Balance sheet adjustment is the retroactive assignment of receivables, payables, and taxes to business areas and/or profit centers. This is possible in cases where the original document was posted without account assignments being made to the appropriate fields.

P+L adjustment is the debiting of a profitability segment (business area, profit center, cost center, and so on) with expenses and revenues that occur when a customer or vendor invoice is paid. Two major forms of these revenues and expenses are cash discounts and exchange rate differences.

Adjustments generate adjustment postings to the accounts used for posting the original documents. To do this, the system carries out a transfer posting from an initial account assignment, (that is an account assignment without a value), to another, or several other non-initial account assignments.

The distribution is determined according to the account assignments of the outgoing document’s offsetting entry. All G/L items, except tax items and cash discount items, are regarded as offsetting entries.