Period Expense
 
Note: The new General Ledger Interface uses the Period Expense system.

Monthly Depreciation Expense System  (Optionally use Open Year)

This is an optional method which can be used to generate monthly accounting transactions for a general ledger. It may be ignored by those who wish to use a simple annual reporting model, or, for those who use estimated standing journals, with quarterly or annual reconciliations.

Background:  
The Mindbow Fixed Assets program operates on an open year. You may set options to restrict changes to closed periods, but the design of the software is to allow changes to assets at anytime during while the current year is open. This is a purely optional extra. There is no need to use month end procedures if you only wish to use the period to date expense (open Year) reports.

How it works:
Each Asset has an expense recorded for Tax & Depreciation by period. This data is held in a separate table. Period expense may be calculated whenever desired. You can make prior adjustments to an asset, unless you prevent this with the appropriate settings. The expense adjustments will be added to the current "open" period.
Example:
An Asset has a period one expense of $10. This will be stored in the period one "slot" for this asset. If you subsequently amend the asset after you have closed off period one, any change will be carried forward into the next period. So if in Period 2 the expense was $12, and total YTD expense was $24, the period 2 expense would be $14, being the $2 adjustment for period 1 + $12 period 2. An example of this would be changing depreciation rates mid year. You could "recalculate" the period one "slot" if you like, and repost the period one figures. Similarly, Groups, Branches and Departments will record depreciation expense in the relevant Periods.

If an asset is added to a "closed" period, all depreciation expense will be added to the first "open" period. If you move an asset from one cost centre to another, the group expense will remain in the cost centre at the time of calculation. Cost centre period expense is stored separately from asset period expense.

i_yellow_sm.jpg You may still move around the year, and view assets as at any period.  Any prior period adjustments, if permitted, simply appear in the current open period. Therefore,  Period Expense may not match the open year expense in any period.

The Period Expense system calculates all depreciation expense by asset class and cost centre, and holds these transactions in dedicated tables for each period. These values are valid for all closed periods and for the current open period. The Period Expense will be a valid value if the previous period is closed, or if it has been calculated for the current open period. This value will not appear in a report if it has not been calculated.

i_yellow_sm.jpgStandard reports, based on the open year method, do not need the period expense to be valid for any period, as our system is designed around an open year.

Periods are closed or re-opened in the Calendar form. To close a period, it must be open, and the previous period closed. The Calendar Close Period option will calculate the period expense for the current period before closing that period.

Closed Periods may be re-opened.  
ex_yellow_sm.jpgThe Re-open Period will  Clear all expense data for all later periods, and set these to open.

ex_yellow_sm.jpg Warning: This system should not be used while the "Setup rule" is activated. Specifically, all pre-existing assets must be added before using the period expense module. Failure to follow this requirement will mean that you will need to recalculate all periods to incorporate the new assets. The software will identify this situation, and force this requirement.




See Also:  Calendar   Closing Periods  Re-opening Periods

New General Ledger Interface