on 10-10-2011 5:02 PM
Hello Experts,
Our client has a specific requirement for Rent free conditions as below :
Contract valid for 1 year from 01.01.2011 to 31.12.2011
condition valid for the same period $1000 per month.
Whereas the requirement is to provide rent free period (discount) for Jan, Feb and March.
So ultimately client will recieve rent from April onwards till December ie. $9000.
Our requirement is to spread the $9000 across the whole year to show books of accounts correct. ie 9000/12.
But customer/vendor posting will be as agreed for rent free.
Please guide me how do I achieve this through conditions.
Regards
Kumar
Hi,
A simple way of doing it would be to create a condition type with per month amount as $750 (9000/12) and do a posting for all the months (Jan to Dec 2011). Now for the rent free period (Jan to March) either the posted amount in FI can be written off as discount or if the requirement is to do it through REFX then a credit condition type can be created and added in the contract (validity jan to march) and amount as $750.
So the net effect would be Zero for Jan, Feb and March. as we are having both debit and credit entry for these months. As for the actual rent per month $1000, that can be added as a statistical condition type in contract just for information.
Regards,
Deepak
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HI,
How do you want to do the accounting, could you please elaborate?? I have following doubts in reference to your post:
1. For the month Jan, Feb & Mar, do you want to show discount in your books of accounts? If yes, how as monthly discount for Q1 only or the yearly diacount of $3000?
2. If $9000 have to be spread accross the year, do you want to post $750 per month in rent income or $ 1000 per month and seperately show discount of $3000.
Please elaborate the requirement alongwith GL entries to be effected in FI..
Regards
Rohit
Hi Kumar,
I agreed with Deepak if you want to simplify the process, for your rent free period you may just offset the amount for Jan to Mar (12000 - 3000) and divide them manually so that you can allocate it evenly throughout the year in the accounting book.
Another method which I think it will work is using the Accruals method using RERAALCN for allocation.
Regards,
Kon
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