Year end procedure...

[Mike or Penny Novack]

>You can create new transactions since it uses a date as to when to close the books (so for me, I do transactions on 1/1/2010 onwards, and they won't be pulled in by the close-books function.
>
>Since it's just a really big "split" transaction, you can still change stuff in the old books, you just have to make the same changes in the equity transfer transaction if you want it all to still hold as the "close", personally I wait until I've gotten all statements/transactions from the prior year finished before I do the close books, but this is personal use, business use may require different handling.
>
Since for my organization (which does require formal reporting) these 
matters are of relevance I'll describe how I do it. In my case:
a) I might have to be able to produce TENTATIVE end of year reports 
depending on the date of the January board of directors meeting. Might 
be subject to corrections, etc. On line banking or credit card reporting 
no use here. Just because I know "a transaction has taken place" doesn't 
mean I can enter it into the books as might need to contact the person 
responsible asking "what was that for?" Yes they are supposed to tell me 
but it's an all volunteer organization and sometimes people are lax. As 
a matter of fact, I don't myself produce the "formal" reports but 
instead send what GnuCash produces (Balance Sheet and Income Statement) 
to the person who uses that data to create a proper GAAP for non-profits 
annual report. In extreme cases I might have to recreate the reports 
after entering "late reported" transactions (which WOULD require redoing 
"close the books").
b) I might already have transactions reported for the new year I need to 
be able to enter.

So HOW? I assign the date of Jan 1st to be outside of any year (no 
external transactions). That is the date used for closing the books. The 
date ASSIGNED to the closing transactions -- actually not likely done 
till at least a week or two into January). So when running an Income 
Statement or other "for a period" report this date would not be included 
in the date range (an Income statement for the calendar year would be 
Jan 2nd through Dec 31st --- remember, no external transactions dated 
Jan 1st).

If it turned out that I had to redo "close the books" (a major late 
reported transaction that would distort expenses for the year) I would 
just delete those two Jan 1st transactions and then redo them after 
entering what was missing. And of course rerun the reports (and if after 
the person who created the according to GAAP version, he'd have to 
redo/fix that too).

In terms of security (legal) after the final version a directory 
containing the books and exported reports for the year are burned to 
media and distributed both as remote backup and check against later 
alteration -- in other words, not all copies are under my control. After 
all, as somebody who once made my living designing and creating 
financial software, no "part of the program" security would be 
meaningful even if it existed.

Michael D Novack, FLMI


-- 
There is no possibility of social justice on a dead planet except the equality of the grave.