Calculate the schedule of journal entries required to amortize the amount of a Leapfin data object linearly over a specified time period where the consideration is contingent on a time based condition (ex. subscription)
Deferral Event Debit Account
Deferral Event Credit Account
ex. Deferred Revenue
Recognition Event Debit Account
Recognition Event Credit Account
ex. Deferred Revenue
Field to use as start date to amortize from
Field to use as end date to amortize from
Amount to amortize
Date object event occurred (ex. invoice date)
Full object amount is deferred on date. Credit Deferred Revenue / Debit A/R
Deferral Debit Account (A/R)
Deferral Credit Account (Deferred Revenue)
Leapfin calculates revenue distributions on a daily basis between the provided start_date and end_date, linearly, using the following steps:
- Calculate the average amount per day of the net amount of the line item divided by total number of days (inclusive of both the start and end dates)
- Round the amount per day down to the nearest penny so there is no fractional penny amount
- Iterate through each day during the term (start date to end date) and add an extra cent to a given day each time the accumulated rounding difference calculated above exceeds 1 cent.
- If there is any remainder from rounding after iterating through all of the days, the difference is added to the first day of the term.
- Aggregate all the days by month for the recognition for that month
- Debit Deferred Revenue / Credit Recognized From Deferred for the total recognized amount each day
Every day between the start and end dates a JE will be created:
Recognition Debit Account (Deferred Revenue)
Recognition Credit Account (Recognized from Deferred)
If Month A is locked, and a transaction is invoiced on Month A + 1 with a start date in Month A, any revenue that should be recognized in the locked month will be pushed to the nearest unlocked month.
Should a date change and a recalculation of amortization is necessary for recognized revenue, the difference in a locked month will be pushed to the nearest unlocked month.
Updated 6 days ago