To get the account balances, ERPNext sums up all the ledger amounts from the beginning of time.
Changes in previous Fiscal Years affects the amounts for the current Fiscal Year. (This was mentioned in the discussion of backdated entries.)
Providing each Fiscal Year with Beginning Balances at the start of the year , based on the year-end balance of the previous Fiscal Year will ensure that the current Fiscal Year’s balances will not be affected by any changes outside that Fiscal Year.
Advantages of Beginning Balances
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Fiscal Year’s balances will not be affected by possible changes in previous Fiscal Years. (Beginning Balance for the current fiscal year may be regenerated if necessary to reflect changes in the previous fiscal year accounts).
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Allows deletion of previous fiscal years’ data without affecting the present fiscal year. (Do you really want to recalculate ledger amounts from 20 years back to get the current amount? - if your ERPNext gets to be 20 years old?)
Is a good idea? Please comment.