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Toolbox sap-acct Reply from SAP_EZ on May 25 at 9:47 PM Hello,
If I am understanding, you wish to have a P&L income summary account that receives all close-out from P&L. Since this account is also a P&L account itself, it will then close out to the balance sheet RE account.
Later, you can include the appropriate account in your reporting/analysis. Is this a fair restatement of your requirement?
Since balance sheet accounts are by definition cumulative for all time, I would hesitate to use the term "RE account for current year P&L activity" and would instead refer to it as "income summary" for the current year. Income summary is a nominal account, whereas retained earnings is a real account (to use phrases from yesteryear). Real accounts are not closed out.
This will serve you well especially if you declare dividends, reducing retained earnings. I say this because declared dividends do not have the context of being funded by current year earnings versus by cumulative years' earnings. This is a subtle thought, but I think it's best for accountants and IT personnel to always say what we mean, and mean what we say.
Regards,
Greg
| | | ---------------Original Message---------------
From: Kathrine
Sent: Tuesday, May 22, 2012 9:23 AM
Subject: Current Year (CY) Retained Earnings (RE) Account and Previous Year (PY) RE Account
For my company, we have a Current Year (CY) Retained Earnings (RE) account and we have Previous Year (PY) RE account. For our CY RE; from a balance sheet view this account should equal our current period P & L (I think from a trial balance point of view this account should always be zero). For our PY RE; this account should be the total PY RE. After a period is closed, the balance of the P & L for this period should roll to this account. We have an issue where the retained earnings do not roll. What we think should happen (which I'm told happens very commonly in other companies) is that after the period is closed the balance of the P & L should roll into PY RE….so how do we make SAP, after the period is closed ( a ) roll the CY RE balance to the PY RE account? ( b ) have the balance of the P & L roll into the PY retained earnings going forward and ( c ) make the BS so that it shows the balance of the RE account and calculates the CY RE to equa
l the current period P & L? |
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