The opening balance expresses the situation in which the company is at the beginning of an accounting year. That is, it is the balance that is made at the beginning of each Accounting cycleto see how they are financial state and the financial situation at the beginning of each year.
The opening balance in accounting is like a situation balance that is done every time we start a financial year. It is carried out with the objective of obtaining an economic X-ray of the company that allows the leaders to make decisions regarding the business activity of the new course. From there, you can consider what are the new actions that are going to be proposed in the next year or define new objectives.
One of the characteristics of the opening balance is that it includes the balance of the company's accounts at the end of the previous period, after making all the adjustments required in the General Accounting Plan. When a company makes the closing balance of a financial year, it becomes the opening balance of the new year.