How to amortize prepaid expenses in AX 2012?

Finance and Operations/AX User Forum
1

Hi, Could anyone tell us how to amortize prepaid expenses in AX 2012?

Prepaid expenses are costs that are paid in total “upfront” but cover a specific time period and should be tracked on a prepaid expense amortization schedule. A good example would be insurance premiums which are often paid for an entire year or 6 months in advance. Many business just expense the entire premium when paid, but GAAP and accrual accounting methods dictate that you should recognize say 1/12th of an annual premium each month over the life of the policy.

There are many amortization spreadsheet tools that I could find (but not sure how to replicate this in AX 2012?) -

These prepaid expense amortization spreadsheet tool allows you to track an unlimited number of prepaid expenses and then make one aggregated monthly journal entry to recognize the appropriate expenses and reduce the prepaid asset by the same amount.

Appreciate your thoughts.

Many thanks

2

Hi Patrick,

You can use accrual schemes functionality in GL to achieve your objective.

In the GL module, Setup under posting section, there we define accrual schemes. In that scheme we define how a expense will be distributed across multiple periods.

After the accrual scheme is created, create a voucher and call that scheme on journal line. After you post the main transaction, the amount will automatically be distributed across periods.

Pranav…

3

Thanks for response pranav. Appreciate it. I will try that and let you know.