Let’s assume we purchase 12-month system support and maintenance (1st Oct 2024 to 30th Sep 2025) for $12,000 on 1st Oct 2024. In this case, we prepaid the whole year’s system support and maintenance expense and reflect it in P/L on Oct-2024. The term of the system support and maintenance is only 12 months; therefore, we will not recognize any long-term prepaid asset.
To recognize the expense of the system support and maintenance evenly over the 12 months, divide the total amount of $12,000 by 12 for a monthly system support and maintenance premium expense of $1,000.
Remarks:
- The vendor will bill us in Oct-2024 for the whole year’s (12 months) system maintenance and amortize it each month.
- The procurement team will raise two PRs for budgets 2024 and 2025 because D365 cannot handle multiple budget years within the same PO.
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to satisfy the requirement. I suggested customer the following
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Let’s assume we purchase 12-month system support and maintenance (1st Oct 2024 to 30th Sep 2025) for $12,000 on 1st Oct 2024. In this case, we prepaid the whole year’s system support and maintenance expense and reflect it in P/L on Oct-2024. The term of the system support and maintenance is only 12 months; therefore, we will not recognize any long-term prepaid asset.
To recognize the expense of the system support and maintenance evenly over the 12 months, divide the total amount of $12,000 by 12 for a monthly system support and maintenance premium expense of $1,000.
Remarks:
- The vendor will bill us in Oct-2024 for the whole year’s (12 months) system maintenance and amortize it each month.
- The procurement team will raise two PRs for budgets 2024 and 2025 because D365 cannot handle multiple budget years within the same PO.
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but it is not the perfect one as customer need to do manually GL,
1:it is could not acceptable as the huge GL need to be created.
2: the budget could not be cost at the PO stage and invoice stage