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SAP TRAINING MATERIAL SAP TRAINING MATERIAL SAP TRAINING MATERIAL
5.Define Retained Earnings Account in SAP
IMG > Financial Accounting > General Ledger Accounting > G/L Accounts > Master Records > Preparations > Define Retained Earnings Account
You assign a retained earnings account to each P&L account by specifying a P&L statement account type in the chart of accounts area of each P&L account in SAP.
At the end of a fiscal year, the system carries forward the balance of the P&L account to the retained earnings account in SAP. You can define one or more P&L statement account types per chart of accounts and assign them to retained earnings accounts. |
Update chart of accounts YCCA in the given field
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Update the following fields
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Enter X in P& L statmt
Enter the account code for Retained earnings account.
You will get a message “Account not created in chart of accounts YCCA”, ignore it |
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to save entry. |
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This retained earnings account is required to carry on the difference between the local reporting and parent reporting. For example:- As per the local law the depreciation is calculated at 10% Straight line method (works out to 10,000 INR) whereas as per the parent companies reporting the depreciation rate is 15% SLM (works out to 15,000 INR). Thus the depreciation calculated will be different for local and parent. Thus the profit reported will be different and the profit carried forward to the balance sheet will be different.
In SAP we manage this by creating different GL codes.
Example:
The local depreciation is posted to GL code 460001 Depreciation Local 10000 INR
The depreciation for the parent is posted as a difference between local and parent (15,000 INR – 10,000 INR = 5,000 INR) to GL code 460002 Depreciation local – parent 5,000 INR
The GL code 460001 is mapped to retained earnings account X and the GL code 460002 is mapped to retained earnings account Y in SAP.
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