Using Several Retained Earnings FI General Ledger Accounts

Expenses for special taxation provisions are relevant to income in the US but not in Germany. These provisions for taxation are posted to special income statement accounts which are needed in the US only. For all other postings you use income statement accounts which are used both in Germany and in the US.

To report profits or losses of the prior year on your financial statements for Germany, you would assign the P+L statement accounts valid for all countries to one retained earnings account (see illustration above, retained earnings account (1); to report profits or losses in the US, you would assign the P+L statement accounts that are valid only for the US to a separate retained earnings account (2).

In generating the country-specific financial statements, you would use retained earnings account 1 for the German balance sheet and both retained earnings account 1 and 2 for the US balance sheet in order to report the profits or losses of the prior year.

If you do not include some income statement accounts in a balance sheet version, you must also omit the corresponding balance sheet accounts. The total of the omitted accounts must be zero.