Christopher, my error. If you re-read the original post the transaction was posted Assets:Cash and Equity:Shareholder Distribution. Liability was not in the equation. Basically, your comments confirm that the GNUCash automatic calculation is rudimentary and to get a true "retained earnings" that one must "close" books, or consider the Balance Sheet report with a correction needed for the "Retained Earnings" line is involved.
My previous statement should have read > > Christopher, then I believe you are saying to get a proper "retained > > earnings", which recognizes the reduction of Assets:Cash and > > increase to EQUITY:Shareholder distribution, that one > > would need to properly close the books by moving income and expense to a > > EQUITY:Retained Earnings sub-account? While that is disappointing, I can properly calculated true "retained earnings" from the Balance Sheet report and simply need to add the steps of "saving" a "open" version prior to closing the books, then closing income and expense to "EQUITY:Retained earnings" and "saving" that gnucash version with a tag of "closed" in the file name. Then there will be available a non-close version to go back and make corrections if errors are found in the future. Extra steps but workable. Thanks for the help. ------------------------------------------------------------------------------------------------------------------ On Tue, 10 Mar 2020 16:33:12 +0000 Christopher Lam <christopher....@gmail.com> wrote: > The right answer will be to submit the Transaction Report to the > accountant, have him/her calculate the Retained Earnings and > Shareholder Distribution for you, then you pay your shareholders via > Assets:Bank/Cash -> Liability:Shareholder (and later > Liability:Shareholder -> Expenses:Shareholder Dividends I guess?) > > I also think you'd close the books to an Equity:Retained Earnings > account rather than Liability:Retained Earnings. I think untold > surprises will arise if closing books to Liability. > > IMHO Balance Sheet's Retained Earnings seems designed to be Net Income > https://en.wikipedia.org/wiki/Net_income > > That's all I know. > > On Tue, 10 Mar 2020 at 15:29, Brian via gnucash-user < > gnucash-user@gnucash.org> wrote: > > > > On Tue, 10 Mar 2020 at 01:02, Brian via gnucash-user < > > > gnucash-user@gnucash.org> wrote: > > > > > > > I'm wondering if GNUCash is actually calculating RETAINED > > > > EARNINGS properly. Because after issuing a distribution to > > > > shareholder the Retaining Earning calculation increased by Net > > > > Income but did not decrease by Asset:Cash which was debited and > > > > credited to Equity:Shareholder Distribution. > > > > > > > > > > The calculation of Retained Earnings and Unrealized Gains in the > > > Balance Sheet is rather primitive, and has been as such since > > > nearly forever. > > > > > > Retained Earnings = sum total of income less expenses at the > > > balance-sheet date. > > > Unrealized Gains = sum total of (asset-liability) value, minus sum > > > total of (asset-liability) cost. > > > > Christopher, then I believe you are saying to get a proper "retained > > earnings", which recognizes the reduction of Assets:Cash and > > increase to Liability:Shareholder distribution, that one would need > > to properly close the books by moving income and expense to a > > Liability:Retained Earnings sub-account? > > > > > > > > > > > > _______________________________________________ > > 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.