Since Manager.io uses a perpetual inventory system and does not currently have a year-end closing wizard, the Balance Sheet shows the current-year net income as part of Retained Earnings.
For U.S. financial statements, I would prefer the traditional presentation where:
- Retained Earnings = accumulated net income from prior years
- Current-Year Net Income = net income for the current fiscal year, shown as a separate line on the Balance Sheet
- At year-end, the current-year net income would be closed into Retained Earnings.
For example, if the company has $100,000 of prior-year retained earnings and $30,000 of net income for the current year, I would like the Balance Sheet to show:
Retained Earnings: $100,000
Net Income: $30,000
Total Equity: $130,000
rather than showing the entire $130,000 under Retained Earnings.
Would it be possible to add an option to the Balance Sheet report to present current-year net income separately from retained earnings, without requiring a year-end closing entry?
This would make the Balance Sheet presentation much more consistent with the financial statements commonly used in the U.S.