Profit/loss carried forward (SAP Business One)

Of the Profit/loss carried forward is the amount of unutilised profit or unabsorbed loss from the previous year that is carried forward to the following financial year. It is a component of equity and is used to determine retained earnings or accumulated losses in the new financial year.

Origin:

Profit carried forward: Retained earnings that have not been distributed or transferred to reserves.
Loss carried forward: Losses from previous periods not covered by profits.

Accounting:

According to § Section 268 (1) HGB Profit/loss carryforwards are combined with the net profit/loss for the year and result in the Retained earnings or accumulated loss.
If the balance sheet is prepared after partial appropriation of profits, the retained earnings replace the net profit for the year and the profit carried forward as a separate item.

Function in the appropriation of profits:

The profit/loss carried forward, together with the annual result, forms the basis for the decision on Distribution, creation of reserves or carryforward to the following year.

Presentation in the chart of accounts (example SKR 03):

0860: Profit carried forward before utilisation
0868: Loss carried forward before utilisation
2860: Profit carried forward after utilisation
2867: Loss carried forward after utilisation

influence on equity:

On Profit carried forward increases equity (appropriation of profit).
On Loss carryforward reduces equity (unrealised losses).

Profit/loss carried forward in SAP Business One:

The profit/loss carried forward is recognised indirectly via the Gain/loss accumulator at Balance sheet report pictured.
The balance of the P&L account is recognised at the end of the period. automatically to equity a.
On Balance sheet account for unutilised gains or losses can be managed manually and addressed by posting the P&L result.
The reports Balance sheet and change in equity represent the amount carried forward from previous periods as part of the statement of changes in equity.
No separate posting logic for profit carried forward - however, the user can generate an explicit statement via manual journal entries.

Versino Financial Suite

With the Versino Financial Suite the profit/loss carried forward in SAP Business One is not only mapped more transparently and audit-proof, but is also managed more efficiently and flexibly. The suite creates a professional basis for equity development, facilitates the preparation of financial statements and supports companies in making their financial processes future-proof, compliant and meaningful.

Example: A profit of € 8,000 remains after the annual financial statements, which is not distributed. In SAP Business One, the P&L balance is automatically credited to the equity account. If necessary, the amount can be manually transferred to a "Profit carried forward" account in order to show it separately in the following year.