There is a field on the Companies Table called Fiscal Year Last Month. When Financial Period Close is run for the first day of the following period, Retained Earnings Journal Entries will be created.
​
​

Here is how the logic works:
​
1. On Financial Close, calculate what the date of the year-end entry would be. For Fiscal Year End = September, the date would be 10/1/2023
​
2. Check that the current Financial Close Date is less than that calculated Year End Entry Date
​
3. Check that the new Financial Close Date we want to close through is greater than or equal to the calculated Year End Entry Date
​
4. Look for an existing Year End Journal Entry with a Date = 10/1/2023
​
5. If the Journal Entry does not already exist, Encompass will create a new one and calculate its transactions.
​
6. These Journal Entries are calculated by zeroing all accounts from the Income Statement and moving them to Retained Earnings.

Please note, if the year-end Retained Earnings Entry needs to be adjusted, this can be accomplished by reopening and re-closing the financial period.