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The FS clearing items are created using the menu path Consolidation Workbench>> Master Data>>Items>>Selected Items and they help make automatic postings in the system to the appropriate FS item when entries are made across the balance sheet and income statement.
Selected items are defined (as per SAP Help) as:
Financial statement items that are used in consolidation postings to ensure that the balance:
* per consolidation unit equals zero (balancing item)
* across all consolidation units equals zero (clearing item)
For example:
The following manual entry is made in BCS—
Credit 17014444 Other current assets—Prepaid Insurance ($1,000.00)
Debit VC80089421 Fringe Benefits—Life Insurance $1,000.00
When this entry is saved, the following postings are made in BCS:
Credit 17014444 Other current assets—Prepaid Insurance ($1,000.00)
Debit VC80089421 Fringe Benefits—Life Insurance $1,000.00
Debit BCSBSRE BCS Balance Sheet Retained Earnings $1,000.00
Credit BCSISRE BCS Income Statement Retained Earnings ($1,000.00)
This “system generated entry� to the 2 BCSXXRE (retained earnings) FS items automatically keeps the balance sheet and income statement in balance.
This type of automatic entry is made every time an entry (manual or automatic) is made in the system that goes across the balance sheet or income statement. This is also true of any reclassifications that involve FS items in both the balance sheet and income statement.
(image courtesy: SAP Help)
PS: Any entry made to a balance sheet FS item is offset by an entry to the income statement clearing FS item, and any entry made to a income statement FS item is offset by an entry to the balance sheet clearing FS item.