Year end functionality? version 1.2.18

[Phil Ross <..hidden..>]

Hi everyone

I am looking for some information on the Year End functionality of
LedgerSMB. Unfortunately, I can't find much in the manual (excerpt
included below).

Can any users on this fine list (esp. any in the UK) shed any light on
what they do with LedgerSMB at year-end, and whether this
functionality is useful or any pitfalls or caveats?

Thanks
Phil

4.7.4 Year-end
Although the Year-end functionality in Ledger-SMB is very useful, it
does not entirely make the pro-
cess simple and painless. One must still manually enter adjustments
prior to closing the books. The
extent to which these adjustments are necessary for any given business
is a matter best discussed
with an accountant.
The standard way books are normally closed at the end of the year is
by moving all adjusted1
income and expenses to an equity account usually called "Retained
Earnings." Assets and liabilities
are not moved. Equity drawing/dividend accounts are also moved, but
the investment accounts are
not. The reasoning behind this process is that one wants a permanent
record of the amount invested
in a business, but any dividends ought not to count against their
recipients when new investors are
brought on board.
Ledger-SMB automatically moves all income and expense into the
speciïed year-end/retained
earnings account. It does not move the drawing account, and this must
be done manually, nor does
it automate the process of making adjustments.
Contrary to its name, this function can close the books at any time,
though this would likely be of
limited use.