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What is a Financial Year Rollover?

What is a Financial Year Rollover?

The Accounts are split into two major groups that are fundamentally different in nature. One group records Revenue items (displayed in the Income Statement) and the other Capital (displayed in the Balance Sheet). It has been described that “Capital is the Tree and Income is the Fruit of the Tree”. There is nothing tangible in the Revenue accounts they just describe how funds came in and out of your business usually affecting your bank balances in small business. The net profit (or Loss) shows if the years trading has increased (or decreased) your equity.

On a Rollover the Net Profit is added to the Accumulated Equity account in the Balance Sheet (subtracted if a loss).

During a Rollover the “end of year balances” of all Capital accounts are copied to (and will replace) all the Opening Balances in the following Financial year. During this process the net profit is added to the accumulated equity account.

KIS BOOKS does not purge your data during a Rollover, – allowing:

  • full access to previous account histories;
  • allowing editing of multiple financial years without restriction, and;
  • access to six years of image libraries of receipts and other documents especially for audit protection.
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Next What happens if I did a Rollover but I corrected or changed something in previous years?
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