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The "Close Year" process allows to close a fiscal year. This process also permanently closes all the periods of the year (standard ones and adjustment one).
It is important to remark that it is not required to close the standard periods of a year prior closing that year, however it can help to keep tracking of the periods of the year already reviewed and closed.
The close year process requires that the next year exists and its first period is opened.
Once a year is closed, the status of that year and all its periods can be reviewed in the [Open/Close Period Control](/Open/Close_Period_Control) window. As already mentioned, all the periods of the year are now shown as "Period Status"="Permanently Closed", that means that it is not possible to post any transaction within that year anymore unless the Undo Close Year process is run for that year.
"Close Year" process creates the following accounting entries:
If the revenue accounts total balance is lower than the expense accounts total balance that difference is debited in the Income Summary account, that means a negative result or a loss.
This accounting entry credits all the accounts which have a debit balance and debits all the accounts which have a credit balance. The aim of this accounting entry is to get that Asset and Liability accounts get a zero balance. In order words, let's take an Asset account with a debit balance of 8.000,00. The closing entry creates a credit accounting entry of 8.000,00 in the Asset account of the example. This account entry is posted the last day of the last period of the year being closed, that is the "Adjustment Period" or "13th Period" of the year. Openbravo does not create a G/L Journal for this accounting entry but just the accounting entry. This entry is created only if the Reverse Permanent Account Balances check-box is set to yes. Finally, if a Retained Earnings account is specified for the general ledger configuration, an additional entry dated on the last day of the year is created. This entry moves the Income Summary account balance to the "Retained Earnings" account.
This accounting entry is the reversal entry of the closing entry. Following the example of point 2 above the opening entry creates a debit accounting entry of 8.000,00 in the Asset account of the example. That amount is the opening balance of the asset account for the new year. This accounting entry is posted the first day of the first period of the next year. This entry is created only if the Reverse Permanent Account Balances check-box is set to yes.
Full list of End Year Close window fields and their descriptions is available in the [End Year Close Screen Reference](/Screenshot/End_Year_Close).