Deferral Codes

Form ID: (DR202000)

You use this form to view the details of deferral codes defined in the system, as well as to create new deferral codes that can be used for revenue or expense recognition in your organization.

By assigning a deferral code to a line of an invoice or bill, you can defer the amount and recognize it as a revenue or expense in appropriate portions over some number of periods. Once the document is released, a schedule for it is generated according to the recognition method associated with the code; you can use the Deferral Schedule (DR201500) form to view these schedules.

Note:

You cannot delete a deferral code if the code is assigned to a deferral schedule on the Deferral Schedule form.

Form Toolbar

The form toolbar includes only standard buttons. For the list of standard buttons, see Form Toolbar and More Menu.

Summary Area

The Summary area can be used to define a new code to account for deferred revenues or expenses. You can also select an existing code and view its details.


Element	Description
Deferral Code	The unique code for the deferral type. An alphanumeric string of up to 10 characters may be used.
Description	The description of the deferral code.
Active	A check box that indicates (if selected) that this deferral code is active. If you click the selector button in the Deferral Code column or box on the following forms, only active deferral codes are displayed in the lookup table: Deferral Schedule (DR201500) Bills and Adjustments (AP301000) Cash Purchases (AP304000) Invoices and Memos (AR301000) Cash Sales (AR304000) Release Schedules (DR503000) Invoices (SO303000) Stock Items (IN202500) Non-Stock Items (IN202000)
Multiple-Deliverable Arrangement	A check box that indicates (if selected) that the stock item or non-stock item for which this deferral code is specified contains multiple components, such as a fully delivered component and a component (or multiple components) that is delivered over time. For example, a multiple-deliverable arrangement could be a bundle that contains a software license (which is delivered immediately) and a one-year maintenance plan (which is provided over a period).
Recognition Method	The method used to distribute the document amount over the periods. The following options are available: Evenly by Periods: With this method, equal amounts are distributed to all included periods. Evenly by Periods, Prorate by Days: With this method, the amount to be recognized is distributed evenly among periods, with a proportional division among the first and last periods, which are counted as one full period. The installment amounts for the first and last periods are calculated based on a full-period amount that is proportional to the number of days each installment should cover. This method can be used for documents that have a date in the middle of a financial period. Evenly by Days in Period: With this method, the amount is calculated proportionally based on the exact number of days in the period. Flexible by Periods, Prorate by Days: With this method, the amount to be recognized is distributed among periods, with a proportional division among the first and last periods. With this option, the start date of the first period and the end date of the last period are fixed; these dates are taken from the invoice details. Other than this, the method works in the same manner as the Evenly by Periods, Prorate by Days method, described above. If this method is selected, the Start Offset and the Occurrences boxes are not available. Flexible by Days in Period: With this method, the start date and the end date of the period is taken from the invoice details. Other than this, the method works in the same manner as the Evenly by Days in Period method. If this method is selected, the Start Offset and the Occurrences boxes are not available. On Payment: Before payment arrives, the recognition is planned evenly over the specified number of periods. Once a payment has been applied to the appropriate line of the original document, recognition is performed in the amount of the payment that is proportional to the line amount (if there are multiple lines). The recognition of the unpaid amount will be projected in portions that are calculated proportionally to the number of remaining periods, while the actual recognition of the next portion will be performed when the next payment arrives. Note: This method can be applied to the revenue recognition only. When you select the On Payment method in the Recognition Method box, the Revenue option is selected by default in the Code Type box and is not available for editing. You can find detailed examples of using each of these recognition methods at Recognition Methods for Deferred Revenues or Expenses.
Allow Recognition in Previous Periods	A check box that indicates (if selected) that the deferred revenue is recognized in periods that are earlier than the period of a document (such as an invoice). The first recognition period is defined by the Term Start Date specified in a document. If this check box is cleared and the Term Start Date is earlier than the document date, then the system will generate recognition transactions with the date and the financial period of the document. This check box is available only if the Flexible by Periods, Prorate by Days and Flexible by Days in Period recognition method is selected in the Recognition Method box. Note: If the Recognize Adjustments in Previous Periods check box is cleared on the Deferred Revenue Preferences (DR101000) form, for a credit memo with the date later than the Term Start Date of the deferral schedule, the deferred revenue transactions for the period before the credit memo's date will be posted to the credit memo period. In this case, the system ignores the state of the current check box specified for the deferral code used in the document.
Recognize Now %	The percentage of the line amount (expense or income) to be recognized immediately on the document date in the first "recognize-now" transaction.
Start Offset	The number of periods between the period of the transaction date and the start recognition period. The default value is 0. The following values can be specified: A positive value: The recognition will start later than the period of the document date. For example, if you specify 1, the recognition will start one period later. A negative value: The recognition will start earlier than the period of the document date. For example, if you specify –1, the recognition will start one period earlier. Note: If you are generating a deferral schedule for a reversal document (a credit adjustment or a debit adjustment) and the specified deferral code has a negative value in the current box, this value will be ignored, because a deferral transaction for a reversing document cannot be earlier than the date of the reversing document. This box is not available if the Flexible by Periods, Prorate by Days or Flexible by Days in Period option is selected in the Recognition Method box.
Occurrences	The number of transactions through which recognition of the deferred revenue or expense will be performed. This number doesn't include the first ("recognize-now") transaction, and the amount to be divided among occurrences doesn't include the "recognize-now" amount. This box is not available if the Flexible by Periods, Prorate by Days or Flexible by Days in Period method is selected in the Recognition Method box.
Code Type	The type of the deferral code. One of the following options can be specified: Revenue: For revenue recognition Expense: For expense recognition
Use Deferral Account From	The source of the deferral account that will be used for holding the deferred amounts until these amounts are fully recognized. The following options are available: Item Deferral Code
Combine Deferral Sub. From	The rule of composing the deferral subaccount from other subaccounts associated with the document. The following mask options are available for the Revenue code type: E: Subaccount associated with the employee D: Subaccount associated with deferral code L: Subaccount associated with the customer location S: Subaccount associated with the salesperson I: Subaccount associated with the inventory item The following mask options are available for the Expense code type: E: Subaccount associated with the employee D: Subaccount associated with deferral code L: Subaccount associated with the customer location I: Subaccount associated with the inventory item
Copy Sub. from Sales/Expense Sub.	A check box that indicates (if selected) that the corresponding sales or expense subaccount is copied to the deferral subaccount.
Deferral Account	The account used to hold the deferred amount until it is fully recognized. The account type should be specified as follows: A liability account for a deferral code of the Revenue type An asset account for a deferral code of the Expense type The account selected in this box should be configured as a control account for the deferred revenue subledger. That is, for this account, DR should be selected in the Control Account Module column on the Chart of Accounts (GL202500) form. For more information on control accounts, see Control Accounts: General Information.
Deferral Sub.	The corresponding subaccount.

Table 1. Schedule Settings Section
Element	Description
Every x Period(s)	The frequency for generating documents, in periods.

Table 2. Document Date Selection Section
Element	Description
Start of Financial Period	An option button that you click if you want the documents for a recognition transaction to be generated on the first day of the financial period.
End of Financial Period	An option button that you click if you want the documents for a recognition transaction to be generated on the last day of the financial period.
Fixed Day of the Period	An option button that you click if you want the documents for a recognition transaction to be generated on some particular day of the period. If you select this button, specify the particular day in the box right of this option.