How to Define Retained Earnings Account in SAP

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

Step 2:- Select SAP Reference IMG

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

Step 4:-

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

Step 5:-

Update the following data  and press enter

P&L Statement acct type:- X

Account:-  Enter account 120000

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

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.