Lesson 5 of 6
Year-end
7 min
Year-end is a month-end with three extra jobs: carry the balances into the new fiscal year, move the profit or loss for the year into equity, and keep the old year open just long enough for audit adjustments. In SAP S/4HANA the last two are handled by the same program and by the special periods of the fiscal year variant.
- Early DecemberOpen period 01 of the new yearSo January postings can start on January 1
- January 2Balance carryforward, first runOpening balances exist in the new year
- January 3-10December close and special period 13Accruals, valuation, reclassification in period 13
- January to FebruaryAudit adjustments in periods 14-15Each rerun of carryforward picks them up
- After audit sign-offClose all periods of the old yearFinal carryforward and lock
Special periods
A fiscal year variant can have up to 16 periods: 12 normal ones and up to four special periods. Postings in period 12, 13, 14 or 15 all carry a December posting date; the period number is entered (or derived) separately. Companies use special periods to separate audit and closing adjustments from regular December business, so the trial balance can show "December before adjustments" and "after adjustments." In the posting period variant, special periods are opened and closed on their own line, so you can lock December for normal posting while period 13 is still open for the close team.
Balance carryforward
The balance carryforward program (FAGLGVTR, also available as an app in Fiori launchpad) runs at the start of the new fiscal year, for each ledger. What it does depends on the account type:
| Account type | Carryforward result | Account assignments |
|---|---|---|
| Balance sheet G/L accounts | Closing balance becomes opening balance on the same account | Carried with their assignments, such as profit center and segment |
| P&L accounts | Balance moves to the retained earnings account; P&L accounts start the year at zero | Assignments may not carry to retained earnings unless configured |
| Customer and supplier accounts | Balances carried forward; run with the leading ledger or separately | Per customer or supplier |
| Asset accounts | Fiscal year change in Asset Accounting, after G/L carryforward | Per asset and depreciation area |
The retained earnings account is assigned through a P&L statement account type on each P&L account, defined in Customizing under the G/L account preparations step Define Retained Earnings Account. Most companies have one; some use several, for example to keep certain results apart. The balance carryforward is not a posting in the normal sense: it writes the opening balance in period 0 of the new year, and you can rerun it as often as needed. Each rerun picks up postings made in the old year since the last run, which is exactly what you want while auditors are still proposing adjustments.
For Asset Accounting, the fiscal year change opens the new year for asset values, and the year-end close for assets locks the old year. Asset carryforward generally depends on a successful G/L carryforward. Close the asset subledger for the old year before you close the G/L, so asset values and G/L balances stay consistent.
- Open new yearPeriod 01 of the new year in the posting period variant
- Carry forward balancesAll ledgers; G/L, customers, suppliers
- Asset fiscal year changeNew year opened in Asset Accounting
- Close December and period 13Valuation, accruals, reclassification
- Rerun carryforwardAfter every late adjustment
- Lock old yearClose special periods; close asset year
What would you do?
On February 12 the auditors propose a USD 18,000 additional warranty provision for Contoso's prior year. Luis asks whether it can still be posted. What is the right approach?
- Special periods hold year-end and audit adjustments with a December posting date.
- Balance carryforward runs per ledger; balance sheet accounts carry over, P&L accounts close to retained earnings.
- Carryforward can and should be rerun after every late adjustment to the old year.
- Run the asset fiscal year change and close the asset year in line with the G/L.
Check your understanding · not graded
Lesson check
1. What happens to P&L account balances at balance carryforward?
2. Why can balance carryforward be rerun?
3. How many special periods can a fiscal year variant have at most?