The Handle IL Year Closing is used to transfer the balances of the internal ledgers from one year to another. It is only possible to transfer preliminary balances and they can be transferred any number of times. When you perform transfer, it affects all internal ledgers and transfers all IL balances to period 0 of the next year.
In the accounting calendar, it's possible to close GL periods and IL periods separately. However, when you want to close an IL period, the corresponding GL period must be closed first.