What happens to the Income Statement accounts when the new fiscal year is opened?
KB Article #:
53431
Summary:
What happens to the Income Statement accounts when the new fiscal year is opened?
Description:
Resolution:
 
When a new fiscal year is opened, Vision closes out the Current Year Retained Earnings account by automatically moving the ending balance of the revenue and expense accounts to the Prior Year Retained Earnings account. This process is automatically done by Vision and no posting log is created.

Current Year Ending Income Statement balance = Income Statement accounts (Revenue & Expenses)
Current Year Ending Income Statement balance is moved to Prior Year Retained Earnings = When the Open New Period utility is run for the new fiscal year.
Current Year Ending Income Statement balance becomes New Year Beginning balance for Prior Year Retained Earnings = Previous Years Retained Earnings account.
 
Notes:
  • The Current Year Retained Earnings account represents the ending balance on the Income Statement and is also known as the Current Year Profit and Loss account. The Current Year Retained Earnings account is the balance of the Current Retained Earnings account that is automatically calculated as Revenue minus Expenses.
  • If a new fiscal year was opened , go back to a period in the previous fiscal year and post anything that affects the Income Statement.  This adjustment would affect the fiscal year.
  • Any postings will affect the period and fiscal year the adjustments were posted in.
  • When changing to the most current Fiscal Year, the adjustments made in the previous fiscal year will affect the Previous Years Retained Earnings account balance automatically.

 

 
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