Breaking news from around the world
Get the Bing + MSN extension
Now Available in Community - MBAS 2019 Presentation Videos
Catch the most popular sessions on demand and learn how Dynamics 365, Power BI, PowerApps, Microsoft Flow, and Excel are powering major transformations around the globe. | View Gallery
2019 release wave 2 Discover the latest updates to Dynamics 365Release overview guides and videos Release Plan | Early Access Availability
Ace your Dynamics 365 deployment with packaged services delivered by expert consultants. | Explore service offerings
Connect with the ISV success team on the latest roadmap, developer tool for AppSource certification, and ISV community engagements | ISV self-service portal
The FastTrack program is designed to help you accelerate your Dynamics 365 deployment with confidence.
FastTrack Program | Finance TechTalks | Customer Engagement TechTalks | Talent TechTalks | Upcoming TechTalks
Deferral accounts, or Prepaid expenses accounts, as defined by Larson, Jensen and Carroll(2002) are asset accounts. These deferral accounts contain payments made for assets to be used in the near future. As these assets are used up, the costs of the used assets become expenses.
AccountingCoach.com website points out the difference between accruals and deferrals: “an accrual occurs before a payment or receipt. A deferral occurs after a payment or receipt. There are accruals for expenses and for revenues. There are deferrals for expenses and for revenues”.
A few examples where deferrals are usually employed are Office Supplies, Prepaid Insurance, Prepaid Rent, Tax Registration for cars in countries like Denmark or Singapore.
With NAV 2016, Microsoft allowed users to automate the process of deferring not only the expenses, but also the revenue over a pre-defined schedule. To set-up a deferral code is fairly easy. Just type: Deferral in the Search field in RTC, and launch Deferral Template List page. I will go into creating a deferral code a bit later in this article.
Let’s consider this leasing car example, in which an accounting employee at Goldman Bags Bank – Danish subsidiary – is recording an invoice for customer Henrik Jensen for the Danish registration tax for his newly acquisitioned Mercedes SLC, which amounts for 30,000.00 DKK payable in 6 months. The deferral schedule with the 6 monthly adjustments should look like below:
Car Leasing Registration Tax (PRT) Schedule
How would this use case be applied in NAV?
NAV 2016 RTC
General Journal transactions
Alternatively you could assign Deferral Code = ‘Leasing’ to the G/L account 86000 by opening G/L Account card and filling up “Default Deferral Template” with the desired deferral code in which case the Deferral Code will be automatically populated in the Gen. Journal Line.
General Ledger Entries
Each month-end a deferred 5,000.00 DKK will be applied against G/L Account 86000. In the contra account(86100) an equal and opposite sign amount will get posted each month end.
What about my processes? How can I automate my processes to post to deferral accounts via C/AL code?
First, let’s look into how Microsoft implemented invoices with sales lines defined with deferral codes.
Microsoft implementation of Deferrals in Sales Invoices
In CU80, at the end of FillInvPostingBuffer we find the following code snippet:
CU80 – Deferral posting
The highlighted method will populate buffers for 1701 (Deferral Header), 1702 (Deferral Line) and 1703(Deferral Post. Buffer), buffers that will be used by codeunit 12 to validate and post these buffers.
When coming in Codeunit 12, Sourcecode = Sale, therefore, the Deferral Post. Buffer(record 1703) is ready and will be processed as part of PostDeferralPostBuffer.
When coming from the General Journal, PostDeferral method will process 1701 and 1702 records to create deferred general ledger entries:
CU12 – Deferral Posting
Custom Deferral Posting:
For your customized processes, it is not enough to generate a general journal line and post it.
Below is an easy to follow template for injecting deferrals in your business processes:
Sample injection of deferrals
Some code to get you started here.
AccountingCoach. What is the difference between an accrual and a deferral [blog post]. Retrieved from http://www.accountingcoach.com/blog/accrual-deferral
Larson K., Jensen T., Carroll R. 2002. “Financial Accounting Principles” Tenth Canadian Edition (p.141)
Totovic.(September 10, 2015) How deferrals work in NAV 2016[Blog post]. Retrieved from https://totovic.com/2015/10/09/how-deferrals-works-in-nav-2016/
Business Applications communities