GL Acc. Balance not equal to total line items

[Former Member]

Hi experts;

     I have a common issue where I found many threads are talking about it but neither of them has SOLVED status and I followed most of recommendations but the problem is yet existing.

The issue is:

when we display the balance on F.08 for the retained earning account (which is Bal. Sheet Acc.) for the year 2014 it gives 30,390,288.69 Cr.

when we go to FBL3N for detailed line items selecting same account, All line items option, setting the Date From empty till Date To 31.12.2014 in order to show all line items it gives another reading 23,632,888.89 Dr.

Then, I found a recommendation from one old thread to use FAGLL03 but again it gives same reading like FBL3N which is 23,632,888.89 Dr.

Then checked the FS10N it gives total balance for last period like the F.08 which is 30,390,288.69 Cr.

N.B:

- No archiving has been done.

- Balance Carry Forward has been done.

Kindly if someone can help and guide me for explaining that mysterious readings where the matter is too important to submit such line items for external auditor.

Thanks in advance;

Kind regards;

Ahmad Mahmud;

[Former Member · Accepted solution]

Hi Ahmed

you need not to be worry.. the correct balance is appearing on S_ALR_87012277 - G/L Account Balances.. which display the Trail Balance as needed by external auditors.. Retain Earnings account has special characters in SAP.. FBL3N is showing the line items posted to this GL , so in case of RE account only transaction appeared is the transaction posted by accounting staff .. to make sure that all things goes Ok.

check the balance of lase year RE ( for Example 2013 )     XXXXX

add the FBL3N Movement in 2014                                     XXXXX

Add Year Profit 2014                                                       XXXXX

this should give the right balance you will see at report i gave you above..

Regards

Mahmoud El Nady

[Former Member · Accepted solution]

SA Mahmud;

     it sounds to me very god analysis and that so far is matching with what is existing.

However;

I wanna make sure of important point which is:

Does the SAP creates an entry when we run the Balance Carry Forward? or it just update amounts with out entries?

In case if it generates an entry, do you think that we need to set any proper configuration to du such task or should I run any t-code to carry out such entry?

Thank you very much Mahmud and it is from my pleasure to discuss such issues with you

Kind regards;

Ahmad Mahmud;

[afroz_ahmed4 · Accepted solution]

Hi Ahmed,

Once you will do the balance carry forwward, system will show all the accumulated balance till date in F.08.

It seems that the Balance you are referring to in FBL3N are the Balance for your retained GL which has not been carried forward till date i.e previous year GL Balance.

The Analysis which Mahmoud is referring to also sounds good. please check.

Regards,

Afroz

[Former Member · Accepted solution]

Hi Ahmed

thanks for your reply.. as far as my knowledge that when you carried forward the balance at the year ends SAP does not post actual entry .. its just close Rev. Vs. Exp. and post the balance to RE in backgroud.. so you see them in TB ..

Regards

Mahmoud El Nady

[Former Member · Accepted solution]

thank you very much Mahmud.

what you have said is exactly what SAP said about the RE account.

Behaviour of Retained Earnings GL Account in relation to the Balance Carry Forward - ERP Financials ...

[Former Member]

Hi Ahmad,

To answer your question, let me briefly explain you how retained earnings work in standard SAP.

Each P&L account is assigned to one retained earnings account. The options are defined in config. transaction OB53, and within each P&L account, there is a field "P&L statement account type" (SKA1-GVTYP) specifying which retained earnings account is linked to it.

When you run balance carryforward (trans. F.16 with old GL or FAGLGVTR in the new GL), then the sum of movements of P&L accounts for a given year transfers to the opening balance(s) of respective retained earnings account(s) in the next year. No line items are posted with this step. So, it will look e.g. like this (assuming we only have the following three accounts in the company code):

Year 2013:

P&L acct 1: Opening balance: 0, Sum of movements: 1000 Cr, Closing balance: 1000 Cr.

P&L acct 2: Opening balance: 0, Sum of movements: 700 Dr, Closing balance: 700 Dr.

Retained earnings (linked to the above): Opening: 2000 Cr., movements: 1500 Dr., Closing 500 Cr.

Year 2014 - after balance carryforward:

P&L acct 1: Opening balance: 0 (because P&L accounts always start a year with zero)

P&L acct 2: Opening balance: 0 (same as above)

Retained earnings: Opening balance: 800 Cr. (closing balance of 500 Cr. plus sum of related P&L accounts of 300 Cr.), but you only have line items for the 1500 Dr. that you posted during the previous year

A similar thing is happening in your system:

- Line items of a retained earnings account will never match its balance. By definition, the opening balance of a r.e. acct in a given year equals the closing balance of the same account in the previous year plus the closing balances of all P&L accounts that point to it through the SKA1-GVTYP field. There are no line items for the second part (the P&L of the year) on the r.e. account itself - only on the P&L accounts.

- So, to prove the numbers to yourself and your auditor, I would suggest you to calculate a sum of P&L accounts for 2013 that point to your selected retained earnings account, and then add this amount to the closing balance of that account for 2013. This total should match with the opening balance of the retained earnings in 2014. If it does not, then there is an error in balance carryforward or in your calculation. But if it does then everything works as designed - and you will not see any items behind this balance change because they are on the P&L accounts. (Similarly, if you run FBL3N or FAGLL03 for a P&L account with an unlimited period, then your balances will not match with items either - because the balances reset to zero each year but items keep adding up.)

This should answer your question. For completeness, there is also an option in SAP to open and close a year with account postings - see e.g. program RFSUMB00. In that case, you would really see the items on the retained earnings account. However, this should only be used when the law requires it (e.g., in Turkey, Italy, Slovakia etc.) because it makes the closing more cumbersome and rigid. Normally, auditors are reasonable people if you explain them what is going on - and balance carryforward is no black magic.

Hope it was not too long. Let me know if you have any further question!

[Chandra24_]

Thanks so much for the detailed explanation.. it helped me in my analysis