Exact Globe

Release 390: Multi-level Profit & Loss Year-End Processing (Portuguese and Russian Legislations)

Introduction

The profit & loss (P&L) processing in the Portugal and Russian Federation does not require a complete and immediate reallocation of the P&L general ledger (G/L) account balances to a single balance sheet (B/S) G/L account to reflect the annual financial results of the company. The process in these countries is more complicated and requires that a reallocation of balances of P&L G/L accounts to some special resulting P&L or B/S G/L accounts.

The balances of these resulting P&L G/L accounts will then be reallocated to the net result P&L G/L account at the end of the year. The result that was allocated to the net result P&L G/L account will be reflected in the opening balance of the following year. Since any of the correction entries for those resulting P&L G/L accounts for the previous year should not be allowed after the year-end closing process, some correction entries can be made to the net result P&L G/L account to reflect on the financial result of the previous year.

After all the correction had been made to the previous year, the balance of the net result P&L G/L account will then be reallocated to the B/S G/L account in order to reflect on the annual financial results of the company.

In this enhancement, in order to allow a multi-level year end closing process, all the P&L G/L accounts will be associated with the resulting P&L G/L accounts. During the year-end closing process, all the P&L G/L accounts will be closed to their associated resulting P&L G/L accounts.

Menu path

• System/General/Settings/General ledger settings
• Finance/General ledger/Chart of G/Ls
• Finance/General ledger/Chart of G/Ls - Maintain G/Ls
• System/Finance/Process profit/loss
• XML/Financial import/General ledger accounts
• XML/Financial export/General ledger accounts

What has been changed

The following changes are implemented and applicable to Portuguese and Russian legislations.

1. By default, the system enabled the multi-level year-end closing process. A new Net result: Profit & Loss field that is mandatory is added to the General ledger section in the General ledger settings. The field allows the users to define the net result P&L G/L account to be used.
   
   
   

2. In the Chart of G/L's screen at Finance/General ledger/Chart of G/L's), the option Show: Associated account to display the associated resulting P&L G/L accounts is added. By selecting this option, the Associated G/L and Associated G/L description columns will be shown.
   
   
   
   Note: The G/L accounts that is used as associated resulting P&L G/L account cannot be deleted.

3. In the G/L Maintain account screen, an Associated account tab is added. For all the P&L G/L accounts, it is mandatory to fill in the associated resulting P&L G/L account in the Account: P & L field (with exception to the G/L account defined as the Net result P & L G/L account in the setting and the field will be disabled).
   The P&L G/L accounts can be associated to this resulting G/L account with the icon at the To be associated section.
   
    

4. With this new multi-level year-end closing process, the system is not required to close the balance of the net result P&L G/L account to the resulting B/S G/L account. Thus, it is no longer mandatory to define the resulting B/S G/L account.
   
   
   
   Note: As the users are allowed to close the balance of the net result P&L G/L account manually in the general journal at any time, the system will not be able to differentiate the closing entries, since the Closing line type is not available in the general journal application. Therefore, in order for the financial reports to display the closing entries correctly, users need to perform the year-end closing for net result P&L G/L account by defining the B/S G/L account.

5. The XML import or export files for general ledger accounts are adjusted to included the associated resulting P&L G/L accounts in this implementation. This included the import and export of G/L accounts using the Template function.
   
              

For more details of the multi-level year-end closing process, see Multi-level Year-End Closing Process Functionality.

Note: The performance of the year-end closing process will be affected as a result of the multi-level year-end closing process implementation.

Related document

There are no related documents for this release note.