Preparing the Financial Statements 

Before preparing the financial statements in Financial Accounting, you must first perform some preparatory work in other applications such as Asset Accounting and Materials Management.

In Asset Accounting, you need to post the relevant depreciation values for the fiscal year concerned. The asset history sheet is also created in this application. You may be legally required to include this in your balance sheet.

In Materials Management, you need to complete the physical inventory and material valuation.

In Sales and Distribution, you need to post the goods issues and the invoices for all the appropriate delivery notes. You also need to create the required rebate settlements and their corresponding credit notes. All preliminary invoices should be excluded.

In Human Resources, you must post all salaries and wages for the last accounting period. You should then transfer this data to Financial Accounting.

The program for creating the balance sheet and P&L statement determines the values for the annual net profit or loss as well as the net profit or loss carried forward. No closing postings are therefore needed for these balance sheet items. For more information, see Determination of Annual Net Income and Retained Earnings.

The following topics describe what tasks you need to carry out prior to creating the financial statements, and how these tasks are supported in the system by programs or special procedures.

The list is by no means exhaustive. Some of the procedures described are optional (for example, balance confirmations) and others depend on the types of accounting transactions involved (for example, foreign currency valuation).

The preparations in the other applications are all described in detail in the documentation for those applications.