User Manual – Amortization
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Amortization of Non-Inventory Items for Purchases & Expenses
1. Amortization Template
2. Amortization Setup under the deferred expense configuration in Chart of
Accounts
3. Amortization Setup under the expense configuration in Chart of
Accounts
4. Amortization Setup under Non-Inventory items for Purchase
5. Transaction record
6. Viewing the amortization schedule
7. Passing the amortization entry
1. Amortization Template
Navigation – List >>> Accounting >>> Amortization Template >>> New
Under the amortization template, leave the deferral account & the contra
account blank. This will be tagged at the individual item/expense level. For the
amortization period, add the number of months for which amortization needs
to be triggered. If this period is fluctuating, leave the field blank and make sure
to enter amortization start date and end date on the transaction level.
2. Amortization Setup under the deferred expense configuration in Chart
of Accounts
Designate a deferred expense account to park the expense paid & eligible for
amortization.
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Select the Deferred Expense type in the chart of accounts setup
3. Amortization Setup under the expense configuration in Chart of
Accounts
Designate the expense account to be debited on systematic amortization of
expense from deferred expense account. Make sure to designate the deferral
account created earlier.
4. Amortization Setup under Non-Inventory items for Purchase
For the designated non-inventory item, the configuration involves 2 stages
a. In the accounting tab, tagging the deferred expense account & the
expense account configured
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b. In the revenue recognition / amortization tab, designating the
amortization template.
5. Transaction
a. Non-Inventory Item
Under the vendor bill, key in the necessary details about the vendor and
designate the item configured under the lines. If amortization period in the
amortization schedule has been left blank, it is important to add amortization
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start date & end date before saving the record. Once saved, a designated
amortization schedule will be created on the line.
b. Expense
Under the vendor bill, key in the necessary details about the vendor and
designate the expense configured under the lines. If amortization period in the
amortization schedule has been left blank, it is important to add amortization
start date & end date before saving the record. Once saved, a designated
amortization schedule will be created on the line.
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The GL impact would be as follows.
6. Viewing the amortization schedule
Navigation – Lists >>> Accounting >>> Amortization Schedules
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7. Passing the amortization entry
Navigation – Transactions >>> Financial >>> Create Amortization Journal
Entries
After 100% process completion, click on complete to view the journal entry
and approve it.
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