Retained Earnings - changed prior to balance carryforward

[Former Member]

Hi Experts,

Great day!

I just would like to inquire about the possible causes of changes in Retained Earnings (RE) in a single year without running the balance carry forward yet or without any posting happened on the GL account of RE during the same year.

For example, in 2013 I had $4,290 of RE and running a balance carry-forward, the beginning balance for 2014 is now $4,500. But during September of 2014, I noticed that my RE is now $4,700. Take note that I haven't done any direct posting to its GL account nor I have executed the balance carry forward functionality.

What are the possible causes of the $200 movement in RE?

Thank you for your future help!

Sincerely,

DJ

[Former Member]

Hi Dryan,

Normally, the opening balance of the retained earnings changes whenever there are P&L account movements in the previous year(s). This happens automatically, once the initial carryover was done into that year.

To check if it is correct, I would suggest that you take the closing balance of the retained earnings in the previous year, add to it the total movements of all P&L accounts that point to it (for the last year as well) and compare it with the opening balance of the retained earnings this year. Normally, these should equal and if you can see a change then it is due to postings in the old period(s).

Try this - and let us know if you still have questions!

[Former Member]

Hi Jan,

Thank you for taking time to reply on my post.

I believe your point above is the normal behavior of Retained Earnings.

I would like to ask, though, that without executing the normal balance carry forward in previous year or next year, what are the possible causes of changes in Retained Earnings aside from posting directly to its GL.

Again, thank you!

DJ

[former_member198650]

Hi Dryan,

When initial upload of the legacy data in SAP, in that case we manually do postings for profit/loss to the retained earnings a/c. Later years  system will carry forward the results to this account.

Regards,

Mukthar

[Former Member]

Hello Dryan,

In the above post Jan is saying  that users have made some P&L posting after audit in special periods or periods in closed fiscal year and hence the RE account balance has changed.

According to Jan "This happens automatically, once the initial carryover was done into that year."

I am not sure whether automatic update on RE account should update.

Can you pls check if the balance of P&L accounts for 2013 is matching with new RE balance. If that is the case your RE account balance is reflecting correctly and the above statement from Jan is correct.

Regards,

Ritesh

[Former Member]

I have found what Jan said is correct in our test client.