[GNC-dev] [GNC] Recording dividend payoffs

John Ralls jralls at ceridwen.us
Tue Apr 16 23:07:13 EDT 2019

If Justin's proposal refers to 
> 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

There's no reason to challenge it. Nothing in GnuCash prevents you from doing that. 

John Ralls

> On Apr 16, 2019, at 4:59 PM, Phil Diacono <satphil at gmail.com> wrote:
> I agree with Justin. Other than "this is how it works" or "here's a
> workaround", 
> I don't believe I've seen an argument challenging his proposal. Can I
> encourage you to consider this approach for a future release?
> Am I correct in thinking that the other category that drains retained
> earnings 
> is capital expenditure? 
> Phil Diacono
> - 
>> 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
> --
> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-Dev-f1435356.html
> _______________________________________________
> gnucash-devel mailing list
> gnucash-devel at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-devel

More information about the gnucash-devel mailing list