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Balance Sheet not show Retained Earnings #265

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DarithSoy opened this issue Oct 6, 2023 · 3 comments
Closed

Balance Sheet not show Retained Earnings #265

DarithSoy opened this issue Oct 6, 2023 · 3 comments
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bug Something isn't working High priority Created by Linear-GitHub Sync

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@DarithSoy
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Balance Sheet is unequal between Asset = Liabilities + Equities because the number forward from Net Income does not show on Retained Earning.

@abouolia abouolia added bug Something isn't working High priority Created by Linear-GitHub Sync labels Oct 6, 2023
@abouolia
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abouolia commented Oct 7, 2023

The retained earning and net income are different things, when we designed the report, we did it in traditional way, not showing net income row in the balance sheet, the assets and liability get balanced after closing expenses and income accounts.

You can see retained earning account under equity section (if it has balance of course) because the root type of the account is equity EOD.

But after deep thinking about this and communication with the team, it would be better to add "Net Income" as computed row (not as normal account) to adjust the equity section then liability and assets will be equal.

I've created a task for this #266

@DarithSoy
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The Retained Earnings under the equities account (Increase/Decrease) and the retained earnings are calculated based on results from the net income accumulated amount as of the period.
For example:
Net Income: Jan-23 = -400, Feb-23 = 500, Mar-23 = 200;
If we run the Balance Sheet as at:
Feb-23: is 100 (Jan-23 + Feb-23)
Mar-23: is 300 (Jan-23 + Feb-23+ Mar-23)

@abouolia
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The problem has been fixed #271, thanks a lot for mentioning that.

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