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Understanding the logic of Retained Earnings account with Example
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Purpose
This wiki provides a demonstration of how to understand the figures derived for a retained earnings account for the fiscal year 2013.
Overview
Within the balance carry forward, the P+L accounts are carried forward to the retained earnings accounts on the balance sheet
(definition in Transaction OB53). No documents are created. The balance carry forward can therefore not be carried out via the line item
display.
The opening balance on a retained earnings account consists of: Opening balance = Closing balance of the previous year + Retained
earnings from the P+L accounts
Consequently, the opening balance on a retained earnings account does not correspond to the closing balance of the previous year.
The carry forward balance of the retained earnings account is representing the cumulated year-end balance of the corresponding P&L
accounts. In this example the year-end balance of the P&L accounts are assigned to P&L account type 'X'.
Transaction OB53
Step 1 - Execute transaction FALGVTR for new GL balance carryforward (Transaction F.16 for Classic GL)
The program documentation on transaction FAGLGVTR states the following:
This program is used to carry forward the balances of the general ledger or another ledger to the new fiscal year. The program can be run
multiple times. Normally, the program does not need to be run more than once, since postings to the previous fiscal year are
automatically carried forward to the current fiscal year, if the balance carry forward program has already been run. Generally the balance
is carried forward as follows:
Balance sheet accounts are transferred with all additional account assignments.
P&L accounts are carried forward to the retained earnings account. Additional account assignments are not transferred. The transaction
currencies are not transferred and are totalled in the local currency. Retained earnings account(s) have to be maintained for the P&L
accounts in which all the P&L accounts are totalled.
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Select Retained earnings Account Button
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In SE16 table FAGL_CARRY_FORW - Last Balance Carryforward per Company Code/Ledger, is updated with new Fiscal year of balance
carry forward for company code and ledger. (Table T882 for classic GL)
The table FAGL_CARRY_FORW (table t882 for classic GL) only contains the carryfoward for the last fiscal year in this example it is 2013
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Step 2 - Check the cumulative P&L year-end balance of 2012 with report RFSSLD00
The carry forward period of the retained earnings account contains the cumulative amounts of the year-end balances of the P&L accounts
which are assigned to this P&L type.
In SE38 enter report RFSSLD00. Specify the P&L type (in this example the value is 'X') in the 'Free selections parameters of the selection
screen. Enter Chart of Accounts, Company Code, Fiscal Year and Reporting Periods.
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At the end of the balance list you can review that the total balance for the P&L accounts. The Accumulated balance = 15.307,52
Step 3 - Check closing balance for the Retained earnings account
In SE38 enter report RFSSLD00. To obtain the closing balance for the Retained earnings account for 2012 remove X from free selections
P&L statmt acct type. Enter Chart of Accounts, Company code, G/L Account (retained earnings account), Fiscal Year and Report Periods.
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Step 4 - Display G/L Account Balance
Using transaction FAGLB03 for new GL (FS10N for classic GL)
Enter Account number (Retained earnings account) , Company Code, Fiscal Year (balance carryforward fiscal year) and Ledger
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This cumulative balance is correct i.e. (Value from step 2 and value from step 3: 15.307,52 + 176,42) = 15.483,94
