Adjustments to Prior Periods

Adjustments can be made to previously closed periods in the current fiscal year and periods in the prior fiscal year.  These adjustments may be required to reflect audit adjustments for the prior fiscal year, or to correct estimated entries made to financial and statistical accounts when actual values become available after the final close for a period.  Prior year and prior period entries allow adjustments to be reflected in the fiscal period in which the entries originally should have been processed.

Adjustments can be made for the 12 previous periods (or the 13 previous periods, in a 13-period year).  For example, if the current period is March 1999, adjustments can be made from April 1998 through February 1999.

Adjustment journals are meant to be used on a one-time or non-recurring basis.  Adjustments are not meant to be used in place of standard accrual entries.  If a case arises where adjustment journals are used on a monthly basis to correct closing entries, consideration must be given to extending the period-end closing period so that reasonable closing entries can be made, or to implementing procedures that will provide better estimates for closing entries.

Adjustment journals are entered in the Adjustment Journal Validation Program (GL050E), and posted to the General Ledger by the Adjustment Journal Post Program (GL230P).  Adjustment entries for all locations are processed during the post run.  The post program automatically rolls forward the effect of adjustment entries for balance forward, prior year end, and year-to-date activity fields from the adjustment period up to the current fiscal period.  The change to year-to-date retained earnings caused by adjustment entries is automatically posted.