Period Expense
Monthly Depreciation Expense System (Optionally use Open Year)
This is an optional method which can be used to generate monthly accounting
transactions for a general ledger. It may be ignored by those who wish
to use a simple annual reporting model, or, for those who use estimated
standing journals, with quarterly or annual reconciliations.
Background:
The Mindbow Fixed Assets program operates on an open year. You may set
options to restrict changes to closed periods, but the design of the software
is to allow changes to assets at anytime during while the current year
is open. This is a purely optional extra. There is no need to use month
end procedures if you only wish to use the period to date expense (open
Year) reports.
How it works:
Each Asset has an expense recorded for Tax & Depreciation by
period. This data is held in a separate table. Period expense may be calculated
whenever desired. You can make prior adjustments to an asset, unless you
prevent this with the appropriate settings. The expense adjustments will be added to the current "open"
period.
Example:
An Asset has a period one expense of $10.
This will be stored in the period one "slot" for this asset.
If you subsequently amend the asset after you have closed off period one,
any change will be carried forward into the next period. So if in Period
2 the expense was $12, and total YTD expense was $24, the period 2 expense
would be $14, being the $2 adjustment for period 1 + $12 period 2. An
example of this would be changing depreciation rates mid year. You could
"recalculate" the period one "slot" if you like, and
repost the period one figures. Similarly, Groups, Branches and Departments
will record depreciation expense in the relevant Periods.
If an asset is added to a "closed" period, all depreciation expense
will be added to the first "open" period. If you move an asset
from one cost centre to another, the group expense will remain in the
cost centre at the time of calculation. Cost centre period expense is
stored separately from asset period expense.
You may still move around the year, and
view assets as at any period. Any prior period adjustments, if permitted,
simply appear in the current open period. Therefore, Period
Expense may not match the open year expense in any period.
The Period Expense system calculates all depreciation expense by asset
class and cost centre, and holds these transactions in dedicated tables
for each period. These values are valid for all closed periods and for
the current open period. The Period Expense
will be a valid value if the previous period is closed, or if it has been
calculated for the current open period. This value will not appear in
a report if it has not been calculated.
Standard reports, based on the open year
method, do not need the period expense to be valid for any period, as
our system is designed around an open year.
Periods are closed or re-opened in the Calendar form. To close a period,
it must be open, and the previous period closed. The Calendar Close Period
option will calculate the period expense for the current period before
closing that period.
Closed Periods may be re-opened.
The Re-open Period will Clear all expense
data for all later periods, and set these to open.
Warning: This system should not be used
while the "Setup rule" is activated. Specifically, all pre-existing
assets must be added before using the period expense module. Failure to
follow this requirement will mean that you will need to recalculate all
periods to incorporate the new assets. The software will identify this
situation, and force this requirement.
See Also: Calendar
Closing Periods
Re-opening Periods
