> 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.
Yes, and that is an unnecessary thing to do if we fix it right in GnuCash. Moreover two 'Retained Earnings' in a report doesn't seem right too. I find the fix I mentioned in my earlier mail to be better. - Regards, Justin Mathew mjus...@protonmail.com Sent with ProtonMail Secure Email. ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ On Tuesday, April 16, 2019 8:17 PM, 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-user@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-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > > ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- > > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
