|JD Edwards World General Accounting I Guide
Part Number E21540-03
|PDF · Mobi · ePub|
This chapter contains the topic:
When you close a fiscal year, the system calculates and posts retained earnings, then carries beginning balances forward to the next fiscal year. You should close the Accounts Receivable and the Accounts Payable systems for a company for year-end reconciliations to the general ledger. You should close the General Accounting system so that the system can calculate the retained earnings correctly.
From General Accounting (G09), choose Periodic & Annual Processes
From Periodic & Annual Processes (G0924), choose Close Year
You can close a year as often as needed; only Account Balance records for the next fiscal year will be updated. If the records do not exist, they are created. If the F0902 records already exist, the Balance Forward field will be updated as necessary.
For example, you can:
Close the year immediately to move the financial reporting period forward, then close the year again after you enter audit adjustments
Close the fiscal year at any time during the year to update inception-to-date amounts for reporting purposes
When you close a fiscal year, the system produces an annual close report that lists the company closed, and the retained earnings account and amount. Use this report to verify that a company closed successfully.
Optionally, you can print a detailed list of the accounts and balance amounts that are used in the retained earnings calculation. This is useful if you need to research potential problems or an incorrect retained earnings amount.
If any errors prevent a company from closing, the errors are listed on the annual close report. The following are examples of errors and solutions.
|Retained earnings account not set up in the Account Master||Set up the retained earnings account used by AAI item GLG4.|
|Close program could not find AAI item GLG6||Set up AAI item GLG6 in automatic accounting instructions (AAIs).|
If AAI item GLG12 is not set up, an error message does not appear on the annual close report. The system uses account 999999.99999999 as the default.
Verify that your AAIs and ledger types are set up correctly.
Verify that all the transactions have been posted.
|Length of detailed list||The detailed list for retained earnings can be lengthy. JD Edwards World recommends that you do not print it unless you need to research your retained earnings calculation.|
|Closing multiple companies to one object account||You can close more than one company to a single retained earnings account. This is necessary if corporate divisions are set up as companies. You would close these divisions to a single retained earnings account to consolidate reporting for the legal corporate entity.|
|Intercompany settlements||After closing, you might need to create journal entries for intercompany settlements to keep the companies in balance. The Close Year program posts retained earnings to a retained earnings account for a single company, but does not create automatic entries for intercompany settlements.|
|Running the Annual Close||Run the Annual Close at a time when users are not accessing the F0902 balance file. If other programs are running that update the F0902 file, it could cause records to be skipped during the calculation of Retained Earnings.|
Closing a fiscal year involves a number of internal steps in addition to running the Close Year program. The following is a generic checklist of procedures. You should develop your own procedures to perform before and after running this program.
Review and post all batches.
Close the current accounting period. Optionally, you can close the current accounting period when you change the year-end period.
Enter and post your audit adjustments. Many companies reserve an accounting period for audit adjustments.
You can make audit adjustments without changing the current period back to the prior year ending period. To do this, create an entry using document type && (prior year transactions). The system generates a warning message, but accepts the transaction. You can use this document type only in the journal entry program.
Run your year-end financial reports, trial balances, and any other reports you require.
Close the fiscal year to calculate retained earnings and create a record in the Account Balances table (F0902) for the new fiscal year.
Change the year-end period. The system does not do this automatically. Change the current accounting period (if you have not already done so) and fiscal year on one of the following:
Close Accounting Period (menu G0924)
Company Numbers and Names (menu G09411)
You cannot change the Data Sequence setup. It is mandatory that you sequence by Fiscal Year, Company and Ledger Type.
Caution:If you change the Data Sequence, you could damage your F0902 file and/or receive unpredictable results.
When selecting data for running the annual close:
Data Selection must include the Fiscal Year field and that a year is specified.
Selections for Company and Ledger Type are optional.
You can only close one year at a time.
Note:If you need to close several fiscal years, then you can create separate versions with the fiscal years specified in each version. Each Annual Close version should not be active in the job queue at the same time.
You should not specify any other data selections
If you are closing multiple companies to the same retained earnings account:
You must have a single DREAM Writer version that selects all companies that are being closed together.
You must have the same fiscal date pattern for companies that are being closed together.
Common errors that occur when you close the fiscal year include:
After running the Annual Close program (P098201); the system is not calculating Retained Earnings for a ledger type.
The Balance Sheet accounts for the particular ledger has the Balance Forward amounts in the Account Balance file (F0902) updated for the new fiscal year and the Retained Earnings account is not updated.
These problems could be due to the following:
|Factor||Description / Resolution|
|Ledger Type Not Set Up in UDC Table||The system calculates Retained Earnings automatically for both the AA and AZ ledger types. If you have additional ledgers for which you are calculating Retained Earnings, it is necessary for you to define these ledgers in one of two User Defined Codes (UDC) tables:
|Special Handling code field is blank||The first (left-most) position of the Special Handling Code field in either UDC 09/LA or 09/LP must be a non-blank value. Populating this field with a non-blank value will signal the Annual Close program to calculate Retained Earnings for a particular ledger type. From either UDC table:
|AAI Not Set Up||AAI item GLG4 defines the Retained Earnings account. If it is not set up, the report produced from the Annual Close will have an error message.|