In this topic, we described about the below sections -
Retained Earnings account defines to be used for posting the expenditure and income of the year. It is used to carry forward the balance from the current fiscal year to next fiscal year. The balance of Retained Earnings account appears as reserves and surplus in the Balance Sheet for the year.
Retained Earnings Account assigns to each P&L account in chart of accounts. P&L statements definition as per chart of accounts required to automatically carry forward the balance to the next fiscal year and assign them to the retained earning accounts.
Create Retained Earnings Account: -
Below process is to define retained earnings account for char of Account TCOA.
Step-1: Enter the transaction code OB53 in the SAP command field and click Enter to continue.
Enter the transaction code SPRO in the SAP command field and click Enter to continue.
Click on SAP Reference IMG.
Expand SAP Customizing Implementation Guide → Financial Accounting → General Ledger Accounting → G/L Accounts → Master Data → Preparations → Define Retained Earnings Account. Click on Execute.
Step-2: In the next screen, Enter the Chart of Accounts to maintain the Retained Earnings Account. Click on the right mark.
Step-3: In the next screen, New Entries icon from the Application Menu.
Step-4: Enter the below information.
- P&L statement account type
- G/L Account which will be considered as Retained Earnings account
Step-5: Click on Save button to save the details before proceeding with other changes.
Step-6: It prompt for the Change Request. Create/Select the change request and Click on right mark to proceed.
Step-7: Click on Postings Key to maintain the posting key for this account by selecting posting key in the Application Menu.
Step-8: Next screen, assign posting key for Debit and Credit.
Step-9: Click on Accounts button to go back to the accounts screen.
Step-10: Click on Save and Status bar displays the below message once the Retained Earnings Account saved successfully.
Technical Information: -
- Transaction Code: - OB53
- Navigation path: - SPRO → SAP Reference IMG → SAP Customizing Implementation Guide → Financial Accounting → General Ledger Accounting → G/L Accounts → Master Data → Preparations → Define Retained Earnings Account