users) are doing it, > > > > > > shall I > > > > > > notify in the development list to consider this as an error and > > > > > > correct it? > > > > > > > > > > > > - > > > > > > > > > > > > Regards, > > > > > > Justin Mathew > > > > > > mjus...@protonmail.com > > > > > > Sent with ProtonMail Secure Email. > > > > > > ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ > > > > > > On Tuesday, April 16, 2019 4:42 PM, Maf. King m...@chilwell.net > > > > > > wrote: > > > > > > > > > > > > > Hi Justin, > > > > > > > while it is contrary to the advice given in the link you > > > > > > > supplied, I've > > > > > > > always recorded dividend payouts as an Expense - but it is one of > > > > > > > a > > > > > > > handful that are excluded from the corporation tax calc, as they > > > > > > > are > > > > > > > declared after tax / from profits. > > > > > > > My accountant has never complained - UK regs - YMMV, of course! > > > > > > > Maf. > > > > > > > > > > -- > > > > > > > > > > Maf. 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