Chris,
> Or are we talking about Dividends whereby the individual (has shares in > companies) receives money from these shares? This one is Income:Dividends to > Asset:Bank and gets wound up into Retained Earnings after closing books. This isn't what I am talking about. A company can own share in other companies just as a person can. As you very rightly mentioned, this is Income of the company/person. Hence Income:Dividends to Asset:Bank. > Justin are you talking about Dividends whereby the business owner (with > shareholders) sends monies to shareholders? I don't know how to book these > transactions. Asset:Bank -> Expenses:Dividends? Yes, this is what I am talking about - profit share to owners/shareholders. And such payments aren't technically expenses. It's wrong to put them under expense even though that's what we are doing now. Dividends are money that goes out of the company account as a return of shareholder's investment. So dividends are decrease in Retained Earnings or Equity account; it is not an expense even though the money is going out. > Or a combined one whereby the Company Owner (has full, or partial shares in > company) decides to issue dividends, and pays himself and other shareholders > a dividend? (Asset:Business:Bank -> Asset:Personal:Bank) ??? Even in this case, there are pay offs that goes to himself and other shareholders. So yes, this is also the dividend in question. The transaction that you make here is from your business bank to other personal banks accounts of yourself and/or shareholders. It is unwise to include any personal banking accounts in the business account, it messes up your company's assets. If it's sole proprietorship, this is fine. But if it's a business of legal standing (all small businesses are), including personal assets in GnuCash company accounts just imbalances the company's total assets. You can create another account for that File>New File. There should be no Asset:Personal:Bank account in a company book. Let me share how dividends are recorded (irrespective of size of the company) in real world. Quit honestly it's not rocket science. But explaining it is pretty difficult. I'll try. You record two transaction in double entry system for dividends payoffs: a) When the dividends are declared, there is a new liability in the company and you record that by debiting (decreasing) Retained Earnings and crediting (increasing) Liability. Retained Earnings | Description | Corresponding journal | Debit | Credit | Balance ```````````````````````````````````````````````````````````````````````````````````` Date | Dividends to be paid to shareholder(s) | Liabilities:Dividends Payable | $125,000 | - | -$125,000 b) When the dividends are paid, there is no more liability and the money decreases in bank account. You record that debiting (decreasing) Liability and crediting (decreasing) Current account. Dividends Payable | Description | Corresponding journal | Debit | Credit | Balance ```````````````````````````````````````````````````````````````````````````````````` Date | Dividends paid to shareholder(s) | Assets:Current Account | $125,000 | - | 0.00 Since most businesses don't close their books because it's more convenient to continue and their legislation allows it, it's hard to credit Retailed Earnings account in Equity. Also, it's technically not right to only debit Retailed Earnings and not credit it. It'll always be in minus. Secondly, there is another 'Retained Earnings' that appear in balance sheet which shows the net income. So two Retained Earnings in the balance sheet is just unnecessary. To fix this, we can use another account called 'Dividends Declared' under Equity instead of Retained Earnings and you'll record it here when dividends are declared, Dividends Declared | Description | Corresponding journal | Debit | Credit | Balance ```````````````````````````````````````````````````````````````````````````````````` Date | Dividends to be paid to shareholder(s) | Liabilities:Dividends Payable | $125,000 | - | -$125,000 Dividends are paid out and therefore 'Dividends declared' register will always be in minus and in red font since there will be no credit to it. This also serves as a value that has to be adjusted from total net income to give the true Retained Earnings in Balance sheet. Equity register will be in minus over time after dividends paid to shareholder exceed their investment (they get the profit). And it's fine. When a balance sheet is generated, the equity won't be minus since Assets are included in the formula: Equity = Assets - Liabilities. If you're paying shareholder more money that means you have great profit, so equity will be positive in balance sheet. Also, generate the balance sheet and generate income statement and you would find that Retailed Earnings is the same as the net income amount. Retained earnings should reflect the dividend paid to owners. That's the technical definition to Retained Earnings. Not net income. If we are fixing this issue, this is what we need to do. a) Fix the formula to calculate Retained Earnings in Balance Sheet- it should adjust dividends paid b) To understand which transactions are dividends so that a works, we need to create a dividend account type in Equity (like assets have 6 types). And the user has to enter the dividend payoff in this account under Equity. This solves the whole issue and it doesn't affect anything else. References, https://www.accountingcoach.com/blog/recording-dividend-payment https://www.double-entry-bookkeeping.com/capital/dividends/ https://www.accountingtools.com/articles/how-do-i-account-for-cash-dividends.html And John, > Justin, > > No, just you. This is real simple: GnuCash provides two ways to account for > reporting retained earnings, including dividends. I'm not asking you to do > anything, I'm telling you how GnuCash works. Either you use one of those two > ways or you use a different accounting program. We've been over this. And I am telling you again that how GnuCash handles dividends isn't the right way. Recording dividends as an expense is technically wrong. It doesn't decrease the equity. And dividends can be paid and recorded correctly without closing the books in today's age. I am just surprise how reluctant you are to acknowledge that there is an issue with the current system and to discuss a possible solution. You're impossible man! - Regards, Justin Mathew mjus...@protonmail.com Sent with ProtonMail Secure Email. ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ On Wednesday, April 17, 2019 5:05 AM, Christopher Lam <christopher....@gmail.com> wrote: > I suspect there's vocabulary issue here. > > Justin are you talking about Dividends whereby the business owner (with > shareholders) sends monies to shareholders? I don't know how to book these > transactions. Asset:Bank -> Expenses:Dividends? > > Or are we talking about Dividends whereby the individual (has shares in > companies) receives money from these shares? This one is Income:Dividends to > Asset:Bank and gets wound up into Retained Earnings after closing books. > > Or a combined one whereby the Company Owner (has full, or partial shares in > company) decides to issue dividends, and pays himself and other shareholders > a dividend? (Asset:Business:Bank -> Asset:Personal:Bank) ??? > > On Tue, 16 Apr 2019 at 22:26, Justin Mathew <mjus...@protonmail.com> wrote: > > > John, Do you even realize what you've typed? > > > > > Sorry, you're wrong on both points. > > > > Apparently you're also implying that not just me, but the whole accounting > > ecosystem is wrong because we all believe that Retained Earnings is net > > income minus dividend payments. > > > > > GnuCash doesn't care about the dividend payment, it's up to the > > > user--i.e. you--to set up your Accounts correctly and make the dividend > > > payments with the right account. > > > > It has to care, else don't call it an accounting software, period! Do you > > not realize that there is no 'right account' in GnuCash for dividends? If > > you put is as expense that's technically wrong, if you put it as equity, > > the Retained Earnings calculations ignores it. Isn't that the whole gist of > > my emails - that we make one or find a better solution? Brainstorm, discuss > > potential solutions, see what we can do for next release to fix it instead > > of being defensive? > > > > The two explanations you gave doesn't fix the issue - > > > > a) You asked to close the books which will put the money into Retained > > Earnings. The problem with this solution is that it forces the user to > > close the books when he doesn't have to. Even if you ignore that, the > > solution doesn't take care of dividends. Dividends don't get adjusted to > > Retained Earnings because you still define Retained Earnings as total > > income - total expenses at a particular date. Well, that equation gives you > > total net income, not retained earnings. Simple accounting formulas. Maybe > > the naming system is wrong as mentioned by Frank. > > > > b) You asked to make an expense statement to record dividends. Well, that's > > the workaround we all are using at the moment, and everyone who replied to > > this thread did say that. I am merely suggesting that we find a proper > > solution to this because using an expense account for dividends is just > > technically wrong. > > > > >If you need an accounting program that handles it automagically, GnuCash > > >isn't the right solution for you. > > > > I don't need an automatic thing! No one is talking about handling dividends > > automatically. Dividends can be arbitrary and this very nature makes it > > impossible to automate it. I am talking about the right tools (accounts) to > > record dividends when they are declared. > > > > To metaphorize, We need a hammer to hammer a nail and you're saying, > > "Sorry, that's just unnecessary, we have an axe, hold the head sideways and > > hit the nail with that. It should work!". > > > > I am just wondering what others in the list thinks of this issue. Should we > > work on it, or just let it be? > > > > - > > Regards, > > Justin Mathew > > mjus...@protonmail.com > > > > Sent with ProtonMail Secure Email. > > > > - > > Regards, > > Justin Mathew > > mjus...@protonmail.com > > > > Sent with ProtonMail Secure Email. > > > > ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ > > On Wednesday, April 17, 2019 3:06 AM, John Ralls <jra...@ceridwen.us> wrote: > > > > > Justin, > > > > > > Sorry, you're wrong on both points. GnuCash doesn't care about the > > > dividend payment, it's up to the user--i.e. you--to set up your Accounts > > > correctly and make the dividend payments with the right account. I've > > > explained twice now how to do that, I won't again. If you need an > > > accounting program that handles it automagically, GnuCash isn't the right > > > solution for you. > > > > > > Regards, > > > John Ralls > > > > > > > On Apr 16, 2019, at 12:30 PM, Justin Mathew mjus...@protonmail.com > > > > wrote: > > > > John, > > > > > > > > > It's not a workaround, it's a choice. Either you close your books or > > > > > you don't. If you do then you close to a Retained Earnings account > > > > > and all is good. If you don't then GnuCash calculates your retained > > > > > earnings for you and all is good. At present if you mix the two then > > > > > you get two "Retained Earnings" lines in your report unless you name > > > > > the account something else. So don't mix them. > > > > > > > > I was referring to the use of 'Expense' accounts for dividend payments > > > > as workaround. Not the choice of closing or continuing the books which > > > > is of course a choice. > > > > Anyway, I have spent enough time putting my point across. Let me > > > > summarize what Frank and I meant in two bullet points. > > > > a) 'Retained Earnings' is your net income minus your dividends paid in > > > > general accounting terms. In GnuCash it means something else. > > > > b) GnuCash doesn't handle the dividend payment the technically correct > > > > way. Dividends should decrease the equity and gets balanced out. > > > > Only if b is fixed, can a be fixed. And no, this is not just pedantry! > > > > I wish you can see the seriousness in this issue. > > > > If it's a bug, users can wait for the fix in the next release, but if > > > > it's a flaw in design which isn't acknowledged, there is little that > > > > users can do. > > > > Thank you all. I know you'll do what's good for the software. > > > > > > > > - > > > > > > > > Regards, > > > > Justin Mathew > > > > mjus...@protonmail.com > > > > Sent with ProtonMail Secure Email. > > > > ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ > > > > On Wednesday, April 17, 2019 12:28 AM, John Ralls jra...@ceridwen.us > > > > wrote: > > > > > > > > > Justin, > > > > > It's not a workaround, it's a choice. Either you close your books or > > > > > you don't. If you do then you close to a Retained Earnings account > > > > > and all is good. If you don't then GnuCash calculates your retained > > > > > earnings for you and all is good. At present if you mix the two then > > > > > you get two "Retained Earnings" lines in your report unless you name > > > > > the account something else. So don't mix them. > > > > > If someone was so inclined GnuCash could handle a middle way to > > > > > combine the calculated retained earnings with a designated (by report > > > > > option, I suppose) retained earnings account and report it on a > > > > > single line, but frankly I don't see much reason for that beyond > > > > > pedantry. > > > > > Regards, > > > > > John Ralls > > > > > > > > > > > On Apr 16, 2019, at 9:31 AM, Justin Mathew mjus...@protonmail.com > > > > > > wrote: > > > > > > From what I have seen on GnuCash, we can generate profit loss > > > > > > statement for a fiscal year without closing the books. And > > > > > > therefore we can determine the dividends to be paid without closing > > > > > > the books. And anytime you generate a balance sheet, 'Retained > > > > > > Earnings' are mentioned. So we don't need to close any books to > > > > > > generate these figures. > > > > > > If you calculate 'Retained Earnings' as your net income minus > > > > > > dividends for that fiscal year, don't we credit the 'Retained > > > > > > Earnings' account without closing the books? > > > > > > > > > > > > > On the other hand, if you want to never close your books just > > > > > > > create an expense account for dividends and exclude it from the > > > > > > > various Expense reports and the Income Statement (aka Profit & > > > > > > > Loss) report. That's not formally correct, but the result is the > > > > > > > same. > > > > > > > > > > > > I know this workaround, it was discussed in the user mailing list > > > > > > itself. The reason of this thread is to find a fix to this issue at > > > > > > least for the next release. > > > > > > If we bring in a Dividend type account under Equity we can debit > > > > > > dividend declarations to this account. We don't have to credit this > > > > > > account by the way. The account will be in minus with red font as > > > > > > in current version. The balance in this account will be transferred > > > > > > to net account resulting in the proper 'Retained Earnings'. > > > > > > Eg, total net income = $50,000 > > > > > > Dividends are declared = $25,000 to be paid to shareholders > > > > > > Dividend Declared account in Equity will show -$25,000 since it is > > > > > > only debited. > > > > > > Retained Earnings = Net income + Dividend Declared = 50000+ > > > > > > (-20000) = 30000 > > > > > > When you calculate 'Retained Earnings' the way it should be > > > > > > calculated, it gives the accurate number whether the books are > > > > > > closed or not. > > > > > > GnuCash has to work accurately with all businesses whether small or > > > > > > big, instead of using workarounds. > > > > > > > > > > > > - > > > > > > > > > > > > Regards, > > > > > > Justin Mathew > > > > > > mjus...@protonmail.com > > > > > > Sent with ProtonMail Secure Email. > > > > > > ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐ > > > > > > On Tuesday, April 16, 2019 8:13 PM, John Ralls jra...@ceridwen.us > > > > > > wrote: > > > > > > > > > > > > > The Retained Earnings part of the Balance Sheet report was > > > > > > > written with that in mind. > > > > > > > The automatic calculation of retained earnings in the Balance > > > > > > > Sheet report nets out the income and expense accounts; if there's > > > > > > > a Retained Earnings account it will get reported too. Since the > > > > > > > way to credit Retained Earnings (an Equity account) is to close > > > > > > > the books, debiting all of the income and expense accounts by > > > > > > > their balances and crediting Retained Earnings. Now income and > > > > > > > expense are 0 and the calculated Retained Earnings line won't > > > > > > > appear. You can treat its appearance as a reminder that you > > > > > > > haven't closed the books yet. > > > > > > > On the other hand, if you want to never close your books just > > > > > > > create an expense account for dividends and exclude it from the > > > > > > > various Expense reports and the Income Statement (aka Profit & > > > > > > > Loss) report. That's not formally correct, but the result is the > > > > > > > same. > > > > > > > Regards, > > > > > > > John Ralls > > > > > > > > > > > > > > > On Apr 16, 2019, at 7:22 AM, 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-user@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-de...@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. King > > > > > > > > > > > > PGP Key fingerprint = 8D68 A91F 733B 2C1F 43B7 2B7C > > > > > > > > > > > > E591 E8E1 0DE7 > > > > > > > > > > > > C542 > > > > > > > > > > > > > > > > > > > > > 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-devel mailing list > > > > > > > > gnucash-de...@gnucash.org > > > > > > > > https://lists.gnucash.org/mailman/listinfo/gnucash-devel _______________________________________________ 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. 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