What is a roll-forward schedule?

Definition

A roll-forward schedule is a worksheet that shows how an account moved from its beginning balance to its ending balance. It lists the starting figure, the increases, the decreases, and the amount left at period end.

On the books, this is the proof of movement, not a new account. The schedule explains the change; the general ledger still holds the official total.

Where it shows up

Balance sheet: Related to proving how a balance-sheet account moved during the period.

P&L: Related to expense accounts that need a movement schedule, such as depreciation.

Cash flow: Related to reconciling beginning and ending cash, not a cash-flow line.

See also: Beginning Balance | Ending Balance | Supporting Schedule

You will not see a roll-forward schedule as a line on the Balance Sheet. It sits behind a line such as prepaid insurance, fixed assets, or debt, and it shows why that line changed.

The Income Statement may receive the expense that the schedule explains. Amortization of prepaid insurance and depreciation both show up as expense, while the schedule itself stays off the P&L.

Cash flow is not the schedule. A cash roll-forward can help you check beginning cash plus receipts minus disbursements against ending cash, but that math is support, not a cash-flow statement line.

How it works

The math is always the same. Beginning balance plus increases minus decreases equals ending balance.

How a roll-forward schedule is built:

• Start with the amount the account showed on day one of the period
• Add the items that raised the account and subtract the items that lowered it
• Match schedule amounts to posted journal entry activity in the ledger
• Confirm the ending figure equals the ledger ending balance
• Keep one schedule per account, or per group of accounts that move together

What counts as an increase depends on the account. Prepaid insurance increases when you pay a new policy, and it decreases when you amortize a month of coverage.

Fixed assets increase when you buy equipment. They decrease when you record depreciation or sell an asset.

A depreciation schedule is one common form of this worksheet. It lists each asset, its cost, and the depreciation taken this period so the net book value rolls forward.

If the schedule says $200 left the prepaid account, the ledger should show a $200 credit to prepaid insurance. That credit is often part of an adjusting journal entry. Posting the entry moves the ledger; the schedule is the worksheet that shows why the move is the right size.

If ending figures do not match, either a posting is missing from the schedule or the schedule includes an amount that never hit the books.

The schedule is not the close itself. It is one support page used while statements are being finished.

Example

A bike shop prepaid a twelve-month insurance policy and starts the month with $2,400 still on the books. During the month it records $200 of insurance used, and it buys no new coverage.

The schedule reads: $2,400 beginning, plus $0 of new prepayments, minus $200 amortized, equals $2,200 ending. That is beginning plus increases minus decreases equals ending.

The $2,200 should match prepaid insurance in the general ledger on the last day of the month. The $200 should match insurance expense on the Income Statement.

The shop does not need a second conversion load to create these figures. The beginning $2,400 was last month's ending amount, carried forward.

If the owner later asks why prepaid insurance fell, the schedule is the answer. It fell because $200 of coverage was used, not because cash left the bank this month.

Common mix-ups

A roll-forward schedule is not an opening-balance load. An opening balance is the conversion figure put into a new file; this schedule tracks movement after the books are already running.

A roll-forward schedule is not the same as flux analysis. Flux analysis explains why a balance changed compared with last period, in words and percentages; the roll-forward is the arithmetic of this period's own increases and decreases.

A roll-forward schedule is not the Trial Balance. The Trial Balance lists ending figures for every account; the schedule explains how one account got to its ending figure.

Related terms

• Beginning Balance: An account's balance at the start of the reporting period.
• Ending Balance: An account's balance at the close of the reporting period.
• Supporting Schedule: A detailed worksheet backing up a single line on the financial statements.
• Account Reconciliation: Proving that a ledger balance agrees to independent support.
• Retained Earnings Roll-Forward: A schedule tying beginning retained earnings to the ending balance through income and distributions.
• Depreciation Schedule: The supporting schedule listing each asset, its cost, life, and depreciation to date.
• Month-End Close: The monthly version of the close, ending in issued financial statements.
• Flux Analysis: Explaining why each account moved compared with the prior period.