Adding and Maintaining a Prepaid Expense
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The Prepaid Expense Information window lets you add, maintain or delete a prepaid expense. The Asset Depreciation check box must be selected on the Credit Union Profile - Accounting tab to use the Prepaid Expense Information window. Portico calculates the depreciation expense when the prepaid expense is added to the system and creates the Prepaid Expense Maintenance Report 304. If specified, at month-end, Portico create a journal voucher entry to post the depreciation entries.
To access the Prepaid Expense Information - New window and add a prepaid expense, click General Ledger within the Accounting menu on the Portico Explorer Bar. On the General Ledger menu bar, click Prepaid Expenses, then click New Prepaid.
To access the Prepaid Expense Information window for an existing expense, click General Ledger within the Accounting menu on the Portico Explorer Bar. On the General Ledger menu bar, click Prepaid Expenses, then click Prepaid Information.
How do I? and Field Help
To add a new prepaid expense, enter a unique prepaid ID in the ID field (Length: 8 alphanumeric / Keyword: AI). Spaces, alpha characters and numeric characters may be used as part of the prepaid expense ID. The Prepaid Expense Amortization Report 303 can be sorted by prepaid expense ID. Spaces and alpha characters are sorted prior to numeric characters. For example: ATM, ATM1, 001, 2ATM, etc. If using strictly numeric prepaid expense IDs, the prepaid expense ID must be set up with preceding zeroes to have prepaid expense appear in sequential order by prepaid expense ID. For example: 00000001, 00000002 , etc. This affects both the order online and on the Prepaid Expense Amortization Report 303. The order in which entries are displayed depends on whether or not leading zeros are used, as shown in the following example. If you are not planning to use all eight digits, you may omit as many of the preceding zeros as desired.
| With Zeroes | Without Zeroes |
|---|---|
| 00000001 | 1 |
| 00000002 | 10 |
| 00000010 | 11 |
| 00000011 | 100 |
| 00000100 | 2 |
To maintain an asset, enter the prepaid ID in the ID field and click the green arrow. Click the left and right arrow to scroll through the prepaid expenses in prepaid ID order.
Complete the following information to add or maintain a prepaid expense.
| Field | Description |
|---|---|
| Description |
The description of the prepaid expense that will also appear on the Prepaid Expense Amortization Report 303. Required field. Length: 24 alphanumeric Keyword: DE |
| Purchase Date |
Click the down arrow to select the purchase date of the prepaid expense from the calendar or enter the date in MM/DD/YYYY format. Required field. To add an existing prepaid expense and reflect the entire depreciation, select the original purchase date. To reflect only the remaining depreciation, enter the current date. The purchase date may be in the current month, a past month or a future month. If using a past date, Portico will adjust the book value according to the difference between the purchase date and the current date, unless you enter an amount in the Book Value field. If using a future date, Portico will not depreciate the prepaid expense until the purchase date is reached. Keyword: PD |
| Purchase Price |
The purchase price of the prepaid expense. The purchase price will be used in the depreciation calculation. Required field. To add an existing prepaid expense and reflect the entire depreciation, enter the original purchase price. To reflect only the remaining depreciation, enter the remaining balance. The amount entered must be equal to or greater than zero. Length: 12 numeric including decimal Keyword: PP |
| Estimated Life |
The original estimated life of the prepaid expense up to a maximum of 999 months. The estimated life will be used in the depreciation calculation. Required field. To add an existing prepaid expense and reflect the entire depreciation, enter the original estimated life. To reflect only the remaining depreciation, enter the remaining estimated life. Length: 3 numeric Keyword: EL |
| Salvage Value |
The value of the prepaid expense after it is completely depreciated, usually $1.00 or $0.00. Required field. The salvage value is used in the depreciation calculation. If the salvage value is less than the book value, Portico makes a depreciation entry. If the salvage value is greater than or equal to the book value, Portico does not make a depreciation entry. Length: 12 numeric including decimal Keyword: SV |
| Book Value |
You can enter the value of the prepaid expense as it depreciates in the Book Value field or leave the field blank to have Portico calculate the value. The system-calculated or user-defined current value of the prepaid expense. The book value is the value of the prepaid expense as it depreciates. The book value is decreased each month by the depreciation amount until the book value is equal to the salvage value. Leave blank to instruct Portico to determine the value automatically. If the purchase date is in the current month or in a future month, Portico will use the value in the Purchase Price field. If the purchase date is in a past month, Portico will determine the number of months already depreciated and subtract it from the purchase price to determine the book value. At each month-end, the system decreases the book value by the depreciation amount. The system will not depreciate an asset once the book value equals the salvage value. To have Portico recalculate the Book Value field when changing data on the Prepaid Expense Information window, you must blank out the field. Length: 12 numeric including decimal Keyword: BV |
| Depreciation Amount |
The system-calculated or user-defined depreciation amount of the prepaid expense. Leave blank to instruct Portico to determine the depreciation amount automatically using the following calculation: (purchase price - salvage value)/estimated life. The Depreciation Amount field is not calculated if you enter a user-defined depreciation amount. To have Portico recalculate the Depreciation Amount field when changing data on the Prepaid Expense Information window, you must blank out the field. Length: 12 numeric including decimal Keyword: CA |
| One Time Amount |
The depreciation amount Portico should use instead of the normal monthly depreciation amount. The one-time depreciation amount is only used if the date in the One Time Date field is in the current month. Once the date is past, Portico will use the amount in the Depreciation Amount field. If the date is in the future, Portico will continue to use the amount in the Depreciation Amount field until this date is reached. Use 0.00 as a valid value to "skip" a month of depreciation. The one-time fields can be maintained as many times as necessary. Length: 12 numeric including decimal Keyword: OA |
| One Time Date |
The date that a one-time depreciation amount is applied to the prepaid expense. Click the down arrow to select the date from the pop-up calendar or enter the date in MM/DD/YYYY format. The date you enter is the month-end Portico uses the indicated depreciation amount. Once the month-end is past, Portico uses the amount in the Depreciation Amount field. A future date may be entered to set up a one-time depreciation amount for the future. If the date is in the future, Portico will continue to use the amount in the Depreciation Amount field until this date is reached. The one-time fields can be maintained as many times as necessary. Keyword: OD |
| Allowance Account |
The depreciation allowance general ledger account associated with the depreciation of the prepaid expense. This general ledger account is credited when Portico makes a depreciation entry. Required field. Length: 6 numeric Keyword: AG |
| Allowance Branch |
Click the down arrow to select the branch associated with the depreciation allowance general ledger account. Required field. Keyword: AB |
| Expense Account |
The depreciation expense general ledger account associated with the depreciation of the prepaid expense. This general ledger account is debited when Portico makes a depreciation entry. Required field. Length: 6 numeric Keyword: EG |
| Expense Branch |
Click the down arrow to select the branch associated with the depreciation expense general ledger account. Required field. Keyword: EB Expense Branch |
| Prepaid Account |
The prepaid general ledger account associated with this prepaid expense. System default is 000000. The Prepaid Expense Amortization Report 303 can be sorted by prepaid expense GL. Length: 6 numeric Keyword: RG |
| Prepaid Branch |
Click the down arrow to select the branch associated with the prepaid expense general ledger account. System default is 000. Keyword: RB |
| Location Code |
The location code associated with the prepaid expense. This code is credit union-defined and is not required. This field can be used to sort prepaid expenses on the Prepaid Expense Amortization Report 303. Length: 4 alphanumeric Keyword: LO |
| Prepaid Type |
The code identifying the type of prepaid expense. This code is credit union-defined and is not required. This field can be used to sort prepaid expenses on the Prepaid Expense Amortization Report 303. This allows the credit union flexibility in grouping similar prepaid expenses together. Length: 4 alphanumeric Keyword: TP |
| Tax Category |
The taxable category such as furniture/fixtures, machinery, computer, etc. Required if the Taxable check box is selected. Length: 4 alphanumeric |
| Taxable |
Select this check box if the prepaid expense is taxable under the category entered in the Tax Category field. |
| Department |
The department where the prepaid expense is used. This information is credit union-defined and is not required. This information does not appear on the 303 and 304 Reports. Length: 25 alphanumeric Department |
| Vendor Code |
The credit union-defined code that identifies the vendor. Click the detail icon button to display the Vendor Information window for the vendor. Length: 6 alphanumeric Vendor Code |
| Serial Number |
The serial number of the prepaid expense. Length: 25 alphanumeric Keyword: SR |
| Internal ID |
The internal ID number used to identify the prepaid expense. Length: 25 alphanumeric Keyword: TG |
| Warranty Expiration | Click the down arrow to indicate when the item’s manufacturer warranty or insurance policy expires from the calendar or enter the date in MM/DD/YYYY format. |
Click Save to save the prepaid expense information. The Dates Group box indicates the date the prepaid expense was added.
The Removal Information group box lets you remove an prepaid expense and record the date and reason. To indicate that a prepaid expense has been removed from the credit union, select the Prepaid Removed check box. Then, click the Date down arrow to select the date the prepaid expense was removed. Enter the reason the item was removed and any additional comments. Then, click Save. The removed prepaid expense will appear on the Prepaid Expenses window with an R indicating it has been removed and in the Removed Prepaid Expenses section on the Prepaid Expense Amortization Report 303.
Click New to add a new prepaid expense.
Click Delete to delete the prepaid expense.
Click the general ledger account list icon button to open the GL Accounts – List window and view the GL account list.
Click the check disbursal icon button to open the Check Disbursal window and disburse a vendor check.
Click the basic journal voucher icon button to open the Basic Journal Voucher window and create a journal voucher entry.
If the General Ledger Post Indicator field is Y on the 303 Report Rules, the month-end depreciation process creates GL account transactions. Portico posts these transactions using the Basic Journal Voucher window in the month-end cycle. Portico debits the GL account specified in the Expense Account field and credits the GL account specified in the Allowance Account field.
- Prepaid Expense Amortization Report 303 - Portico automatically produces the 303 Report at month-end. However, you can request a copy of the 303 Report at any time. Requesting this report does not cause Portico to calculate or post the depreciation expense. You can use it to review the entries from the Prepaid Expense Information window prior to the depreciation posting at each month-end.
- Prepaid Expense Maintenance Report 304 - The online 304 Report is available one back-office cycle after you complete the Prepaid Expense Information window. Access the online report on the Short Reports - Critical window.
Portico will not depreciate a prepaid expense when the conditions exist:
- The Purchase Date field is in the future.
- The amount in the Book Value field is less than or equal to the amount in the Salvage Value field.
Portico finishes depreciating a prepaid expense when one of the following conditions exist:
- When the prepaid expense reaches the months in the Estimated Life field.
- When the amount in the Book Value field equals the amount in the Salvage Value field or the depreciation amount will take the Book Value field below the Salvage Value field
Portico determines the final depreciation amount by calculating the difference between the amount in the Book Value field and the amount in the Salvage Value field.
- When based on the months in the Estimated Life field, the amount can be greater than the amount in the Depreciation Amount field.
- When based on the other condition, the amount usually is less than the amount in the Depreciation Amount field.
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