Reserve Account (SAP Business One)

On Reserve account is a special G/L account in the chart of accounts of SAP Business One, which is allocated to a company's equity.
It is set up to provide a balance sheet The aim is to make the Group's financial position more transparent by providing capital for future purchases, such as replacement purchases or estimates for bad debts.

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Among other things, the remaining profit (after distribution of dividends) can be transferred to this account. The balance is then carried forward to the following year and, together with the profits of that year, is used for any additional dividends.

Classification in the chart of accounts

Reserve accounts belong to the Account type Other and are listed under the Balance sheet accounts led.
When creating a reserve account in the chart of accounts (Finances > Chart of accounts), this is referred to as Equity account classified.
Account characteristics such as Account number, description and Account type must be defined when creating.
Reserve accounts are generally Active accountsas they include postings such as the appropriation of profits at the end of the year.

Function in the annual financial statements

The change in a reserve account results from the Annual result of the company.
Profits increase the account, losses reduce it. The underlying figures are taken from the Profit and Loss Account (income statement).
The transfer is made as part of the closing process, for example by transferring it to the reserve account.

Presentation in the balance sheet report

The reserve account is part of the Equity position at Balance sheet report.
There, it represents an important component of financial stability and the utilisation of funds within the company.

Technical realisation

The reserve account is recognised in the system as G/L account with balance sheet function created.
It is part of the periodic analyses in the balance sheet structure.
Postings to the account are made manually or automatically as part of the utilisation of earnings.