A transaction record called a period end journal is used to post subsidiary consolidation and year-end close to the general ledger. When you finish the Create Period End Journals activity on the Period Close Checklist, period end journals are automatically created.
- Income Statement Closing Journal – Net income is transferred into retained earnings in this type of period-end journal. At the conclusion of the final period of the fiscal year for an enabled subsidiary, closing journals for the income statement are prepared. The fiscal year end is established by the subsidiary’s fiscal calendar for the purposes of the year-end computations. Any child subsidiaries’ fiscal calendars are disregarded. Only when you perform the process for a child subsidiary does the fiscal calendar for that child company have an influence on the income statement closing journal.
- Consolidation Journal – When a child subsidiary is consolidated into its parent, this form of period end journal shows the change since the beginning of the period and includes the cumulative translation adjustment. For each parent subsidiary that has the functionality enabled, consolidation journals need to be created every period as part of the period end job. Using the account’s aggregated exchange rate type, the period end journal posts translated amounts for each child subsidiary account to the parent. Any imbalance brought on by differences in the rates for the various rate types is rectified by posting to the cumulative translation adjustment account.
- Balance Sheet Closing and Opening Journals – In this type of period end journal, balance sheet accounts are zeroed out, and any necessary balancing amounts are posted to the account you designate. The fiscal year’s final period end diary is this balance sheet closure journal. The fiscal year end is established by the subsidiary’s fiscal calendar for the purposes of the year-end computations. Any child subsidiaries’ fiscal calendars are disregarded. Only when you perform the process for a child subsidiary does the fiscal calendar of that child company have an influence on the balance sheet closure journal.
