When will we use 2 types of Retained Earnings account and purpose???

Dear Friends,
In which situation we will use 2 Types of Retained Earnings Accounts and may i know the purpose of it??
regards,
shashi kanth.

Dear Friends thank u for u r valuble responces.
Points have been assigned to both of u.
If u could ans for following queries i will be clear on this topic.
See Client Requirment:
PROFIT BEFORE TAX (A - B)                 1000
Less : Provision For Taxation
             Current Years Taxation                 200
             Deferred Tax Assets                (50)
             Fringe Benefit Tax                 20
PROFIT AFTER TAX                 830
Soo Upto Profit Before tax its fine no problem.
Profit after Tax ..How to Show this amount in Balance Sheet ....
clarify me..
bye
shashi kanth

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What is Retained Earnings account and P&L Type

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What is Retained Earnings Account, how the transactions are updated to this account and what is P&L statement Type.In which case we create multiple REA and P&L Statement type. Please Explain me.
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Abhi

Retained earning account is used to profit or loss from P&L satement accounts.
Each P&L account is assigned to a retained earnings account via a key and this how transactions are updated in RE account.
We use different retained earnings accounts in an international corporate group to meet various requirements for preparing financial statements.Chk the link
http://help.sap.com/erp2005_ehp_01/helpdata/en/c7/a88d2243dd11d182b30000e829fbfe/frameset.htm
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Hi Rupa,
Thanks for your reply,
Sorry for inconvience, actually my query is as follow.
We have single ledger with multiple balancing segements , we will enter multiple transactions for each balancing segment values. but we can assign only one balancing segment at ledger level how system will create other balancing segment retained earnings account , and how it will get effect.
Ex:- Balancing segments (1, 2, 3, 4, 5) we will assign only "1" at ledger level. later we entered transanctions for "2" , "3" vis versa, how system will generate retaned earnings account combination for "2" , "3" . based on what functionality it is working .
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2 retained earnings account to be maintained

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Our client requirement is we have to maintain 2 retained earning account one is for Previous year retained earnings account and another is for current year.
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and how the value will flow from the current retained earnings account to previous year retained account

Hello,
Retained earnings account is balance sheet account. At the closing of fiscal year, we need to carry forward balances of P&L accounts to retained earnings account. We have to create Retained earnings account at IMG level. Profit or Loss is carried forward to this account at the end of the year. Normally, companies use one retained earnings account. For this reason, X can be used as the key. In the chart of accounts you enter X in the P+L statement account type field. If you want you can use more than one REA in ur co code.
Have you done any time year end closing functionally?
What we will be doing is drawing the "P & L account" transferring all balances in Rev & Exp to "P & L acc".
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Why do we need more than one retained earnings accounts & what is the use?

Hi FI Experts,
Why do we need more than one retained earnings accounts, what is the precise use of two?
I know the retained earnings account is used to carry forward the balances during the year end to the balance sheet and there by making the p&L A/cs balances as zero.
I guess the second one is used for different valueations for example as depreciation accounts for different valuations will have different retained earnings accounts.
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with regards
Ramesh Y

Hi,
Well, separate retained earnings accounts are used for parallel financial reporting, it means when you need to report in accordance with, for example, local GAAP and IFRS or US GAAP at the same time. Several retained earnings accounts are necessary when the company chooses account based approach for parallel reporting. (GL accounts are broken down into several groups, for example you use different accounts for IFRS valuation, for local GAAP and they are also shared accounts common for both principles.)
m.

Retained Earnings account type

Hi guys,
While creating a retained earnings account, we have a field called P&L statement account type which is given as X or Y. What is the meaning of this?
Do we assign this X or Y somewhere to the Pand L account.
Thanks
srik.

HI,
With the P&L statement account type, you determine the retained earnings account for each P&L account. The retained earnings account is used during year-end closing to calculate the company's result.
If you are creating a P&L account, you must make an entry here.
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What is the using of retained earnings account

HI
In the above , please reply the answer as early as possible
with regards
srinivas

this question is poste in wronf foroum it sould be in FI not in MM
from www.investopedia.com
retained earnings account
The percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders' equity on the balance sheet.
The formula calculates retained earnings by adding net income to (or subtracting any net losses from) beginning retained earnings and subtracting any dividends paid to shareholders:
Also known as the "retention ratio" or "retained surplus".
In most cases, companies retain their earnings in order to invest them into areas where the company can create growth opportunities, such as buying new machinery or spending the money on more research and development.
Should a net loss be greater than beginning retained earnings, retained earnings can become negative, creating a deficit.
The retained earnings general ledger account is adjusted every time a journal entry is made to an income or expense account.
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Retained earnings account

Hi,
Can we maintain retained earnings accounts as open item management account?
our client has changed the status to Open item management account recently, due to this reason he is unable to do year ending carryforward through F.16. They are getting error analsys that change the status to without open item management.
treat this issue on priority ...
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Hello Prasad,
Retained earnings account is balance sheet account. At the closing of fiscal year, we need to carry forward balances of P&L accounts to retained earnings account. We have to create Retained earnings account at IMG level. Profit or Loss is carried forward to this account at the end of the year. Normally, companies use one retained earnings account. For this reason, X can be used as the key. In the chart of accounts you enter X in the P+L statement account type field.
Have you done any time year end closing functionally?
What we will be doing is drawing the "P & L account" transferring all balances in Rev & Exp to "P & L acc".
This P & L account in SAP is widely called as retained earnings account. At the end of the period, all your Rev & Exp are posted to this account which is a Balance sheet Item. This you are identifying as Retained earnings account type X and assigning a GL account. When you create this as a GL account system understands that this is Retained earnings account.
Profits of the organization are always Liability. Losses are Assets. As profits form part of "share holders funds".
You assign this retained earnings account in your financial statement version in such a way if the balance is credit in the liability side and if the balance id Dr then asset side
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Para

Retained earnings account- differences between F.01, FS10N, FBL3N

Hi Sap Gurus
Maybe someone can help me. When Iu2019m trying to control the amounts for the retained earnings account comparing the FS10N, FS10N drilldown, FBL3N, and F.01 they give me all different values.
I understand that the differences between the FS10N and FBL3N can be related to the carryfowrd process.
But, okey. Why when Iu2019m double click on the FS10N report the system shows a different value from the FBL3N? Another problem is when I compare the amount from FS10N and F.01 for the same retained earnings account, the system show complete different values, how I can verify the amounts for control and audit process?
Regards
Gabriela

I cannot speak on F.01 but between FS10N and FBL3N and FS10N drill down, they should equal in grand total. Keep in mind that FS10N GL Account balance display is based on one fiscal year display but the cumulative balance should be all activity from day 1 that has been carried forward.
Try running FS10N for the last fiscal year possible. If carryforward for the retained earnings accounts have been performed for each year, then the ending figure in the cumulative balance column will equal the same total ending balance you get when you execute FBL3N GL Line item display for the same retained earnings account (providing you select "All items" and don't include in posting date restrictions or any others on the selection screen).
Using FS10N for each fiscal year, you can check to to see if the beginning cumulative balance is the same as the previous years ending cumulative balance. If not then they may be a carryforward issue.

FS10N Opening balance difference (Retained Earnings Account)

Hi,
We are getting opeing balance difference in FS10N balances from 2007 to 2008 (retained earnings accounts)
1. We have carry forward the 2007 balances to 2008 through T.Code : F.16
2. We are getting difference in 4 company codes.
3. But there is no difference in T.Code: FBL3N
Company      2008                            2007
1000     20,457,623.98     20,635,622.78
Difference     =     177,998.80
1001     49,091,242.21     48,913,243.41
Difference     =     177,998.80
1002     394,867,485.91-     396,028,401.55-
Difference     =1160915.64
1003     2,556,851.66-     1,395,936.02-
Difference     =1160915.64
Can you please let us know why this difference is comming ?
Thanks
Madhusudan

If you are using ECC use T. code FAGLGVTR - Balance Carryforward (New)
F.07 - Balance Carryforward for Vendor/customers
then only it shows the correct picture.
when FBL5N is line item report it is no way relavent to balance carry.
this may solve your problem
assign points if it help

P&L acc should not hit retained earnings account upon exe Bal Carry Forwar

Hi Friends,
As per business requirement I created two Depreciation expense accounts, only Book Dep account should hit retained earnings whereas other special dep account should not hit. Since both accounts are P&L they are picking upon executing Balance carry forwad.
Special Dep area is created to depreciate the complete asset in the year of purchase to help the org to allocate it to different Cost centers for funding request. As such these special dep accounts are out of scope for FSV so there is no impact on Bal Sheet,however upon exec FAGLGVTR full dep posted on these accounts are carried forward to next year along with true dep.
Please provide any suggestions that help to avoid some of the PL acc carry forard to retained earnings account. I am thinking of creating separate chart of account for these accounts but this consume lot of time for testing all the scenarios.
Thanks in advance.
Venkat

Hi Madhu,
Here is the scenario.
APC of all acquisitions are allocated, in the year of acquisition, among several cost centers using statistical key figure (Work hours). To satisfy this requirement, a second depreciation area (Special) will be created. In the second depreciation area, all assets (regardless of asset class) will be depreciated fully in the year (month) of acquisition u2013 (the same depreciation key as low value asset). The value in the second depreciation area will flow to controlling.
This full depreciation is not even consider in financial reporting as the number range of these dep exp accounts are out of range in FSV. The main purpose is to allocate full depreciation among CC in advance for funding request.
Thank you,
With Regards,
Venkat
Edited by: Venkat Reddy Yedulla on Jun 7, 2010 6:22 PM

When will we use 2 types of Retained Earnings account and purpose???

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