Christopher, In another post on this thread in reply to Mike Novak's reply to an earlier post I outlined how Equity:Retained Earnings is generally used in accounting theory and the distinction between contributed capital and earned capital usually made in corporate accounting. The Retained Earnings is the nett *operating* income as you suggest (usually separate from any income from financing activities of a company. This clear separation is perhaps really only essential for corporate structures where there is a legal separation of the liabilities of the shareholder from the liabilities of the business although other business users (partneships, sole traders) may want to provide a similar degree of separation for their management purposes.
Do you know if GnuCash has a flag indicating whether the books have been closed formally or is just the presence or absence of the closing transactions used to detect this? If the books are not formally closed then it is obviously difficult to reflect the transfer between earned capital and contributed capital that occurs when dividends are paid or money is reinvested in the business unless the accounts specifically affecting retained earnings can be specified, perhaps in the options? Not all credit splits to equity for example will reflect such transfers as there are likely to be transactions involving the share capital (splitting, buy backs etc) which don't affect Retained Earnings. David ----- David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ gnucash-user mailing list [email protected] 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.
