• From: Pakistan
  • Registered: 05/05/2018
  • Posts: 147

Topic: After Closing FY, All profits added into Expenditure Account

hey,

can you please help me for this issue, i have closed my FY such as 01-07-2017 to 30-06-2018,

and company made e.g 1000 + profit after (income - expenses like 11,000 - 10,000)

when we closed the FY 2018, this profits 1000 transfer to B/S as Retain Earning (Current Year)
and also this profit added into Expense Side which equals the balances like (11,000 - 11,000) which means no profit earns?

how can we encounter the issue?

Help me

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: After Closing FY, All profits added into Expenditure Account

This is how double entry accounting works. Financial Year closure means that all P&L are lumped together and transferred to BS from PL which gets zeroed out to start the new fiscal year afresh.

apmuthu's Website

  • From: Pakistan
  • Registered: 05/05/2018
  • Posts: 147

Re: After Closing FY, All profits added into Expenditure Account

Hey, thanks for respond to me,
Well, yes and know about this rule but our company does'nt follow this rule, we want to show our profit at the end after income - expense = profits,
So can you help me about it after closing FY the profits cannot be treated as expense shown as profit in 'Calculated Return'

Regards

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: After Closing FY, All profits added into Expenditure Account

Instead of changing FA core operations, try to change the Balance Sheet report to suit your needs.

apmuthu's Website

  • rafat
  • Senior Member
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  • From: UAE, Dubai
  • Registered: 11/28/2017
  • Posts: 550

Re: After Closing FY, All profits added into Expenditure Account

@apmuthu

I am confused here.. because I have a similar problem but even a little worse
Now @emiangle839 is making a profit and it is added to his expenses.. but I am making a loss and it is deducted from my expenses.. how can that be right?
If I do not close the year and run the report then my balance sheet shows exactly where I am in the specific period that I have chosen.. and its 100% correct.

Where we could be wrong here? I am using the standard US COA.

Regards..

rafat's Website

6 Reply by emiangel839 (edited by emiangel839 04/19/2019 05:05:39 pm)

  • From: Pakistan
  • Registered: 05/05/2018
  • Posts: 147

Re: After Closing FY, All profits added into Expenditure Account

Hey, yes i am totally agree woth rafat, the position of loss is same as less from expenses.
But when we dont close the FY the balance sheet not accurate as our equity cannot be adjusted as per current year profit,
Like

Reserve 1000
Profit 1000
Total equity 2000
If we closed the FY
But if we dont close the CY
Reserve 1000
Profit 0
Total equity 1000

Can you please tell us,
Profits must be follow this rule;
Income - expense = profit
And after close the FY
This profit/loss can be +/- from equity.
* i am using my own created COA and properly point in GL setup.
Help me for this.
Regards

  • From: Pakistan
  • Registered: 05/05/2018
  • Posts: 147

Re: After Closing FY, All profits added into Expenditure Account

apmuthu wrote:

Instead of changing FA core operations, try to change the Balance Sheet report to suit your needs.


Can you please tell me, how can we adjust the Balance sheet as per this issue.

This thing may i know, first don't need to close the FY and at the end of day we need to post a entry of profit in Balance sheet like equity Cr and profit Dr

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: After Closing FY, All profits added into Expenditure Account

Are you all getting this error in your reports or in the screen display / drilldown view itself?

@joe: Has the BS/PL got their Cr/Dr switched on closure of Fiscal Year?

apmuthu's Website

  • joe
  • Administrator
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: After Closing FY, All profits added into Expenditure Account

I don't know what you are doing.
These routines with closing years has been working for at least 12 years without problems.

/Joe

  • joe
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: After Closing FY, All profits added into Expenditure Account

As an addendum. Are you using the last 2.4.6 release. Because I maybe recalling an issue a while ago.

/Joe

  • rafat
  • Senior Member
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  • From: UAE, Dubai
  • Registered: 11/28/2017
  • Posts: 550

Re: After Closing FY, All profits added into Expenditure Account

I am running both 2.4.4 and 2.4.6 same results. Now I am not sure either I am doing something wrong or the interpretation is wrong. I will dig more into this.

rafat's Website

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: After Closing FY, All profits added into Expenditure Account

Check on a clean install of FA 2.4.6+

apmuthu's Website

13 Reply by emiangel839 (edited by emiangel839 04/20/2019 05:46:08 am)

  • From: Pakistan
  • Registered: 05/05/2018
  • Posts: 147

Re: After Closing FY, All profits added into Expenditure Account

hey, thanks for concerning the issue;

well for more clarification i have upload a image for you kindly take a look and let me know

url: https://ibb.co/NTzPfBR

i am using v2.4.5

because this issue cannot presenting clear picture to management about expenses

* and also the same things occurs in v2.4.6 after clean install
Image url: https://ibb.co/Drqk2rh

* before closure of FY the picture of PLS A/C is clear as (Income - Expense = Profit)
*  before closure of FY the picture of B/S  is not clear as Current Year Profit not adjusted into B/S

*After closure of FY the picture of PLS A/C is not clear as (Income - (Expense + Profit) = 0)
*After closure of FY the picture of B/S is clear as Current Year Profit adjusted into B/S

Please take a look in this issue

Suggestion; if you change the operation of PLS than everything will be fine as Income - Expense = Profit and after closure of FY the profit automatically adjusted into B/S, as done already

regards

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  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: After Closing FY, All profits added into Expenditure Account

That is how it is expected to be.
PL will be clear and detailed only before closure.
BS will become clear by itself only after closure as the Profit/Loss gets transferred to it.

apmuthu's Website

  • From: Pakistan
  • Registered: 05/05/2018
  • Posts: 147

Re: After Closing FY, All profits added into Expenditure Account

so, can you please help me or can we do this thing;


1. After closure of FY the picture of PLS A/C will be as (Income - Expense = Profit) as before closure of PLS
2. After closure of FY the picture of B/S is clear as Current Year Profit adjusted into B/S (which is already in working condition)

so can we adjust the point 1,

it will be very thank full for me

Regards

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: After Closing FY, All profits added into Expenditure Account

You may want to make a separate comment like entry below the tallied values in a different column so as not to confuse accountants.

apmuthu's Website

  • joe
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: After Closing FY, All profits added into Expenditure Account

For your information accountants will not be confused about how the accounts are balanced when closing a FY. To bring forward (Close) a balanced accounts to the next FY where balance accounts are equal then the result accounts must also be equal where the former Calculated Return now has landed on the Year Results Account, Debit for Gain or Credit for Loss.
This is normal handling for all accountant.
If you are in doubt, please contact your local accountant.

Joe

  • From: Pakistan
  • Registered: 05/05/2018
  • Posts: 147

Re: After Closing FY, All profits added into Expenditure Account

Hey Thanks for responding to me,
Well, i know the accounting procedure i mean year end closing transactions, but basically what i want i mean to say, we want to show our profits at the end as (income - expenses = profit) the profit must be shown in calculated return,

Is it possible?

  • From: NC, USA
  • Registered: 09/22/2007
  • Posts: 15

Re: After Closing FY, All profits added into Expenditure Account

I'm guessing you would like to show the profit of the Year - even if the Year already has been closed.

A sweet way of showing the results - not in the calculated return - but still showing it, is to establish a General Ledger Account Group - called Profit/Loss - and map your account #9990 only to this group.

Maybe this solves your issue