When you run Create Balance Sheet Closing Journals, journal entries are created to reverse debits and credits of ending year-to-date actual balances for the period you want to close. The balance, which is the net of the reversed asset and liability accounts, is transferred to the closing account you specify.
Note: Your balance sheet should be balanced if you completed the Close Process: Create Income Statement Closing Journals to update the retained earnings account. If the range of balance sheet accounts is balanced, then there is no transfer of balances.
Before running this program, review the following activities for the ledgers you plan to close.
If you use reporting currencies (journal or subledger level), review the following activities for the reporting currencies you plan to close.
Create an accounting calendar that includes two adjusting periods: one for the last day of the fiscal year you are closing, and one for the first day of the new fiscal year. This does not affect account balances in periods used for reporting.
Post any adjustment entries to the appropriate periods.
Print General Ledger accounting and analysis reports.
Ensure the period you are closing is an Open period.
Run the close process, Create Balance Sheet Closing Journals in the last adjusting period of the fiscal year you want to close for your ledger or ledger set.
Note: If you want to run the close process for your primary ledger and the associated secondary ledgers simultaneously, create a ledger set that contains all of the ledgers . Then run the close process for the ledger set so that they can all be processed from a single submission.
Post the balance sheet closing journals to zero-out balance sheet account balances.
Note: Should you need to make adjustments for your ledger after their balance sheet closing journals are posted, reverse and post the original closing entries, make your adjustments, then rerun the closing process to capture the new adjustments for that ledger .
In the first adjusting period of the new fiscal year, reverse the balance sheet closing journals to repopulate the balance sheet accounts.
Post the generated reversing journals.
The journal entry that closes the balance sheet has the following attributes:
Only actual balance types are closed out. Budget or encumbrance balances are ignored.
The effective date of your closing entries is the last day of the period you select in the Parameters window, typically an adjusting period representing the last day of the fiscal year.
General Ledger automatically creates a separate journal batch for each ledger in a ledger set if the closing program is submitted for that ledger set.
General Ledger automatically creates a separate closing account for each balancing segment if you specify an account range that includes multiple balancing segments.
Closing journals are marked for reversal in the period following the period the closing journals were generated. To change the reversal method default, see Changing The Default Reversal Method, below.
General Ledger closes the ledger currency balances only. Foreign currency balances are ignored.
Choose the reversal method you want to use in the Journal Reversal Criteria window before you run the Create Balance Sheet Closing Journals process.
OR
After you run the Create Balance Sheet Closing Journals process, navigate to the Journal Entry window, query your generated journals and change the reversal method.
Additional Information:
Journal and Subledger Transaction Level Reporting Currencies: You need to run the Create Balance Sheet Closing Journals program separately for the ledger, and for each of the reporting currencies (journal or subledger level). However, you can run the program simultaneously for a ledger and its associated reporting currencies (journal or subledger level) by grouping them together in a ledger set and running the program for the ledger set. This results in a journal batch for each ledger and for each reporting currency (journal or subledger level ) and entered currency. You need to post your generated closing journals separately as well.
Average Balance Ledgers: The Create Balance Sheet Closing Journals program creates journal entries for standard account balances for ledgers with average balancing enabled. Companies using average balance processing should create an accounting calendar with two adjusting periods at the end of the fiscal year you want to close. The first adjusting period, representing the last day of the fiscal year, is used to generate the Closing Journals program. The second adjusting period, also representing the last day of the fiscal year, is used to reverse the closing journal. This ensures that average balance calculation is unaffected.
Navigate to the Submit Request window.
Choose to Submit a Single Request.
The Submit Request window appears.
In the Request Name field, select Close Process: Create Balance Sheet Closing Journals program.
Complete the following parameters:
Ledger/ Ledger Set: Enter a ledger or ledger set. If your data access set has a default ledger and you have full access to the default ledger, this ledger is defaulted. You can only select from ledgers or ledger sets where you have read and write access to the entire ledger through the responsibility's data access set.
If you use reporting currencies (journal or subledger level), you can enter a reporting currency in the Ledger/Ledger Set field.
Period: General Ledger defaults with the latest open period when a ledger is specified. You can only select from periods that are open for your ledger or ledger set. Typically, you specify an adjustment period that represents the last day of your fiscal year.
Account From: Enter the starting account range.
Account To Range: Enter the ending account range. The range can span multiple balancing segments and include your entire chart of accounts listing. General Ledger only extracts balance sheet account balances within the range you specify.
Closing Account: You must specify a balance sheet closing account. If you are closing multiple balancing segments, General Ledger creates a separate closing account for each balancing segment.
Category: Balance Sheet Close appears automatically in this field.
Note: If the balance sheet closing account is within the range you specified, General Ledger ignores this account when extracting balances.
Choose OK to close the Parameters window.
Submit the program.
The process generates journal entries that you can view in the Enter Journals and Post Journals windows. The journal source, Closing Journals, and the journal category, Balance Sheet Close, are assigned to this closing journal. You can specify different names in the Journal Sources and Journal Categories windows.
When the program is submitted for a single ledger, a single request is submitted and a single journal batch is created.
When the program is submitted for a ledger set, a parent request is submitted and a child request is submitted for every ledger in the ledger set. A journal batch is created for every ledger and entered currency. You may review the Ledger Set Submission report of the parent request to see what ledgers or reporting currencies (journal or subledger-level) were submitted or not submitted.
If you use reporting currencies (journal or subledger level), and you submit the program for a reporting currency or a ledger set that includes reporting currencies, a separate request is submitted for every reporting currency and a journal batch is created for every reporting currency.
Post the generated closing journals to update balances before closing the period.
If you do not need to close your balance sheet, you can close the current period and open the new fiscal year.
Navigate to the Open and Close period window.
General Ledger displays the Latest Open accounting period.
Change the Latest Open accounting period if necessary to close the last period of the year.
Choose the Open Next Period button to open the new year or you can alternatively run the Open Period program from the Submit Request window to open periods.
The Open Period program automatically transfers the Y-T-D income statement balances to Retained Earnings.
Navigate to the Enter Journals window.
Query the Balance Sheet closing journals you generated at the end of the year.
Reverse the closing journals in the first period of the new fiscal year.
Post the generated reversing journals.
The Open Period program automatically opens beginning account balances for your balance sheet accounts.