Defer Revenues and Expenses, Deferral Templates NAV

Hi All,

To recognize revenues and expenses in periods other than the period in which the transaction is posted, you can use functionality to automatically defer revenues and expenses over a specified schedule.

Deferral functionality is available on sales documents, purchase documents, and in the general journal. The functionality provides benefits, such as:

• Reduced time and effort to defer revenues and expenses after transactions are posted.

• Easy reporting on deferred amounts for customers, vendors, and G/L accounts.

Here we will discuss on Deferring Expenses pertaining to Advertising for 1 year and how to distribute the Amount to respective period.

1)  To set up a G/L account for deferred expenses 

Go to Chart of Accounts and create a New G/L Account of Type Balance Sheet , where the deferred expenses will be posted to. Name the account, for example, Prepaid Advertising Expenses.




2) To set up a deferral template

Search for Deferral Template Page and create New Template. Select the G/L Account created in above step to post deferred expenses.



Please refer below table on how to fill in the Deferral template.

Field	Description
Deferral Code	Identify the deferral template.
Description	Describe the deferral template.
Deferral Account	Specify the G/L account that the deferred expenses 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 purchase 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 02/06/2016. If you enter “Expenses deferral for %4 %6”, then the description displayed will be Expenses deferral for February 2016.

3)  To assign a deferral template to an Item, G/L Account, etc.

Assign the Deferral Template to an Expense Account



4) Create a Purchase Invoice taking the G/L Account to which we tagged Deferral Template.

As soon as we select the G/L Account, the Deferral Code is filled in by default.



Now go to Lines FastTab-->Line --> Deferral Schedule to view the Deferral Calculation.


You can see system has divided the Amount into no of periods we specified in the setup.

You can also change the Deferral Amount here as well on Header or Line and then click Calculate Schedule



5)  You can Preview how deferral expenses will be posted to GL. You can see initially the Expense will be posted to Deferral Account and then the expenses are moved to actual Expense Account for each period.





6) Now post the entries, to review posted deferrals run Purchasing Deferral Summary report.


Similarly you can  Defer Revenues to the Period of Delivery .
Please refer below link
https://msdn.microsoft.com/en-us/library/mt574363(v=nav.90).aspx




Thanks & Regards,
Nandesh Gowda