How To Fix GC305 - Retained earnings/BS does not equal net income/IS (in group currency)

SAP Error Message - Details

• Message type: E = Error

• Message class: GC - Error Messages for Consolidation/Extended General Ledger

• Message number: 305

• Message text: Retained earnings/BS does not equal net income/IS (in group currency)

What causes this issue?

Company &V1&,
Fiscal year &V2&,
Period &V3&,
Version &V4&:
The balance, accumulated up to the desired period, has been checked for
equality across all value items on the balance sheet and the income
statement.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Please check the item definitions and the existing data records, if
applicable.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message GC305 - Retained earnings/BS does not equal net income/IS (in group currency) ?

  The SAP error message GC305 indicates a discrepancy between the retained earnings in the balance sheet (BS) and the net income in the income statement (IS) when viewed in group currency. This error typically arises during the consolidation process in SAP, particularly when dealing with financial statements of multiple entities within a group.
  Causes of GC305 Error
  
  
  Data Entry Errors: Incorrect or inconsistent data entries in the financial statements of the subsidiaries can lead to discrepancies.
  
  
  Currency Translation Issues: Differences in currency conversion rates or incorrect currency settings can affect the reported figures in group currency.
  
  
  Timing Differences: If the financial data is not updated or consolidated at the same time, it can lead to mismatches.
  
  
  Incorrect Configuration: Issues with the configuration of the consolidation settings in SAP can lead to errors in how retained earnings and net income are calculated.
  
  
  Unposted Transactions: Transactions that have not been posted or are in a pending state can cause discrepancies.
  
  
  Adjustments and Reclassifications: Manual adjustments or reclassifications that are not properly accounted for can lead to differences.
  
  
  Solutions to GC305 Error
  
  
  Reconcile Financial Statements: Review the financial statements of all entities involved in the consolidation to ensure that the figures for retained earnings and net income are accurate and consistent.
  
  
  Check Currency Settings: Verify that the currency settings are correct and that all entities are using the same exchange rates for the reporting period.
  
  
  Review Posting Periods: Ensure that all transactions for the relevant periods have been posted and that there are no timing issues.
  
  
  Adjust Configuration Settings: Check the configuration settings in the SAP system related to consolidation to ensure they are set up correctly.
  
  
  Run Consistency Checks: Use SAP tools to run consistency checks on the data to identify any discrepancies or unposted transactions.
  
  
  Manual Adjustments: If necessary, make manual adjustments to the retained earnings or net income figures to resolve the discrepancy, ensuring that these adjustments are documented.
  
  
  Consult Documentation: Refer to SAP documentation or support resources for specific guidance on handling the GC305 error.
  
  
  Related Information
  
  
  SAP Notes: Check for any relevant SAP Notes that may address known issues or provide patches related to the GC305 error.
  
  
  Consolidation Reports: Utilize SAP consolidation reports to analyze the financial data and identify where the discrepancies are occurring.
  
  
  Training and Support: Consider training for finance and accounting staff on SAP consolidation processes to minimize errors in the future.
  
  
  Audit Trail: Maintain an audit trail of changes made to financial data to help trace back any discrepancies that arise.
  
  
  By following these steps, you should be able to identify the root cause of the GC305 error and implement a solution to resolve it.