[GNC-dev] [GNC] Recording dividend payoffs

John Ralls jralls at ceridwen.us
Tue Apr 16 15:02:47 EDT 2019


I think that the glossary entry is only partly right. "Retained Earnings" certainly can be an account, but it's also a concept: It's the collected profits of the company over time that haven't been distributed to the owners.

Earnings before stuff lines are non-GAAP values that publicly-traded companies use in their pro-forma reports to shareholders to make it look like they made a bigger profit than they did. GnuCash isn't for publicly traded companies so we don't need to bother with that noise.

John Ralls

> On Apr 16, 2019, at 9:35 AM, Frank H. Ellenberger <frank.h.ellenberger at gmail.com> wrote:
> Hi John,
> Am 16.04.19 um 16:43 schrieb John Ralls:
>> The Retained Earnings part of the Balance Sheet report *was* written with that in mind.
> Source?
>> 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.
> We have in our Glossary
> https://github.com/Gnucash/gnucash/blob/maint/po/glossary/gnc-glossary.txt#158
> :
> "Retained Earnings" "name of an equity account (?); to be distinguished
> from the opening balance."
> But that is a vague term. It was intended for private users, but
> business users have EBITA, EBIT, ...
> I remember, we had in German the translation "Gewinnvortrag", which is a
> formal correct translation for "Retained Earnings", but it was not, what
> GnuCash was showing. I did not check other translations, which meaning
> they have choosen.
> IMHO we should fix our terminology here. Suggestions?
>> 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 would not use an expense account, but reduce/share the income/equity
> depending on the legislation.
>> Regards,
>> John Ralls
> Regards
> Frank

More information about the gnucash-devel mailing list