Multi-book accounting feature is used when a subsidiary has its location in one country and has branches in different countries. In such cases they have to prepare financial reports in different accounting standards or in different tax reporting requirements.
Amortization feature enables you to record the expenses and item purchases for different periods. When we have enabled amortization , netsuite will automatically add “Deferred expense” account to the chart of account list to record the GL impact of expenses to amortise. The expense to amortize will be posted to deferred expense account which later will post to the actual expense account when we create amortization entries.
Companies using multi-book accounting feature have to automate the posting of amortization entries to different books. Amortization schedules can be created to post the amortization entries to multiple books. To get the expense amortization feature in multi-book , we have to enable the feature “Revenue and expense management”. To enable the feature ,
Go to,
Set up > Company > Enable features > Accounting > Multi-book accounting > Revenue and expense management.
Amortization template:-
To amortize expenses , we have to create amortization template which can be used as amortization schedule in transaction records. To prepare the amortization template ,
Go to,
List > Accounting > Amortization template>New
In the amortization template , we are not specifying the books to use. Create the amortization template to use in the transactions. While creating the item record , select the template to use in different accounting books , or check the box to use the same amortization template as in the primary book. The below figure shows the item page where we can select different amortization templates.
Note that only the following types of items can use amortization:- Non-Inventory for Purchase/Resale , Other Charge for Purchase/Resale , and Service for Purchase/Resale.
Create the vendor bill with the item to be amortized. Select the amortization schedule for expenses or it can be specified in the item record. It will be used for the primary book. Enter the amortization start and end date in the item line. Save the transaction record.
Update the amortization by clicking on the Update amortization button in vendor bill. Either fill the amortization schedule and start and end date field to set up amortization for the secondary book or remove the values from the field to update the schedule as per primary book. The GL impact will show in the primary book and in the secondary book with corresponding amount. The expense account will be deferred expense account as we have set the amortization schedule.
Amortization journal entries
Create amortization journal entries to post the expenses from deferred expenses to the actual expense account. To create amortization journal entries , go to ,
Transaction > Financial > Create amortization journal entries.
Select the accounting book so that we can see the amortization bill which we have set the amortization schedule. Then click on the “Create journal entries” button. System will show the created amortization journal entries. It needs to be done for all the accounting books which we have to create the amortization entries. The accounting books can be specified in the “Create amortization journal entries” page.