Preventing unbounded file growth
Paul A.
abrahams at acm.org
Fri Apr 16 08:38:26 EDT 2010
It seems -- correct me if I'm wrong -- that closing the books adds
transactions (the zeroizing ones) but doesn't remove any transactions.
Therefore it doesn't help with the problem of unbounded file growth --
history, most of which is useless, going back into the indefinite past.
This is one of the few things that Quicken almost gets right -- but not
quite, since its solution isn't directly adaptable to true double-entry
bookkeeping as in Gnucash. (Great word , bookkeeping: three double-letter
pairs!) Quicken lets you split the file by putting all the old stuff
(anything before the split date) into a separate file, and offers you a
choice of either removing that old stuff from the current file or leaving it
there. But in Gnucash, blindly removing all transactions before the split
date would leave you with incorrect -- very incorrect -- balances.
The right way to do it in the Gnucash environment -- almost -- is to split
off the old stuff into a separate file, delete all the old transactions, set
the opening balance of each asset / liability account to its value as of the
split date, and fold the outstanding balances of the income/expense accounts
into equity as of the split date. That way, the new year (or whatever the
accounting period is) starts with a clean picture of the status of the
enterprise as of the first of the year -- no outstanding expenses or income,
and asset/liability/equity accounts set to their values as of the first of
the year. Optionally, asset/liability accounts with zero balances could be
dropped.
There is one drawback to this approach to closing the books: it loses asset
history, which in some cases is needed for tax purposes. Quicken, in fact,
keeps asset history for stocks even after closure, but in Gnucash, doing
that would unbalance the books. Perhaps the way around that would be to
create a special equity account that would be used to account for the other
side of each old stock purchase and sale, but I don't know what the
accounting implications of that would be. Another approach is much more
work: provide a program that looks through the books for a set of years and
extracts asset history, perhaps dumping it into a new file that has just the
assets of interest and an offsetting equity account.
The reason for going to all this trouble is that unbounded file growth can
get to be a nasty problem. In traditional accounting, you could just put
the books for past years into dead storage.
--
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