first.variable in a group

[Aexor]

Could you please explain below code  ;

data xyz;
input x $;
cards;
AA
AA
AA
BB
BB
;
run;

data A;
set xyz;
by x;
if first.x then
N+1;
run;

output :- 

Obs x N
1 AA 1
2 AA 1
3 AA 1
4 BB 2
5 BB  2

data B;
set xyz;
by x;
if first.x then N=1;
else N+1;
run;

output for B is

Obs x N
1 AA 1
2 AA  2
3 AA  3
4 BB  1
5 BB 2

I know how dateset B is created its the incrementing the value based of the occurrence of by group x but not sure how dataset A is being created .

Please explain.

[Kurt_Bremser]

The SUM statement

N + 1;

implies an automatic RETAIN of the variable.

In dataset A, the increment happens only when a new group starts; when this happens the first time (and N is still missing), N is set to 1 (like it happens with missing values in a SUM function).