AMORTIZATION OF EXPENSES / MULTI PERIOD ACCOUNTING

Description:

In accounting, the amortization of intangible assets refers to distributing the cost of an intangible
asset over time. Payments are done in installments using a fixed amortization schedule throughout a
designated period. And, record the portions of the cost as amortization expenses in books. Amortization.

In Fusion, Amortization of Expenses are done the concept of Multi Period Accounting (MPA).

Steps:

1. Create a Standard AP Invoice with the Distribution account as Actual Expenses GL account for
which amount to be amortized.

The expenses account to

which Prepaid expenses are
to be amortized
 GL Account: Deferred Expenses

Date Description Amount Date Description Amount

01-jan-2018 Liability Account 10,000.00 31-jan-2018 Balance C/D 10,000.00

10,000.00 10,000.00

Balance B/D 10,000.00

2. Enter the Accrual Account ie., Deferred Expense account in Multi Period Accounting Tab along
with Start Date and End Date for which expenses are Accrued.

Accrual GL Account I e., Deferred

Expense account (Prepaid Expenses)
with Start and End Date

3. At the end of each month before closure of books, execute Create Multiperiod Accounting
program to amortize the Deferred Expenses to actual expenses.
Parameters for Create Multi Period Account Program
 4. Query the invoice through Manage Invoice task and click on Accounting Status.

GL Account: Deferred Expenses

Date Description Amount Date Description Amount

01-jan-2018 Liability Account 10,000.00 31-jan-2018 Item Expenses 833.33

31-jan-2018 Balance C/D 9166.67

10,000.00 10,000.00

Balance B/D 9166.67

Reference:

 How to Change Proration Method of Recognition Journal for Multi Period Accounting in
Fusion Payables (Doc ID 2364230.1)
 R12 How To Use AP MultiPeriod Accounting (Doc ID 2261406.1)