Year end carrying forward process in SAP involves transferring the closing balances to the new fiscal year. The balance to be carried forward is shown in the account balance display screen.
To carry forward balances, you can use separate programs for General Ledgers, and for customers and vendors, therefore you do not even have to carry out the balance carry forward manually if you have already posted to the new fiscal year.
The balance carrying forward in SAP is executed as follows:
Carrying forward Balance Sheet, Customer and Vendor Accounts
The balances on the balance sheet accounts are simply carried forward into the new fiscal year. Additional account assignments are transferred. There are no prerequisites for carrying forward balance sheet, customer and vendor accounts.
Carrying Forward Profit and Loss Accounts in SAP
Profit and loss accounts are carried forward to retained earnings accounts and there after the balances are set to Zero. Additional account assignments are not transferred. Transaction currencies are no longer applicable and the profit and loss accounts are summarized in local currency.
Prerequisites to carry forward Profit and Loss Accounts in SAP
The following prerequisites must be fulfilled to carry forward balance in SAP for profit and loss accounts:
- Specify a profit and loss account type in the master record of every profit and loss account. This is a key, under which you define a retained earnings account for each chart of accounts.
- You must define your retained earnings account in SAP.
For retained earning account in SAP you can make the settings in Customizing under Financial Accounting > General Ledger Accounting > Business Transactions > Closing > Carrying Forward > Define Retained Earnings Account
You can make the settings for the Special Purpose Ledger in Customizing for Financial Accounting under Special Purpose Ledger > Periodic Processing > Balance Carry Forward > Retained Earnings Accounts > Maintain Local/Global Retained Earnings Accounts.
Most companies use only one retained earnings account. If you use the profit and loss account type, you can use more than one retained earnings account. This might be useful for example, for international corporations that have to meet various requirements when producing the profit and loss statement. For more information, see Special Features of Profit and Loss Statements