[GNC] When closing books, equity statement report is incorrect

[Adrien Monteleone]

The GnuCash workflow doesn't include 'closing the books'.

That function was added by request, but it is entirely optional.


Following up from Michael's answer, I'll ask:

Why do you want to close the books? Habit?

GnuCash is designed to not need to. You can happily just keep plodding 
along until the Sun consumes the Earth.

Closing books was necessary in pen and paper days because books were 
physical volumes with limited space. They were not infinite.

This had the added benefit of catching errors periodically that weren't 
caught before, and which were likely due to transcription mistakes. 
(transactions and accounts were rarely even looked at much less 
referenced or reported on in between closings)

GnuCash doesn't require transcription - so less mistakes.

GnuCash forces double-entry - so less mistakes.

GnuCash can run reports for any desired date range - thus closing the 
books to get reports is not necessary. You can examine accounts, 
transactions and run any report at any time.

There is no 100% sure fire way to prevent editing of previous 
transactions, so closing the books has no bearing on this. (there are 
other approaches we can suggest if this is a concern)

If you still really really really *want* to close your books 
periodically, then I'll redirect you back to Michael's reply, in short:

You do it the same way you would using pen and paper, and simply avoid 
the 'closing the books' function in GnuCash. (which only zeroes the 
Income & Expense accounts, transferring their balances to Retained Earnings)

A more complicated option, if the Retained Earnings account is appearing 
in the wrong place in a report section, would be to:

1. Rewrite the report code to suit your needs
2. File a bug or enhancement request to fix this situation. (depending 
on if it is indeed a bug, or if you just would like it to work differently)
3. Export the report to a spreadsheet and manipulate from there before 
printing/saving.

Regards,
Adrien

On 10/21/23 9:44 PM, Quinn Wood wrote:
> How do I close my books at the end of a period and have the Equity
> Statement Report correctly show capital investments and withdrawals without
> classifying retained earnings as either? Retained earnings are neither.
> 
> I've every combination of workflows I can think of.
> * closing Q3 books into a separate top-level Income Summary account then
> transferring (in Q4) retained earnings and any declared dividends into
> Retained Earnings (an equity account) and Dividends Payable (a liability
> account)
> * closing Q3 books directly into Retained Earnings and later (in Q4)
> transferring declared dividends into Dividends Payable
> * using closing and dividend transaction descriptions that match the
> closing entries pattern in the Equity Statement report, that do not, or any
> combination of the two
> * including and excluding the Income Summary and/or Retained Earnings
> accounts in the Equity Statement report
> * closing Q4 books the same way as I closed Q3
> 
> My Q4 report is either full of incorrectly-interpreted numbers it's pulling
> from the Q4 closing entries (if I don't exclude them) or it's just missing
> data (if I exclude a transaction that includes transfers to retained
> earnings or dividends payable.)
> 
> I can't find a way to do this that works. What is this workflow supposed to
> look like?