[GNC] retained earnings between two different financial periods

[John Ralls]

> On Apr 20, 2019, at 2:33 AM, mc <mc8 at privmgt.com> wrote:
> 
> Config:
> gnucash 3.5 clean install.
> (X)ubuntu Linux 18.04
> gnucash files saved as sqlite.
> 
> Hi
> 
> I am new to gnucash and testing it.
> Most things I have tried work as expected (and extremely well ;-)  )
> 
> One question: on the page:
> www.gnucash.org/docs/v3/C/gnucash-help/tool-close-book.html <https://www.gnucash.org/docs/v3/C/gnucash-help/tool-close-book.html>
> it states:
> "GnuCash’s built-in reports automatically handle concepts
> like retained earnings between two different financial periods"
> 
> However when I tested it
> gnucash does NOT appear to separate retained earnings
> between two different financial periods.
> 
> When I print a balance sheet report,
> without closing the books,
> I just get 1 net retained earnings number:
>     Retained Earnings / Retained Losses
> that includes the amounts from previous years.
> 
> The P&L for different years works as expected.
> 
> (after closing the books, the BS report also works as expected)
> 
> What have I missed?

The Balance Sheet report calculates a "Retained Earnings" line as a "virtual" top-level account if it finds balances in the accounts of type Income or Expense, the balance being the net value of those accounts, i.e. total income - total expenses.

If you've previously closed your books to an account named Retained Earnings (which you'd normally put under an Equity top-level placeholder account) then it will show that balance too. So if you close your books at the end of each period and then run the balance sheet some time later you'll have two Retained Earnings lines: One for when you last closed and one for the transactions since then.

Regards,
John Ralls