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

[Michael or Penny Novack]

On 1/4/2024 9:34 AM, Adrien Monteleone wrote:
> GnuCash is not getting in your way here. You are free to do what you 
> would do if you were keeping books using Pen & Ink. That process would 
> require the same accounts.
> What GnuCash is not doing here, that you are asking for, is providing 
> a report so you don't have to mimic the formal methods of Pen & Ink.
>
> And I'd say that GnuCash is correct in this approach.
>
> Recognizing Dividends and disbursing them is, at least in the U.S., 
> supposed to be explicit in the books - thus requiring specific 
> accounts. It can't be done with just a report as

Users should keep in mind that when we say things like "you don't have 
to close the books; gnucash can produce the necessary reports without 
doing that" we are talking about PERSONAL books and sole 
proprietorships. Equity in these cases is simply the equity of the "sole".

Businesses with more complex ownership will need a complex structure 
under equity because the ownership is not sole. That structure is 
keeping track of how equity is divided up among the "owners" -- plural. 
In that case probably will have to close the books to get the net 
income/loss properly distributed among these interests. And the "close 
the books" tool provided by gnucash might or might not be of use (it 
won't do the distribution part of it).

Sorry, but I think "how to keep books for a partnership" and "how to 
keep books for a corporation" is not what we should be giving advice 
about beyond "when using gnucash as the accounting software" (any 
peculiarities vs other software or pen and ink on paper). Both of these 
organizational forms will require equity to be structured. Not the same 
structure and the activities to be tracked will be different.

Michael D Novack