[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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