FIN.4:4.3 - Roll flows into positions and close the accounts

When financial positions are needed, start each relevant balance from its actual opening amount and apply the events that change it. In a simple account without other adjustments:

• Closing receivables = opening receivables + credit sales − collections.
• Closing inventory = opening inventory + purchases or production cost − cost consumed or sold.
• Closing payables = opening payables + purchases on credit − settlements.
• Closing net equipment = opening net equipment + capital additions − depreciation − carrying amount disposed.

Include write-offs, remeasurement, acquisitions and other movements when applicable. Purchases and cost of goods sold need not be equal while inventory changes. A disposal’s carrying amount leaves the balance sheet; its cash proceeds and taxable gain or loss require their own treatment. Depreciation reduces the asset’s carrying amount and profit, while the cash spent to acquire it belongs at its payment date.

Roll debt through the financing scenario’s borrowing and principal repayment, retained earnings through profit and distributions, and cash through receipts and payments. Reconcile assets, liabilities and equity. A difference can reveal a missing event, a scope mismatch or inconsistent timing. It does not identify its own cause. Trace the material imbalance to the responsible account instead of inserting an unexplained asset or receipt.

Agreement of the statements is an internal consistency result. A balanced forecast can still assume unattainable sales, too little maintenance or collections that customers cannot make. Reconcile the calculation and challenge the important economic assumptions as different tasks. A management reclassification does not amend a statutory account; use MA.4’s return to the responsible accounting process where the source requires correction.