[GNC] Recording dividend payoffs

Maf. King maf at chilwell.net
Tue Apr 16 08:04:03 EDT 2019


Hi Justin,

you should keep replies on-list, others can contribute and maybe in the future 
the thread can save a question being asked in the first place....  "reply All" 
in your email client is a good way.

I think it is a bit of a technical distinction, GAAP left over from the days 
of paper books.   Formally, expenses are a (set of ) temporary equity 
account(s) that should be closed (or zeroed) to a retained earnings equity 
account each year - to give a profit figure.  

whereas your earlier reference says that dividends are paid from a temproary 
equity account that reduces retained earnings. (sounds like an "expense" 
(english sense, not formal GAAP definition) to me, in that both sorts of 
payment reduce retained earnings - just that dividends are after the profit & 
tax calcs are done)

Closing the books was important in paper days, not so much with digital 
accounts where the software can do everything quickly & repeatably., IMHO 
closing books isn't really needed any more, as long as you keep secure backups 
& reports etc for traceablity over the years.

I have a part of the expenses tree that is something like "non-taxable".   so 
expenses:non-taxable:dividends   or :corporationTax  etc.  Easy to exclude the 
whole branch from reports rather than ad-hoc accounts.

If you think that it is a bug / sub-optimal behaviour, by all means submit a 
bug report or RFE for the devs to comment on.  They know far more than me 
about the GC architecture decisions etc.

Maf.


On Tuesday, 16 April 2019 12:21:52 BST Justin Mathew wrote:
> Yes, that seems to be the only way now. Gnucash doesn't complain if we do
> that way. And you're indeed lucky that you're accountant doesn't complain.
> :)
> 
> To think from a larger perspective now, I think GnuCash should to handle
> dividends the right way; primarily because dividend isn't technically an
> expense of the business and marking it as an expense will only create
> issues later (eg, inaccurate certain expense reports, wrong analytics,
> etc.).
> 
> If this behavior isn't because of the way we (users) are doing it, shall I
> notify in the development list to consider this as an error and correct it?
> 
> 
> -
> Regards,
> Justin Mathew
> mjustin at protonmail.com
> 
> Sent with ProtonMail Secure Email.
> 
> ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
> 
> On Tuesday, April 16, 2019 4:42 PM, Maf. King <maf at chilwell.net> wrote:
> > Hi Justin,
> > 
> > while it is contrary to the advice given in the link you supplied, I've
> > always recorded dividend payouts as an Expense - but it is one of a
> > handful that are excluded from the corporation tax calc, as they are
> > declared after tax / from profits.
> > 
> > My accountant has never complained - UK regs - YMMV, of course!
> > 
> > Maf.



-- 
Maf. King
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