The system checks to see if periods exist for the EntityCompany for the next fiscal year. If periods do not exist, the system creates them.

The system calculates the difference between total income and expenses in the detail accounts for the EntityCompany as a profit or loss amount. This amount is included in the next year beginning balance amount for the retained earnings account setup for that EntityCompany.

When the totals are validated, the system creates an approved batch journal entry of beginning balances for Balance Sheet accounts. The entry is posted to Period 0 of the new year. The line item for the retained earnings account includes the prior year’s profit/loss amount in addition to any retained earnings balance.

The system creates a Journal Entry of beginning balance amounts for all balance sheet accounts for the next fiscal year.

The system updates current period and year to the first period of the next year for the EntityCompany. In addition, the system sets the first period of the next year to active.