Single Versus Multiple Retained Earnings Account Closings

In either interim or year end closings, General Ledger enables you to close P/L to a single retained earnings account or to multiple retained earnings accounts.

Closing to a Single Retained Earnings Account

When you close to a single retained earnings, you can close all P/L accounts to a single retained earnings account. You can also close the P/L accounts to a single retained earnings account and break the amount down by other ChartFields (for example, Project or Department). This flexibility enables you to track profit and loss more effectively.

All closing rules require the Account ChartField, the Alternate Account ChartField, or both. You can close only these ChartFields, or you can combine the Account ChartField with other ChartFields such as Department, Product, or Project ID. For example, if you want to track department-specific retained earnings, you combine the Account ChartField with the department ChartField. During the closing process, the department totals still close to a single retained earnings account, but the system generates separate ledger entries for each department.

Closing to Multiple Retained Earnings Accounts

When you close to multiple retained earnings, you distribute P/L to multiple retained earnings accounts based on appropriate criteria for the business. For example, you might distribute profit and loss based on specific P/L accounts or based on departments. You close a specific group of ChartField values to a single retained earnings account, but you close other specific groups of ChartField values to other single retained earnings accounts. ChartField value sets facilitate this process.

ChartField value sets enable you to define combined ChartField values that the system uses for source data during the General Ledger closing process. For example, you can create one ChartField value set for the income statement accounts used in interim closing and another set to use in year end closing. When you define closing rules for the interim close or the year end close, you select the appropriate ChartFields value sets.

Here is an example of closing to multiple retained earnings accounts. In this example, P/L accounts 41000 − 410010 and 410015 and 410016 close to retained earnings account 360100, and P/L accounts 410020 − 410029 close to retained earnings account 360200:

P/L Accounts	ChartFields Value Set	Retained Earnings Account
41000 through 410010	CFVS 1	360100
410015 410016	CFVS 1a
410020 through 410029	CFVS 2	360200

You can set up value sets that combine P/L account with the Department ChartField and the Product ChartField, or use whatever combination you need to track profit and loss.