Changing to new financial year

[Mike or Penny Novack]

Michael McKay wrote:

>In general, you don't need to do anything.  All the reports will work with multiple years of data so you can see the asset and liability info at a point in time and income and expenses during a period.
>
>You may want to save and archive a copy of the file once any end-of-year adjustments are made and keep it for reference.
>
>The GNU Cash documentation/archives also mentions that you can zero out income and expenses accounts by adding a closing transfer to equity:closing balance or some such account on the last day of the year.  People do this so the account balances in the ledger makes sense for the following period.  If you don't, a salary account, for example, will show the sum of all salary received since the file was created.  If you do, then you have to ignore the closing transactions in the prior years.  Some of the reports include options to ignore the closing transactions. Other people suggest making these transactions on the last day, say 31/12/xx and then only reporting up to 30/12/xx on any reports.
>
>Personally, I find the closing transactions to be a pain and don't bother with them.
>
>Yours,
>
>Michael McKay
>MJM Consulting
>613.724.8169
>
>  
>
Just in case this ever comes up I'll mention how the "big boys" might do 
this. Handy for the purpose of book closing (for those transactions that 
are just transfers, not external fiscal transactions) is to have a 
special "date" which isn't part of any fiscal year but lies "in 
between". In the system in which I worked, essentially it was a "day" 
where "yesterday" (significant* in the processing of our system) and 
"today" were the same.

As GnuCash stands, what you have to do is either close books (for 
externals) early or open late (for externals) as far as the reports are 
concerned. In other words, you have a date which isn't in the reports. 
For the MA Chapter of the Chestnut Foundation I open "late" -- assumed 
no "business" takes place on January 1st. Not a great nuisance, but 
ideally I would like the availability of a pseudo date that could be 
assigned to fall between any dates desired (depends on how the entity's 
"fiscal year" is defined). Simply what I am used to.

I haven't yet tried out "close the books" so don't know how /if it 
records the activity of formal book closing.

Michael D Novack

* not running in real time and not running every day and so often there 
would be more than one real day from "yesterday" to "today" and a cycle 
would be processing all transactions (many being automatic transactions) 
scheduled to take place after yesterday and through today. For example, 
the system did not run on Sunday and ordinarily did not run on Saturday 
or on days that the stock markets were closed. Thus the special 
"closing/adjustment" run would not be processing ANY automatic 
transactions since "yesterday" and "today" were the same.