Revenues for services or goods delivered over multiple accounting periods are not necessarily recognized in the accounting period in which the sales document is posted and payment is received.

To distribute revenues on the involved accounting periods, you can set up a deferral template for the resource, item, or G/L account that the revenues will be posted for. When you post the related sales document, the revenues are deferred to the involved accounting periods, according to a deferral schedule that is governed by settings in the deferral template and the posting date.

This topic contains the following procedures:

To set up a G/L account for deferred revenues

  1. In the Search box, enter Chart of Accounts, and then choose the related link.

  2. On the Home tab, in the New group, choose New.

  3. Create a new G/L account of type Balance Sheet that the deferred revenues are posted to. Name the account, for example, Unearned Income. For more information, see How to: Set Up General Ledger Accounts in the Chart of Accounts Window.

To set up a deferral template

  1. In the Search box, enter Deferral Templates, and then choose the related link.

  2. On the Home tab, in the New group, choose New.

  3. Fill the fields as described in the following table.

    Field Description

    Deferral Code

    Identify the deferral template.

    Description

    Describe the deferral template.

    Deferral Account

    Specify the G/L account that the deferred revenues are posted to.

    Deferral %

    Specify how much of the total amount will be deferred.

    Calc. Method

    Specify how the Amount field for each period in the Deferral Schedule window is calculated. You can choose between the following options:

    • Straight-Line: The periodic deferral amounts are calculated according to the number of periods, distributed according to period length.
    • Equal Per Period: The periodic deferral amounts are calculated according to the number of periods, distributed evenly on periods.
    • Days Per Period: The periodic deferral amounts are calculated according to the number of days in the period.
    • User-Defined: The periodic deferral amounts are not calculated. You must manually fill the Amount field for each period in the Deferral Schedule window. For more information, see the “To change a deferral schedule from a sales invoice” section.

    Start Date

    Specify when to start calculating deferral amounts. You can choose between the following options:

    • Posting Date: The start date used when calculating deferral amounts is the posting date of the invoice.
    • Beginning of Period: The start date used when calculating deferral amounts is the first day of the accounting period in which the posting date falls.
    • End of Period: The start date used when calculating deferral amounts is the last day of the accounting period in which the posting date falls.
    • Beginning of Next Period: The start date used when calculating deferral amounts is the first day of the accounting period that follows the accounting period in which the posting date falls.

    No. of Periods

    Specify how many accounting periods the total amounts will be deferred to.

    Period Desc.

    Specify a description that will be shown on entries for the deferral posting.

    You can enter the following placeholder codes for typical values, which will be inserted automatically when the period description is displayed.

    • %1 = The day number of the period posting date
    • %2 = The week number of the period posting date
    • %3 = The month number of the period posting date
    • %4 = The month name of the period posting date
    • %5 = The accounting period name of the period posting date
    • %6 = The fiscal year of the period posting date

    Example: The posting date is 8/11/2016. If you enter “Revenue deferral for %4 %6”, then the description will be Revenue deferral for February 2016.

To assign a deferral template to a resource

  1. In the Search box, enter Deferral Templates, and then choose the related link.

  2. Open the card for the resource for whom revenue must be deferred to the accounting periods when the resource delivered the service.

  3. On the Invoicing FastTab, in the Default Deferral Template field, select the deferral template.

To change a deferral schedule from a sales invoice

  1. In the Search box, enter Sales Invoices, and then choose the related link.

  2. Create a sales invoice for services delivered by a resource that has a deferral template assigned. For more information, see How to: Invoice Sales.

    Notice that as soon as you enter the resource (or item or G/L account) on the invoice line, Deferral Code field is filled with the code of the assigned deferral template.

  3. On the Lines FastTab, choose Line, and then choose Deferral Schedule.

  4. In the Deferral Schedule window, change settings on the header or values on the lines, for example to defer the amount to an additional accounting period.

  5. On the Home tab, in the Process group, choose Calculate Schedule.

  6. Choose the OK button. The deferral schedule is updated for the sales invoice. The related deferral template is unchanged.

To preview how deferred revenues will be posted to the general ledger

  1. In the Sales Invoice window, on the Actions tab, in the Posting group, choose Preview Posting.

  2. In the Posting Preview window, select G/L Entry, and then choose Show Related Entries.

    G/L entries to be posted to the specified deferral account, for example, Unearned Income, are denoted by the description that you entered in the Period Desc. field in the deferral template, for example, Revenue deferral for February 2016.

To review posted deferrals in the Sales Deferral Summary report

  1. In the Search box, enter Sales Deferral Summary, and then choose the related link.

  2. In the Sales Deferral Summary window, in the Balance as of field, enter the date up to which you want to see deferred revenues.

  3. Choose the Preview button.

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See Also