46 Overview to Periodic and Annual Processes

This chapter contains these topics:

46.1 Objectives

  • To understand why you need to run integrity reports

  • To close the current accounting period

  • To change the financial reporting date

  • To close the current fiscal year

46.2 Overview

There are several tasks you should complete as part of your periodic and annual processes. These tasks include:

  • Printing integrity reports

  • Closing an accounting period

  • Changing a financial reporting date

  • Understanding the fiscal year close

  • Closing a fiscal year

In addition to these tasks, your organization should develop its own detailed periodic and annual tasks and include them in your internal documentation.

See Also:

46.2.1 What Happens When You Close an Accounting Period?

When you close an accounting period, the system resets the date it uses for date editing purposes. If you create entries with G/L dates after the current period and the period following it, you receive a warning or hard error such as PACO (Post After Cut Off). If you create entries in an accounting period that is closed, you receive a PBCO (Post Before Cutoff) warning or error.

46.2.2 What Happens When You Close a Fiscal Year?

When you close a fiscal year, the system calculates and updates retained earnings, then carries beginning balances forward to the next fiscal year. You should close the Accounts Receivable, Accounts Payable, and General Accounting systems for a company so that the system can calculate retained earnings correctly. You can close only one year at a time.

When you close a fiscal year, the system:

  • Updates records in the Account Balances table (F0902).

  • Updates information for the next fiscal year.

  • Includes entries that are posted to the retained earnings account in the final retained earnings figure and prints a retained earnings report.

  • Does not set profit and loss accounts to zero. The system retains inception-to-date amounts for these accounts, but shows their balance forward amounts as zeros.

  • Does not change the current accounting period or fiscal year. You must do this manually.

The Close Year program updates the retained earnings account that is assigned to AAI item GLG4. The program also updates balances for each account, as follows:

Account Description
Prior Year-End Net Posting For each account, the program summarizes year-to-date activity for the current fiscal year.
Balance Forward For each account, the program summarizes the balance forward for the current fiscal year and the year-to-date activity for the same year.

On reports and forms, the balance forward amount for profit and loss accounts is zero. The system stores the balance forward for these accounts to use for inception-to-date reporting.

Original/Beginning Budget The original or beginning budget is the balance record of the current fiscal year that the system uses to copy budgets to the balance record of the new year. This copy feature is particularly useful for job costing, in which rolling over budget amounts from one year to the next is common.

46.2.3 Which AAIs Does the System Use?

The system uses the following AAI items when you close a fiscal year:

AAI Description
GLG4 (retained earnings) This defines the G/L account number that contains the retained earnings of each company. If each company closes to a different object account for retained earnings, JD Edwards World recommends that you set up this item for each company.

If you close all companies to the same object account for retained earnings, you can set up a single GLG4 item for company 00000 with a blank business unit. The program uses the company number for the business unit. For example, company 00100 would close to business unit 100.

If you store account balances by currency, the system summarizes the retained earnings account for each currency in the Account Balances table. The Originated In Currency field for retained earnings is blank. Even if item GLG4 is in the range of accounts to include account detail, the system summarizes the amount.

GLG6 (beginning revenue account) This defines the beginning of your range of profit and loss accounts.
GLG12 (ending profit and loss account) This defines the end of your range of profit and loss accounts. If you do not define this AAI, the system uses account 999999.99999999 as the default.

If you close the year, change any of these AAI items, and then rerun the close, you might get different results.

46.2.4 Which Ledger Types Does the System Use?

The system calculates retained earnings for your ledger types based on two user defined codes:

  • 09/LA. Assign ledger types to this user defined code if the ledgers do not need to balance.

  • 09/LP. Assign ledger types to this user defined code if the ledgers must balance.

The system calculates retained earnings for the AA (actual amounts) and AZ (cash basis) ledger types, even if you assign them to one of the user defined code lists.

46.2.5 What Happens with Budgets?

When you close a fiscal year, the system calculates the balance forward for all accounts, including those accounts with budget ledger types. Budget ledgers are typically used for job costing. Because a job might not be finished within a year, you should roll the original budget forward to the next year for the following job cost ledger types:

  • JA (job cost budget amounts)

  • JU (job cost budgeted units)

  • PA (job cost commitments for amounts)

  • PU (job cost commitments for units)

You control how to handle the original budget amount with a processing option and user defined code list (00/LT). The following rules apply to budget ledger types:

  • If you want the system to update budget amounts, you must set up each budget ledger type in user defined code list (00/LT). If you do not set up a ledger type, the system will not roll amounts to the new fiscal year.

  • If next year's record in the Account Balances table already exists, you can use a processing option to control whether the system updates the original budget amount.

  • If next year's record in the Account Balances table does not exist, the system ignores the processing option. Instead, it uses the budget ledger type to determine whether to roll the original budget amount.