What is an Opening Balance?
An opening balance is the value of an account at the start of a new accounting period. For Balance Sheet accounts, it represents the closing balance from the previous period. For Net Income, it refers to the cumulative earnings carried forward within the retained earnings section of equity.
How is a Balance Sheet Opening Balance determined?
Most Opening Balances for Balance Sheet accounts are imported from your source system or calculated by Cube during imports. The memo associated with the Opening Balance transaction will note the source so you can easily determine where the value is coming from.
Publishing an Opening Balance
Cube typically stores data going back 3-5 years, though your instance may have more or fewer. This means we need to account for all financial data before the data in Cube to accurately report your cumulative net income. If we can't import data for previous periods, we can publish it to a Cube Opening Balance time dimension.
For example, if a company has data from 2015 and the first time period in Cube is Jan-2020, we'll use an Opening Balance to account for earnings from Jan-2015 to Dec-2019.
You may be able to provide the Opening Balance for a specific date (Jan-2020), such as right before your first time period in Cube, or you can calculate and publish it.
To find the Cube Opening Balance for the example above, we would use the following:
- Dec-2019 Retained Earnings
- Dec-2019 Net Income
These make up the Ending Balance for 2019, meaning they’re the Opening Balance for 2020. We would add those together to get our Cube Opening Balance
Opening Balance = Dec-2019 Retained Earnings + Dec-2019 Net Income
This value would be published or imported to the following cross-section of dimensions:
- Time: Cube Opening Balance
- Account: Net Income Opening Balance
- Scenario: Actuals
- Any additional top-level dimensions are listed as: [Dimension Name] - Other
How to begin reporting on Retained Earnings by a Specific Vendor or Subsidiary?
If you are currently reporting Retained Earnings at a consolidated level for vendors, subsidiaries, or another dimension and need to report at a more granular level, you can publish your Opening Balances for each dimension.
We'll use Subsidiary as the example here, but this can be done for another top-level dimension that needs more a more granular Opening Balance.
When reporting at a consolidated level, the Opening Balance value is located at the following cross-section of dimensions:
- Time: Cube Opening Balance
- Account: Net Income Opening Balance
- Scenario: Actuals
- Subsidiary: Subsidiary - Other
We'll need to publish the specific values to the rest of our Subsidiary dimensions in order to report at that more detailed level. We'll do this by publishing to the following cross-sections of dimensions:
Subsidiary A
- Time: Cube Opening Balance
- Account: Net Income Opening Balance
- Scenario: Actuals
- Subsidiary: Subsidiary A
Subsidiary B
- Time: Cube Opening Balance
- Account: Net Income Opening Balance
- Scenario: Actuals
- Subsidiary: Subsidiary B
Subsidiary C
- Time: Cube Opening Balance
- Account: Net Income Opening Balance
- Scenario: Actuals
- Subsidiary: Subsidiary C