Executing Year-End Closing

The head of the Bike Company’s finance department decides it’s time to wrap up the financial year for the general ledger. His first command goes to Kevin, directing him to close the asset accounting for the fiscal year.

Lisette explains to Kevin that there’s no way around it. If changes are made to the master record that affect, for example, the useful life or the depreciation key, this affects all open fiscal years.

Year-end closing is crucial in asset accounting. It is a protection that ensures no changes can be made to the depreciation calculation nor can postings be introduced in the closed year. Once executed, the year-end closing prevents further postings for the closed fiscal year. Importantly, changes to the master record do not affect the closed years.

In addition, asset accounting has its own rules. It allows two fiscal years to be opened at the same time. To open the new fiscal year (YYYY+1), the last fiscal year YYYY-1 must be closed first. You must close a fiscal year in asset accounting so that you can then close it in general ledger accounting.

Closing can be performed for each depreciation area, ledger, or company code.

To close a fiscal year for one depreciation area of a company code, use the Make Company Code Settings - Asset Accounting-Specific app.

To close a fiscal year for one or more company codes or ledgers, use the job template Year-End Closing Asset Accounting (Cross-Company Code and Ledger) from the Schedule Asset Accounting Jobs app.

The following preparations are for year-end closing in FI-AA:

• After the depreciation lists and asset history sheet are checked, depreciation is posted.
• If the final result is unsatisfactory, you can carry out the depreciation simulation, make bulk changes, or make adjustment postings.
• If you change any depreciation values, you must run depreciation posting again. The year-end closing program checks whether the depreciation is posted comprehensively or if the assets contain errors or are incomplete.

If the program does not find any errors, it updates the last closed fiscal year for each depreciation area. The year-end closing program also blocks postings from the asset area to all closed fiscal years.

Prerequisites:

• The system found no errors during the calculation of depreciation (such as, incorrectly defined depreciation keys).
• Planned depreciation was posted completely to the general ledger.
• All assets acquired in the fiscal year have already been capitalized.
• There are no incomplete assets (master records).

Watch Kevin perform the year-end closing in Asset Accounting.

Kevin is unsure whether he can undo the year-end closing, in case there is a mistake, such as choosing the wrong company code.

Lisette explains to him that he can reopen the last closed fiscal year for a company code in case he needs to make corrections in one or more depreciation areas.

To reopen the last closed fiscal year for individual or all depreciation areas of a company code, perform the following steps:

1. From the detail screen of the company code, choose the ledger that you want to reopen the fiscal year for.
2. In the detail screen of the ledger, choose the depreciation areas and open the previous year for them using the corresponding button.

1. Make your adjustments in the previous year. (The corresponding posting periods must be open in General Ledger Accounting.)
2. Execute all necessary year-end closing operations.
3. Ensure that the previous year is closed again in both Asset Accounting and General Ledger Accounting.

• Asset Accounting must be closed before the general ledger year-end closing.
• Only two fiscal years can be open in Asset Accounting.
• A fiscal year that is already closed for accounting purposes must not be opened.