Define Retained Earnings Account in SAP FI

 Retained Earnings


While creating the expense accounts and income  accounts we have to specify the  profit and loss accounts accounts type.For which it is compulsory to create one retained earning accounts .We can create any number of profit and loss accounts types for example operating profit and loss accounts to know the operating profit similarly we can create non-operating profit and loss accounts.At the end of financial year these profit and loss accounts are taken to the balance sheets.

Retained earning accounts use to carry forward the balance from one Fiscal Year to next fiscal year .You can a Retained earning accounts to each profit and loss accounts in charts of accounts.With the balance carry forward the proftit and loss accounts are carry forward to to retain earning accounts in the balance sheet.

Retained earning accounts is part of Profit and loss accounts when company earned some profit they carry some part of profit to retained earning account so that can be use according to organisation need.

Retained earning = Net income – dividend (dividend distributed to shareholders)

Net Income = total revenue – total income

 

Path for RETAINED Earning in SAP FI


Step 1

There are two ways to define a Retained Earnings Account. You can either use the T-code OB53 or by T-code SPRO. Go to SAP Reference IMG → Financial Accounting → General Ledger Accounting → G/L Accounts → Preparations → Define Retained Earnings Account → Execute.

retained earning in SAP
retained earning in SAP

Step 2


Enter the Chart of Accounts to define the Retained Earning Account for COA and press Enter.

chart of account in retained earning SAP
chart of account in retained earning SAP

Step 3


Now create retained earning accounts

Step 4


Click on Save button before further proceeding

request number is generated in SAP FI

Assign company code to Retain earning Accounts


Step 5

There are two ways to define a Retained Earnings Account. You can either use the T-code OB53 or by T-code SPRO. Go to SAP Reference IMG → Financial Accounting → General Ledger Accounting → G/L Accounts → Preparations → Assign Company code to chart of accounts

assign chart of accounts to company code

Step 6


Search for chart of accounts for which retained earning accounts to be maintain

search company code

Step 7


assign chart of accounts to company code

company code and retain earning assign

 

 

 

 

 

 

Step 9


save the process request will be generated

request number is generated in SAP FI

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