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Create Retained Earnings Account

What is Retained Earnings Account?

Retained Earnings Account is a type of account that is used to carry forward the balance of one financial year to the next fiscal year. It is defined in SAP Fi using t-code OB53.

Retained Earnings Account is used to maintain the G/L number in which the system will transfer the P/L amount at the end of the fiscal year when the user runs the balance carry forward activity.

It can be assigned to every P/L account in the Chart of Account (CoA) to automatically carry forward the balance to the next fiscal year.

Define Retained Earnings Account

Please follow type step by step process shown below to define retained earnings account:

Step-1: Execute t-code OB53 in the SAP command field

OB53

(OR)

Execute t-code SPRO in the SAP command field

SPRO

Next click on the SAP Reference IMG.

SAP Reference IMG

Now go to the following SAP menu path:

Financial Accounting → General Ledger Accounting → G/L Accounts → Master Data → Preparations → Define Retained Earnings Account.

SAP IMG Path

Step-2: Now enter the CoA to maintain the Retained Earnings Account and then press Enter to proceed further.

COA

Step-3: Next click the New Entries button to create a new retained earning account.

new Enteries

Step-4: Enter the following details:

  • Enter P&L statement account type
  • Enter G/L Account to be considered Retained Earnings account

Plant and statement

Step-5: Once all the required details are filled click the Save button

Save

Step-6: Next select your Customizing Request and press Enter to proceed

Customization Request

Step-7: Now click the Postings Key to maintain the posting key for this account.

Posting Key

Step-8: Then assign posting key for Debit and Credit.

Debit Credit

Step-9: Next click the Accounts button to go back to the accounts screen.

Account

Step-10: Again click the Save button to save the Retained Earnings Account account.

Data saved