Understanding Expense Amortization

PeopleSoft General Ledger and Accounts Payable provide a feature that enables Accounts Payable users to initiate advance payments into the PeopleSoft system by entering essential amortization information. On the basis of these details the PeopleSoft financial system creates amortization schedules, which results not only in reducing the manual creation of journal entries to amortize advance payments but also in reducing the balance of the prepaid account.

Expense Amortization also provides the ability to create Stage journals that can be reviewed and edited before the actual journals are created.

Setting Up and Processing Amortization Expenses

To set up amortization expenses:

  1. Create amortization types based on SetID using the AMORT_TYPE component.

  2. Define amortization templates to associate various ChartFields with the amortization types created using the AMORT_TEMPLATE component.

  3. Create summary calendars by entering your quarterly summary calendar and yearly summary calendar using the SUMMARY_CALENDAR component.

  4. Define Detail Ledgers by selecting the amortization template, journal source, amortization calendar, and the amortization document type on the Ledgers for a Unit (BUSINESS_UNIT_LED1) component.

  5. Define an amortization journal source using the SOURCE1 component.

  6. Define an amortization document type using the DOC_TYPE component.

    If PeopleSoft Document Sequencing is enabled, the Amortization feature requires that you identify a document type for all created journal entries.

To process amortization expenses:

  1. Create Accounts Payable vouchers of the style Amortization using the VCHR_EXPRESS1 component.

  2. Schedule the amortization by entering amortization details, creating and reviewing stage journals, and approving the schedule using the AMR_SCHED_ACT component.

  3. Review the stage journals and update ChartFields to resolve edit errors if any, using the Stage Journals (AMR_JOURNAL) component.

  4. Generate Amortization journals using the AMR_JGEN_REQUEST component.

  5. Generate Amortization reconciliation report using the AMR_RECON_REQ component.

The following diagram illustrates the general process flow for expense amortization:

This diagram illustrates the general process flow for expense amortization

 Process flow for Expense Amortization

Note: Updates to the Amortization Schedule and the Accounting Page are not available until the voucher is posted. Prior to that, Finance users can review the information and allow AP users to update any required information on the Voucher side before voucher post.