Undistributed profit will transfer to the Reserve and Surplus Account
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’.
IMG-Financial Accounting- General Ledger Accounting- G/L Accounts-Master Records -Preparations-Define Retained Earnings Account.
Step 1 -New GL balance carry forward Transaction FALGVTR (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.
Click on “Execute”.
Select Retained earnings Account Button
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
You note that the closing balance for 2012 does not match the opeing balance for 2013 via transaction FAGLB03
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.
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.
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
This cumulative balance is correct i.e. (Value from step 2 and value from step 3: 15.307,52 + 176,42) = 15.483,94