Enhanced Retained Earnings Roll Forward

Without this opt-in feature, which is called Enhanced Retained Earnings Roll Forward, the balance is carried forward from the last period of the prior year-end to the first period of the current financial year resulting in Beginning Retained Earnings. The roll forward is calculated using the formula (Retained Earnings YTD balance of Last Period of Previous Financial Year (+) YTD Balance of Beginning Retained Earnings Account of Last Period of Previous Financial Year). No adjustments are allowed to the Roll Forward balance as calculated per the formula. This opt-in feature available as of Fall 18, will allow for adjustments. Once enabled, the amount of the Beginning Retained Earnings will be derived from the account rollup configured as the “Source Account for Beginning Retained Earnings Calculation” instead of the formula above. Users will have to structure the Account Rollup Node under the Equity Rollup to include the Planful Current Year Earnings Account, Beginning Retained Earnings Account, and Adjustment to Retained Earnings Account as leaf members. The Standard Journals or Dynamic Journals can only be used to post adjustments to the Adjustment to Retained Earnings Account. The Account Balance as shown for the Source account rollup for the last period of a financial year will be rolled forward as the Beginning Retained Earnings of the first period of the successive financial year.

To learn how to set up Enhanced Retained Earnings Roll Forward, click here. 

Illustration of Use

The image below represents a portion of the financial statements for Financial Years 2016, 2017 and 2018. FY 2016 is the first year of operations. Data for periods 3 through period 11 of FY 2017 are not displayed here and all figures are in YTD.

Current Year Retained Earnings (row 2) is a leaf account setup as the Target Retained Earnings Account in Consolidation Setup. Beginning Retained Earnings (row 3) is the leaf account setup as the Retained Earnings Roll Forward in Consolidation Setup.

Dividends (row 4) and Adjustments (row 5) are leaf account members to be used for making adjustments for Retained Earnings in the Consolidation module.

Current Year Retained Earnings, Beginning Retained Earnings, Dividends and Adjustments are all leaf members of Subtotal Retained Earnings (row 6). All these leaf members have (+) as the Rollup Operator. Subtotal Retained Earnings (row 6) is a Rollup Account under Equity. The account balance of Subtotal Retained Earnings for period 12 of FY 2016 (50) is rolled forward as the Beginning Retained Earnings throughout all periods of FY 2017.

Journal entries have been made to Dividends and Adjustments in period 12 of FY 2017 to affect the adjustments for Retained Earnings which need to be rolled forward as the Beginning Retained Earnings.

The account balance of Subtotal Retained Earnings for period 12 of FY 2017 (88) is rolled forward as the Beginning Retained Earnings throughout all periods of FY 2018.

No currency conversion should be applied to the Beginning Retained Earnings account as the period 12 account balance of a financial year needs to rolled forward in the subsequent financial year.