Overview of Closing Journals

Many organizations follow specific procedures to generate special journal entries to close and open fiscal years.

Optionally run one or both of these closing processes to create one of two types of closing journals that move forward year-end and other closing period-end balances.

• Create Income Statement Closing Journals: Posts all of the income statement account balances to one or more retained earnings accounts.

• Create Balance Sheet Closing Journals: Posts all asset, liability, and equity balances to one or more closing accounts.

Note: Both processes automatically create a separate closing or retained earnings account for each balancing segment value, Primary, Second and Third Balancing segments.

Closing journals:

• Address global audit and statutory reporting requirements for Greece, Italy, Portugal, Spain, Colombia, Mexico, and other countries.

• Provide auditable journals for the United States and other countries.

Caution: If you use secondary ledgers or reporting currencies, you must define a journal conversion rule to prevent replication of your year-end closing journals from your primary ledger. Replication can cause unbalanced journal entries if different currencies and conversion rates are used in the ledgers. Instead, run your closing journal processes directly in your reporting or secondary ledgers to ensure that the balances are reduced to zero.