Amoritization QRG

This Document is Machine Translated

An edited version is coming soon.

Last Update by IFM: Noverber 2018

Contained in this reference guide:

Amortization

  1. Create Amortization Template
  2. Associate Amortization Template with Items
  3. Apply Amortization Template on Transaction – Enter Bills
  4. View an Amortization Schedule
  5. Create Amortization Journal Entry

1. Create Amortization Template

Amortization allows you to record the general ledger impact of item purchases and expense charges across multiple future periods.

What role can do that? **Finance Leader

Steps

1.1 Navigate to Lists > Accounting > Amortization Template > New
1.2 Enter the Name of the template.
1.3 Select the Type of the amortization:
  • Standard – Select this type if you are able to enter a Method and Term Source for the template.
  • Variable – Select this type to use this template for percent-complete recognition.
1.4 Select the Method to use:
  • Straight-line, by even periods – amount is amortized evenly for each period.
  • Straight-line, prorate first and last period – amount is amortized in equal amount for each period except for the first and last month.
  • Straight-line, using exact days – amount is amortized individually for each period base on the number of days in each period.
  • Straight-line, prorate first and last period (period-rate) – determines the full number of periods in the schedule and allocates the amount based on the proportional period amount.
  • Custom – enables you to define your own terms, period, and amount to amortize.
1.5 Select the Term Source whether amortization will be based on transaction date or the receipt date.
1.6 Select the Deferral Account to use for GL posting when the transaction is saved.
1.7 Select the Contra Account to use for the amortization Journal Entry (if applicable).
1.8 Select the default number of months to amortize in the Amortization Period field.
1.9 Select the number of month/s in the Period Offset to delay the start of amortization.
NOTE: This will not change the number of periods in the schedule.
1.10 Select the number of month/s in the Start Offset to delay the start of amortization.
NOTE: This will change the number of periods in the schedule.
1.11 Enter the Residual amount (if applicable).
1.12 Enter an Initial Amount (if applicable).
1.13 Click .

2. Associate Amortization Template with Items

Items are the goods and services you purchase and sell.  You can default an amortization template to an item that is usually amortized over a period.  

What role can do that? **Finance Leader

Steps

2.1 Locate the item using the Global Search.
2.2 Click Edit.
2.3 Navigate to Accounting subtab.
2.4 Select the Deferred Expense account to use as the default for this item.
2.5 Navigate to the Amortization subtab.
2.6 Select the Amortization Templa t e  to associate with this item by default on purchase transactions.
2.7 Click .

3. Apply Amortization Template on Transaction – Enter Bills

Track your payables by entering bills as they arrive from vendors.  Apply an amortization template on your transaction to amortize the amount over a period of time.

What role can do that? **Bookkeeper, **Accountant, **Finance Leader

Steps

3.1 Locate the vendor record through Search. Click the vendor record name.

3.2 Click  >
3.3 Enter a Reference No. for this transaction, such as the vendor's invoice number.
3.4 Verify the Accounts Payable Account  that will be affected by this transaction, edit as needed.
3.5 The Amount field will update as you add or edit line items.
3.6 Verify the Terms   and Due Date for this bill, edit as needed.
3.7 VERIFY THE DATE AND POSTING PERIOD FOR THIS BILL, EDIT AS NEEDED.
3.8 Navigate to the Billing subtab.
3.9 Verify the Currency and Exchange Rate for this bill, edit as needed.
3.10 Navigate to the Expense and Items > Expenses subtab.
3.11 Select an Expense Category  (if applicable) or a G/L Account  for this purchase.
3.12 Enter the Amount.
3.13 Select the Amortization template if the amount is to be deferred.
3.14 Select the Amort Start Date to use a different start date from the transaction date. 
3.15 Select the Amort End Date to override the default amortization period setup on the template.
NOTE:  If Amort End Date is left blank, then the end date will be set based on Amort Start Date or transaction date plus the default amortization period.
3.16 Click
3.17 If using items, navigate to the Expense and Items > Items subtab.
3.18 Select an Item  for this purchase.
3.19 Enter the Qty and Rate.
3.20 Select the Amortization information if this expense is to be deferred (should default from the item record).
3.21 Select the Amort Start Date to use a different start date from the transaction date. 
3.22 Select the Amort End Date to override the default amortization period setup on the template.
3.23 Click .

4. View an Amortization Schedule

Amortization schedules are automatically created by the system for transactions that contain item or expense lines associated with amortization templates.

What role can do that? **Bookkeeper, **Accountant, **Finance Leader

Steps

4.1 Navigate to Lists > Accounting > Amortization Schedules
4.2 Click View next to a schedule.
NOTE:  You can also view the schedule from the purchase transaction.  On the transaction expense/item line, in the Amort Schedule column, click on the number to open the schedule.

5. Create Amortization Journal Entry

What role can do that? **Bookkeeper, **Accountant, **Finance Leader

Steps

5.1 Locate the Reminders Portlet on the Home dashboard. Click Amortization Entries Pending. Or navigate to Transaction> Financial> Create Amortization Journal Entries
5.2 Select the Entity  (must be done first).
5.3 Select Posting Period  for the journal entry.  The list will then be filtered to show only entries that are due to post during the period you have chosen.
5.4 Confirm the Journal Entry Date.
5.5 Select a filter to apply to the list.
5.6 Check Select Individual Schedules  to choose which schedules to include in the journal entry (creates only one journal entry). 
  1. Check the Select  checkbox next to each schedule you want to include in the journal entry.
  2. Click .
NOTE: If you click Mark All only boxes on the current segment/page are affected.  You must click for each segment/page of schedules.
5.7 Remove the Select Individual Schedules check mark to include all displayed schedules in the journal entry (creates only one journal entry).  Use the options above to filter the list of displayed schedules.
Click .
NOTE: If you use this option, a journal entry is created for every schedule for the period selected, even if there are hundreds of schedules, or more.
5.8 Select the Amortization Template  to associate with this item by default on purchase transactions.