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 Year-End Closing 

Purpose

The year-end closing is an annual balance sheet, an annual profit and loss statement, and an appendix with additional information (annual report), which has to be created to meet the particular legal obligations in each country. Before you can close a fiscal year in Financial Accounting from a bookkeeping perspective, you have to carry out preparatory measures in Asset Accounting.

Process Flow

You use the year-end closing program to close the fiscal year for one or more company codes from an accounting perspective. Once the fiscal year is closed, you can no longer post or change values within Asset Accounting (for example, by recalculating depreciation). The fiscal year that is closed is always the year following the last closed fiscal year. You cannot close the current fiscal year.

(non-calendar fiscal year is not being used)

current fiscal year (current date): March 19xx

last closed fiscal year: 19xx - 2

=> you can close fiscal year 19xx - 1

Background Processing

You have to carry out the year-end closing as background processing for performance reasons. Start the report, therefore, as a background job (in the selection screen for the report: Program

® Exec. in background). You can carry out test runs with fewer than 1000 assets in the foreground.

Updating the Base Insurable Value

The year-end closing also updates the base insurable value. For more information, see

Insurance Values.

Checks

The system only closes a fiscal year in a company code if

  • The system found no errors during the calculation of depreciation (such as, incorrectly defined depreciation keys).
  • Planned depreciation from the automatic posting area has been completely posted to the general ledger.
  • Balances from depreciation areas that are posted periodically have been completely posted to the general ledger.
  • All assets acquired in the fiscal year have already been capitalized.

Since this check does not make sense for assets under construction, you can prevent this check from being made for assets under construction by means of the asset class.

  • All incomplete assets (master records) have been completed.

The system lists any assets that do not meet the above requirements in the log of the year-end closing. The log also shows the reason for the errors.

Reversing the Year-End Closing

If you closed a fiscal year too soon, and still need to make corrections, you can reset the last closed fiscal year in Customizing for Asset Accounting (Periodic processing

® Year-end closing ® Reverse). Using this function, you can re-open the last closed fiscal year, either for selected depreciation areas in a company code, or for all depreciation areas in a company code. You do this by changing the field for the last closed fiscal year.

Be careful if you re-open a fiscal year only for certain depreciation areas, and you need to make adjustment postings only in these areas. You cannot use the standard transaction types for these postings, since the standard transaction types post to all depreciation areas. Instead, you have to define your own transaction types in Customizing for Asset Accounting (Transactions), limiting them to the required depreciation areas.

For more information, see

Handling Errors during Year-End Closing

Procedure

Carrying Out Year-End Closing