I'm setting up this year's accounting ledger for a sole proprietorship. It used to be done by CPAs in the past but I decided it's time to bite the bullet and start doing it myself.

All is going well, except for how to include last year's balance sheet and profit and loss items in this year's bookkeeping. Typical items would be fixed assets, depreciation, loan payable to shareholder, deficit... I don't want to have to redo 10 years worth of bookkeeping just to recover them, so how would you create double-entry items for them in this year's ledger?

I'm using GnuCash but a general answer that can be adapted to any spreadsheet or personal accounting software would be appreciated/preferred.

1 Answer 1


When setting up a new accounting structure without having access to book entries from previous years one should use the figures from the latest Balance Sheet and Profit and Loss statement as initial balance for each account in the tree. Then one creates a corresponding entry in the Equity:Opening Balances account for each initial balance. In GnuCash using the transfer field will automatically create the double entry in Equity:Opening Balances.

Any account, even expense accounts, can start off with an 'initial balance' transferred from Opening Balance, both negative or positive amounts, in order to recreate your balance sheet. Just make sure your initial balance entries correspond to the debit/credit nature of the account. When done correctly, the equity in this account on the first day of the year, should match the balance sheet for the closed period at the end of last year.

Finally, one should note that GnuCash does not allow closing the books each year. Rather, accounting periods are set in the preferences to limit reports (including balance sheet) to a particular time span. Once a GnuCash ledger created, you can keep using it for several years and request statements for different periods as needed.

  • That's the thing Andy, previous years accounting was done by other people using other software. I took over and need to set it all up in GnuCash. Another turnaround to closing years in GnuCash would be to start a new file for each new accounting period. This would eventually help mitigate file size, but one would need a solution such as what you suggested.
    – zbinkz
    Jul 11, 2017 at 18:50
  • Got it. In that case you can create the same accounts you wish to duplicate in GNUCash and populate them from Equity:Opening Balances. Any account, even expense accounts, can start off with an 'initial balance' transferred from Opening Balances - negative or positive amounts to recreate your balance sheet.
    – Andy
    Jul 11, 2017 at 20:26
  • Hey, sorry for the late feedback but the thread was on hold pending proper edits. I like the idea of transferring Equity opening balance. Will try it tomorrow and let you know.
    – zbinkz
    Jul 12, 2017 at 21:21
  • Okay, it worked. Still have to do some fiddling to include accumulated amortization and the historical exchange rates to eliminate minor deviations, but statement continuity has been effectively recovered. Andy, you wanna edit your original answer so I can accept it?
    – zbinkz
    Jul 13, 2017 at 8:44
  • @zuz made slight edits, accept at your convenience if acceptable.
    – Andy
    Jul 13, 2017 at 18:26

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