Creating amortization schedule and distributions for prepaid reconciliation

Amortization schedules are created for each invoice and expensed from Reconciliation Management for each period.
  1. Select Reconciliation > Reconciliations > All Open Reconciliations.
    You can also select Reconciliation > My Reconciliations > Open Reconciliations.
    Note: This option is available through multiple navigation paths.
  2. Open a prepaid account and click Amortizations.
  3. Click Create.
  4. On the Main tab, specify the required information:
    Field Description
    Description Optionally, specify a distribution description.
    Transaction Date Specify the transaction date of the prepaid account.
    Amortization Spread ByPeriods (default)

    Distribute amounts using full periods. Specify a Start Period and End Period.

    ByDays

    Distribute amounts based on the number of days within a period. Specify a Start Date and End Date.
    Straight Line Select this check box to apply a hybrid straight-line by days method when ByDays is selected.
    Generated amortization entries are calculated as follows:
    • First and last periods use actual days.
    • Remaining periods distribute the balance evenly.

    Clear this check box to use the standard ByDays calculation for all periods.
    Catch Up Period Optionally, specify a catch up period if the amortization started prior to the period being reconciled. A catch up period is where the accumulated amount for the proper periods is posted in the General Ledger.
    Period Term Specify a period term for the amortization.
    Amortization Expense Specify either the GL account information or the Allocation Code.

    Optionally, specify a Distribution Description that is used as the default value for generated amortization entries.
  5. Click Save.
  6. Select Actions > Build Amortization Schedule.

    When the amortization schedule is built, the Amortization Details tab is available to view the amortization amount over a range of periods.

    Note: The amortization schedule reflects the selected method. When Straight Line is selected, a hybrid calculation is used. Otherwise, the standard ByDays calculation applies.
  7. On the Amortization Details tab, select a value:
    • End Amortization: End the amortization early and allocate the remaining amortization balance into the current period.
    • Extend Amortization: Change or extend the amortization and allocate the remaining balance evenly over the remaining periods.
    • Update Period Amount: Update the period amount of the amortization.

    When you select End Amortization or Extend Amortization, the amortization amounts are recalculated based on the amortization spread method.

  8. Click Save.
  9. On the Period Reconciliations tab of the prepaid account, create a reconciliation period and open the period record.

    When a prepaid account reconciliation is scheduled for a period, the ledger amount from the back office is displayed. All previously-defined amortization records from the amortization schedule for this account is displayed on the Amortization Details tab.

  10. Verify that all details are accurate.
  11. Click the Create Amortization Distributions button.

    The Amortization Distributions tab shows the distributions that were generated from the previous tab.

  12. To release the distributions and post to the general ledger, click Release Distributions and specify the required information. If the total distribution amount is greater than the Accounting Entity approval amount, an approval code is required.
    If approvals are required on the Accounting Entity, the Distribution Approval Code is automatically populated from the reconciliation account when you release distributions. When approval is initiated, the system validates approver availability and automatically skips inactive approvers to prevent the approval process from being blocked. You can change the default approval code before submitting, if required. If no approval code is defined on the reconciliation account, you must specify values in the Approval Code field.
    Note: Optionally, for the Reconciliation Management Group, select the Enforce Reconciler Cannot Be Approver check box to strengthen the approval process. If the person releasing the distribution is also trying to approve the transaction, an error message is displayed.
    These statuses are displayed on the Distributions tab:
    • Pending Approval - For distributions that are not yet approved.
    • Released - For distributions that are approved or did not require approval.
    When you open a distribution, the Approval Information tab shows this information:
    • Approval Progress - The level and status of approval.
    • Reject History - The date, reason code, commenter, and comment if the distribution is rejected.