Equity-Opening Balance Never Changes

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Equity-Opening Balance Never Changes

janfl
I have been using gnu cash for a couple of months. What I am noticing is that my equity balance never changes under accounts. Under equity, it says opening balances. I want it to show how much equity I have after everything is balanced. It just stays fixed at opening balance and yes, I know that is my opening balance. I would like the accounts page to reflect my current equity.  I pull the reports to get my cash flow and profit and loss. Would appreciate if someone could advise me.
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Re: Equity-Opening Balance Never Changes

Derek Atkins-3
Hi,

On Sun, June 10, 2012 1:41 pm, janfl wrote:

> I have been using gnu cash for a couple of months. What I am noticing is
> that
> my equity balance never changes under accounts. Under equity, it says
> opening balances. I want it to show how much equity I have after
> everything
> is balanced. It just stays fixed at opening balance and yes, I know that
> is
> my opening balance. I would like the accounts page to reflect my current
> equity.  I pull the reports to get my cash flow and profit and loss. Would
> appreciate if someone could advise me.

This is a FAQ.  I should probably add it there.

You are confusing "Equity Accounts" from "Instantaneous Equity"..  The
I.E. includes Income and Expense values, which are not rolled up into your
Equity Accounts.  To compute your Instantaneous Equity you need to run a
Balance Sheet.

Your Equity accounts will always show your equity at a single point in
time.  Generally it's the Opening Balances, but you can roll up your
Income and Expense accounts into an Equity account by "closing the books".

I hope this helps.

> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

-derek

--
       Derek Atkins                 617-623-3745
       [hidden email]             www.ihtfp.com
       Computer and Internet Security Consultant

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RE: Equity-Opening Balance Never Changes

janfl
Thank you Derek for your prompt response and for clarifying it for me!

Date: Sun, 10 Jun 2012 10:56:56 -0700
From: [hidden email]
To: [hidden email]
Subject: Re: Equity-Opening Balance Never Changes

Hi,

On Sun, June 10, 2012 1:41 pm, janfl wrote:

> I have been using gnu cash for a couple of months. What I am noticing is
> that
> my equity balance never changes under accounts. Under equity, it says
> opening balances. I want it to show how much equity I have after
> everything
> is balanced. It just stays fixed at opening balance and yes, I know that
> is
> my opening balance. I would like the accounts page to reflect my current
> equity.  I pull the reports to get my cash flow and profit and loss. Would
> appreciate if someone could advise me.
This is a FAQ.  I should probably add it there.

You are confusing "Equity Accounts" from "Instantaneous Equity"..  The
I.E. includes Income and Expense values, which are not rolled up into your
Equity Accounts.  To compute your Instantaneous Equity you need to run a
Balance Sheet.

Your Equity accounts will always show your equity at a single point in
time.  Generally it's the Opening Balances, but you can roll up your
Income and Expense accounts into an Equity account by "closing the books".

I hope this helps.

> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

-derek

--
       Derek Atkins                 617-623-3745
       [hidden email]             www.ihtfp.com
       Computer and Internet Security Consultant

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Re: Equity-Opening Balance Never Changes

Mike or Penny Novack
In reply to this post by janfl
janfl wrote:

>I have been using gnu cash for a couple of months. What I am noticing is that
>my equity balance never changes under accounts. Under equity, it says
>opening balances. I want it to show how much equity I have after everything
>is balanced. It just stays fixed at opening balance and yes, I know that is
>my opening balance. I would like the accounts page to reflect my current
>equity.  I pull the reports to get my cash flow and profit and loss. Would
>appreciate if someone could advise me.
>
>  
>
I guess I need to do this every couple months?

History of double entry bookkeeping.

Originally (late Renaissance) there were no income or expense accounts.
Those transactions were immediately entered against equity. The somebody
bright realized that more information about the business operations
would be available if there were "income" and expense" accounts as
temporary (not "standing") accounts of fundamental type equity. At some
interval (whatever useful for the business) these would be closed to
equity with the amount needed to close the account being whatever
brought it to zero balance -- so that total now available. Slightly
later noticed that if these income and expense accounts were first
closed to a special "profit and loss" account then THAT showed useful
information and the amount needed to close "profit and loss" to equity
was the net profit or loss for the period.

It is easier with computerized systems that show us things like the
running balance of each account (they didn't have that) and reports that
can be run  without closing accounts.

Note that you perhaps might not (really want) what you are asking for.
Instead of JUST the balance of equity, wouldn't it be preferable to see
the initial equity and then the net profit (or loss) for each subsequent
accounting interval? So that you can see that history? I don't use the
automated close the books, but even if you did I strongly suspect you
could later alter the description field of the closing transaction to
label it with year, etc. (if you close manually, of course you describe
that closing transaction whatever you like.

Michael
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