A deferred cost journal entry is made to accrue the deferred costs for amortization when you save the revenue arrangement with costs recorded. The source transactions have no effect on the main ledger. The specified delayed expenditure account is debited and the expense account is credited in the deferral journal entry. In the revenue arrangement, under the Deferred Cost Journal Entry box, there is a link to the current journal entry. In its Related Records subtab, the deferred cost journal entry also provides a link to the income arrangement.
The date of the revenue arrangement and the deferred cost journal entry are the same by default. On the revenue arrangement, however, you can choose a different date for the journal entry by filling in the Contract Cost Accrual Date box. For direct contract acquisition costs, the revenue structure offers an optional third account called the expense source account. NetSuite utilizes this account in place of the Contract Acquisition Expense Account when you choose a Contract Acquisition Expense Source Account.
When you modify the cost accrual date, accounts, or values, the system reverses the deferred cost journal entry and creates a new one. Once revenue plans have been generated, you are unable to modify any accounts associated with the contract acquisition cost. The revenue arrangement’s Related Records subtab has links to every deferred cost journal entry. Any contract cost deferral journal entries are reversed by NetSuite throughout the revenue arrangement merger process. As associated records, the contract cost deferrals and their reversals are still connected to the previous revenue arrangements. With links in the Related Records subtab and the Deferred Cost Journal Entry box, the new revenue arrangement receives a new contract cost deferral.