Define Retained Earnings Account in SAP

This tutorial guides you on how to define retained earnings accounts in SAP FI.

Retained Earning Account:– Account balances are carried forwarded from one fiscal year to the next fiscal year by using the SAP standard carry the forward program. Retained earnings account is assigned to each P&L account by specifying a P&L statement account type in the chart of accounts (COA). Each Profit & Loss account is assigned to a Retained Earnings Accounts by key

To automatically carry forward the balance by the system to the retained earnings accounts, you can define one or more P&L statement account types per COA and assign them to retained earnings account.

Retained Earning Account configuration steps:

  • T Code for define retained earning account:- OB53
  • IMG Menu Path :- IMG > IMG –> Financial Accounting –> General Ledger Accounting –> GL Accounts –> Master Data–> Preparations –> Define Retained Earnings Account

Step 1:-

Enter Transaction Code SPRO in the SAP command field and press enter

spro5

 

Step 2:- Select SAP Reference IMG

sapfi1

 Step 3:- Follow the IMG menu path to define retained earnings account

How to Define Retained Earnings Account SAP path

Step 4:-

Next, Enter the Chart of Accounts key that you want to define retained earning account for COA and press enter

How to Define Retained Earnings Account SAP

Step 5:-

Update the following data  and press enter

P&L Statement acct type:- X

Account:-  Enter account 120000

How to Define Retained Earnings Account SAP

 

We get a warning message account 120000 not created in the chart of accounts ADAR

How to Define Retained Earnings Account SAP

 

Step 6:- Ignore the warning the message press enter. Press enter once again and save the configured retained earnings account.

Thus Retained Earnings Account is successfully configured in SAP.