Special Features in P&L Statement Accounts
Before you can include P&L statement accounts in the chart of accounts, you need to specify the retained earnings account to which profits or losses are transferred. There is a special program designed to transfer these amounts to this account. In order for this program to be able to carry forward the profit or loss, you have to enter the number of this retained earnings account in the system.
Each P&L account is assigned to a retained earnings account via a key. You have to enter this key in the P&L statement account type field found in the chart of accounts area of each P&L account.
You create the retained earnings account and related key in Financial Accounting Customizing under General Ledger Accounting ® G/L Accounts ® Master Data ® G/L Account Creation ® Preparations ® Define Retained Earnings Account.
Using One Retained Earnings Account
Normally, companies use one retained earnings account. For this reason, X can be used as the key. In the chart of accounts you enter X in the P+L statement account type field, and for account determination you enter the retained earnings account under the key X.
Using Several Retained Earnings Accounts
By having more than one P+L statement account type in the FI system, you are able to specify several retained earnings accounts.
You would use different retained earnings accounts in an international corporate group to meet various requirements for preparing financial statements (See
Using Several Retained Earnings Accounts: Example).