On 1/3/24 12:19 PM, Quinn Wood wrote:
You already give advice on how to keep books on the wiki. There is an
entire page telling people you don't need to close your books in GnuCash
that proceeds to give people workarounds for how to do some of the things
closing your books accomplishes. Adding this workflow isn't accounting
advice, and frankly people are way beyond that. Even if this was accounting
advice, at least it would be correct under GAAP and IFRS unlike the
explicit advice that retained earnings are the same as net income or the
implied advice that retained earnings belong on a sole proprietor's or
partnership's balance sheet.
Be careful with the use of 'you'. With a handful of exceptions, everyone
on this list is just another user like yourself, not developers. A few
have contributed to the wiki, but short of specifically speaking to the
page author of wiki article, using a collective 'you' is quite out of place.
For the record, GnuCash is designed for Personal & Small Business
accounting. How 'small' is intended here, I'm not sure. I recall some
brief discussion on this list a few years ago.
But it doesn't stop you from following standards if you need to.
What it likely will never do is offer special features or reports that
are more geared toward special business forms like formal corporations.
It won't stop you from doing old-fashioned accounting for them, however.
On the flip side, the workflow people keep recommending on the wiki and
mailing list does conflict. You have to keep a paid dividend on your books
as a payable liability forever, put it on your books as an expense (to
fraudulently reduce equity and reducing net income), or just never declare
one. Do that and see how quick taxing authorities, lenders, or investors
call foul.
It seems your use case is one that benefits from more formal processes.
Then use them. The usage advice on the wiki and here on the list is for
Personal, less formal needs.
It has been some time since I looked at this topic, but if I recall
correctly, Dividends Payable go on your books at recognition, and while
they remain forever (like every other liability), they are zeroed out at
disbursement. (upon payment) And Paid Dividends *are* supposed to reduce
Equity as they are disbursements of that Equity to Owners and no longer
retained by the Corporation. That isn't fraud. That is how you account
for Dividends.
Regards,
Adrien
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