Understanding Retained Earnings Accounts

AAI item GLG4 defines the retained earnings account for a company. The account must be a posting account that allows system-generated entries. During the general ledger annual close, the system posts retained earnings to the account assigned to AAI item GLG4.

Typically, the business unit and company number for balance sheet accounts is the same. For example, 100 would be the business unit for company 00100. If your companies and business units are set up this way and all companies use the same retained earnings object account, you need to set up only one GLG4 item for company 00000 and assign an object account.

In the following example, the system uses the object account (4980) assigned to GLG4 for company 00000 to post the retained earnings amount. The company number and balance sheet business unit are the same for all companies, as shown in this table:

Company	Business Unit	Retained Earnings Object Account
00100	100	4980
00200	200	4980
00300	300	4980

If your business unit and company number is different for balance sheet accounts, you must set up AAI item GLG4 for each company and specify the balance sheet business unit and object account.

In the following example, the system uses GLG4 for each specific company to post the retained earnings amount. The company number is different from the balance sheet business unit for all companies, as shown in this table:

Company	Business Unit	Retained Earnings Object Account	Company-Specific GLG4
00100	110	4980	00100.110.4980
00200	210	4980	00200.210.4980
00300	310	4980	00300.310.4980

If you have multiple balance sheet business units for one company, you must set up AAI item GLG4 for the company and specify one balance sheet account. Then, for year-end processing, you must allocate all of the balance sheet business units to the balance sheet business unit specified in GLG4 for the company. If you do not do this, your company will be out of balance because the offset amount for net income would reflect the accounts for one balance sheet business unit (specified in GLG4 for the company) and not all balance sheet business units.

In the following example, the system uses GLG4 for each specific company to post the retained earnings amount. The company number is different from the balance sheet business unit for all companies and company 00100 has multiple balance sheet business units, as shown in this table:

Company	Business Unit	Retained Earnings Object Account	Company-Specific GLG4
00100	110 210 310	4980	00100.110.4980
00400	410	4980	00400.410.4980
00500	510	4980	00500.510.4980

Note: GLG4 is the only AAI item for general purpose accounts that you can set up by company. All other general purpose items are set up only for company 00000.