Period End Journal Entries

The standard NetSuite behavior of calculating, but not posting, consolidation adjustments and income statement closing meets the requirements of many companies and their subsidiaries. Some subsidiaries, however, may have statutory requirements to record entries in the general ledger for these period end transactions. The Period End Journal Entries feature is designed to meet these statutory requirements. To accommodate the limited need for the feature, the feature is enabled separately at the subsidiary level after it is enabled for the company. When the Multi-Book Accounting feature is also enabled, you can enable this feature for specific subsidiary and accounting book combinations. For details, see Setup for Period End Journal Entries.

The Period End Journal Entries feature processes and posts subsidiary consolidation and income statement closing using a transaction type called Period End Journal. Period end journals are generated automatically when you complete the Create Period End Journals task on the Period Close Checklist. The primary types of period end journals are:

• Income Statement Closing Journal - This type of period end journal moves net income into retained earnings. Income statement closing journals are created at the end of the last period of an enabled subsidiary’s fiscal year. In the year end calculations, the fiscal year end is determined by the fiscal calendar of the subsidiary for which the process is run. The fiscal calendars of any child subsidiaries are ignored. A child subsidiary’s fiscal calendar impacts the income statement closing journal only when you run the process for that child subsidiary.

  A subsidiary preference, Create Income Summary Journals, lets you post your income statement balances to specific profit or loss accounts before closing them to retained earnings.

• Consolidation Journal -This type of period end journal represents the change since the beginning of the period of a child subsidiary consolidated into its parent and includes the cumulative translation adjustment. The period end task includes creating consolidation journals each period for each parent subsidiary that has the feature enabled. The period end journal posts translated amounts for each child subsidiary account to the parent using the consolidated exchange rate type for the account. The posting to the cumulative translation adjustment account corrects any imbalance that results from variances in the rates for the different rate types. For more information, see Cumulative Translation Adjustment (CTA) Overview and Consolidated Exchange Rate Types.

  A consolidated journal posts to the parent subsidiary that has the feature enabled for each child subsidiary below the parent in the hierarchy. For example, in a hierarchy with a parent, children, and grandchildren, consolidation journals are created for each parent-child and each parent-grandchild pair.

• Balance Sheet Closing and Opening Journals – This type of period end journal zeroes out balance sheet accounts and posts any necessary balancing amount to the account you specify. This balance sheet closing journal is the last period end journal in the fiscal year. In the year end calculations, the fiscal year end is determined by the fiscal calendar of the subsidiary for which the process is run. The fiscal calendars of any child subsidiaries are ignored. A child subsidiary’s fiscal calendar impacts the balance sheet closing journal only when you run the process for that child subsidiary.

  Important:

  The Balance Sheet closing report shows all transactions associated with the selected subsidiary. It also shows transactions from the Income Statement closing report and its reversal. NetSuite sums the amounts based on specific accounts.

  For example, assume the accounts are Cumulative Transaction Adjustment and Retained Earnings.

  From the Income Statement closing journal:

  The Cumulative Transaction Adjustment =999,975.00

  From the Income statement reversal journal:

  The Cumulative Transaction Adjustment = -999,975.00

  The Retained Earnings = -999.975.00

  The Total (by adding from all income statement journals)

  The Cumulative Transaction Adjustment =999,975.00-999,975.00 =0

  The Retained Earnings = -999.975.00

  Therefore, the posting of Cumulative Transaction Adjustment in the balance sheet closing journal does not appear.

  To begin the next fiscal year, a reversal of the balance sheet closing journal posts on the first day of the new year.

Another type of period end journal, a Historical Balances Journal, is created as needed the first time you run the period end journal process for a subsidiary. These period end journals post transactions to represent the historical consolidated balances and income statement closing balances for the subsidiary. For details, see Historical Balances Journals.

The process of creating period end journals is automated as a task on the Period Close Checklist. The task prompts you to create the period end journals before you close the period for any subsidiaries for which the feature is enabled. For details, see Period End Journal Creation Process.

Period end mode on the General Ledger and Account Register reports lets you review the effects of the period end journals without affecting the standard reports. A special Post Closing Trial Balance shows the balance of each account, including period end journals, as of a specified period. For details, see Financial Reports with Period End Journals.

You can search for period end journals using a Transaction search with the criteria Type set to Period End Journal. You must also check the Include Period End Transactions box on the search Results subtab. For more information, see Search for Period End Journals.

You can use the Period End Journal Entries feature in conjunction with the GL Audit Numbering feature to provide sequential numbering for all transactions that affect the general ledger. For information about the GL Audit Numbering feature, see GL Audit Numbering.

General Notices