1) How to calculate the amount distribution if the equal amounts per period is 'No'? -
When this option is set to No, the amount distribution is calculated based on the number of days in each period. Longer periods will receive a higher allocation, while shorter periods will receive less. This ensures that the distribution aligns with the actual duration of each period.
2) If amount cannot distribute equally per period but the option 'Equal amounts per period' is 'Yes'?
If the amounts cannot be distributed equally but the option is set to Yes, the system will attempt to prorate partial periods (e.g., the first or last period) to ensure equal distribution across the remaining periods. This may result in slight adjustments to the amounts for partial periods.
3) What difference and usage of deferral posting method for Balance sheet and profit and loss?
Balance Sheet Method:
Revenue or expenses are deferred entirely to the Deferred Revenue or Deferred Expense accounts on the balance sheet.
This method involves fewer accounts and is simpler to set up.
It is ideal for businesses that prioritize tracking deferred amounts directly on the balance sheet.
Profit and Loss Method:
Revenue or expenses are first posted to Revenue Recognition Offset and Initial Recognition accounts in the profit and loss statement and then moved to the balance sheet.
This method provides a clearer view of gross revenue or expenses for a given period.
It is suitable for businesses that require detailed reporting of recognized and deferred amounts.
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